A  whistleblower’s statements have led to a massive, multi-million dollar settlement with APL Logistics and the Justice Department, resolving allegations that the company defrauded the government.

The whistleblower settlement was the result of allegations that the container shipping and ocean freight company was gouging the U.S. government on shipping contracts.

The Justice Department announced the $9.8 million settlement in late October 2015. The agreement claims that API was overbilling the government for shipment tracking services that the company never provided.

Allegedly, the company did not install tracking devices or did not transmit data as required by their contract with the Department of Defense.

The allegations originated from an anonymous APL Logistics employee turned whistleblower who reported a variety of allegations. For example, the whistleblower alleged that the company installed only one tracker per two shipping containers instead of the contracted one per container for several months in 2009.

Additionally, the whistleblower claimed that the company billed the government for trackers that either did not work or it knew to be defective between 2010 and 2011. The whistleblower’s also alleged that APL Logistics’ fraud directly affected military supply lines in both Afghanistan and Iraq.

In addition to the U.S. Attorney’s office, civilian and military law enforcement worked together on the whistleblower’s case. Frank R., director of the Major Procurement Fraud Unit within the U.S. Army’s Criminal Investigation Command (abbreviated “CID” for historical reasons) issued a statement regarding the APL Logistics settlement agreement,

“Thanks to the collaborative efforts of many U.S. law enforcement professionals, APL is today being held accountable for their actions. I applaud all those responsible for their continued pursuit of those who attempt to take advantage of the U.S. military through false claims for services that were not provided,” Frank said.

History of APL Whistleblower Allegations

This is not the first time that APL has been held accountable based on an employee blowing the whistle on improper conduct. In February 2009, the Department of Justice issued a statement when APL agreed to pay a $26.3 million settlement to resolve fraud allegations over inflated costs of shipping military material to Afghanistan and Iraq. In that case, a whistleblower lawsuit led to $5.2 million of the larger settlement going to the original whistleblower.

Under U.S. law, a whistleblower can receive a portion of a settlement in cases of alleged fraud against the government. Additionally, federal law provides for whistleblower protection.

APL Logistics does not admit to any wrongdoing and stated that the discrepancies came from different interpretations of the contract rather than bad faith or intentional misconduct on their behalf. Per the Department of Justice’s statement on the issue, the matter was resolved in civil court with “no determination of liability” rather than as a criminal proceeding.