Shipping Co.’s Settle False Claims for $3.4M ; Whistleblower to Get $512K
Sea Star Line LLC and Horizon Lines LLC have agreed to pay $3.4 million to resolve allegations that the companies knowingly submitted or caused the submission of false claims to the federal government by fixing the prices of government cargo transportation contracts between the United States and Puerto Rico, the U.S. Department of Justice announced today. Sea Star Line will pay $1.9 million, while Horizon Lines will pay $1.5 million.
The government alleged that former executives of the defendant ocean shippers used personal email accounts to communicate confidential bidding information, thereby enabling each of the shippers to know the transportation rates that its competitor intended to submit to federal agencies for specific routes. This information allowed the shippers to allocate specific routes between themselves at predetermined rates. Among the contracts affected were U.S. Postal Service contracts to transport mail and Department of Agriculture contracts to ship food. Both Sea Star Line and Horizon Lines previously pleaded guilty, in related criminal proceedings, to anticompetitive conduct in violation of the Sherman Act.
The lawsuit was originally filed by William B. Stallings, a former Sea Star Line executive, under the whistleblower provision of the False Claims Act. The False Claims Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery. Stallings will receive $512,719 as his portion of the settlement.
The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments. We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud. Read more about our expertise in False Claims Act cases and how you can take action.