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Companies Agree to Settle False Claims Act Violations Related to Delivery of Humanitarian Food Aid

Alleged acts of fraud against the US always affect taxpayers dollars and often affects people who are needy. That was demonstrated early this month when the Justice Department announced that Jacintoport International LLC and Seaboard Marine Ltd. had agreed to pay more than a million dollars to settle allegations that the companies violated the False Claims Act in connection with their warehousing and logistics contract for the storage and deliverance of humanitarian food aid. Jacintoport is a cargo company based in Houston and Seaboard Marine is an ocean transportation company based in Miami. The government alleged that Jacintoport violated the terms of a 2007 warehousing and logistics contract with the United States Agency for International Development (USAID) for the storage and re-delivery of humanitarian food aid. According to the complaint, from January 2008 through October 2009 Jacintoport and Seaboard exceeded caps on the rates set out in the contract between the USAID and these two companies. Moreover, the government alleged that these inflated stevedoring charges were lumped with other costs for food aid delivery and then passed on to the United States. “USAID’s humanitarian food aid program provides critical assistance to starving people all over the world,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Justice Department will hold accountable those who seek to abuse this important program.” ‪‬

“It is unacceptable for companies that do business with the federal government to inflate their costs,” said U.S. Attorney Channing D. Phillips for the District of Columbia. “This settlement demonstrates our determination to protect the taxpayers’ dollars – and humanitarian programs – from abuse.” The allegations that are resolved by this settlement came about as the result of a lawsuit filed under the qui tam provisions of the False Claims Act. John Raggio, a shipping contractor – reported the conduct that is the basis of this lawsuit when he allegedly received an invoice from Jacintoport containing the excessive stevedoring charge. Under the qui tam provisions of the False Claims Act, private citizens are able to bring suit on behalf of the United States government and share in any recovery. For his part, Raggio will receive $215,000. The case is United States ex. rel. Raggio v. Jacintoport International, LLC, et al. Case No. 1:10-cv-01908 (D.D.C.).