Panalpina Settles Case Alleging Unlawful Entertainment

Panalpina Houston, a provider of forwarding and logistics services, has agreed to pay the U.S. Government $375,000 to settle a civil complaint concerning unlawful entertainment. Panalpina was named as a defendant in a qui tam civil complaint filed several years ago by a private party on behalf of the U.S. Government.

In the complaint it is alleged that, in connection with the provision of logistics services, a former employee of Panalpina has provided unlawful entertainment to employees of a customer. According to a settlement agreement reached with the U.S. authorities, Panalpina will pay $375,000.

The civil complaint concerns entertainment expenses allegedly incurred in violation of the U.S. False Claims Act by one of Panalpina's former employees which involved employees of Kellogg, Brown and Root (KBR) under the U.S. Government's Logistics Civil Augmentation Programs (Logcap III). The majority of the alleged expenses involved the purchase of soda, meals and golf green fees. Under the terms of the settlement agreement, neither Panalpina nor the U.S. Government admit or deny any of the allegations, but have mutually agreed to close the investigation and dismiss the complaint, which was filed by qui tam plaintiffs, with prejudice.

After learning of the allegations, Panalpina conducted an internal investigation and concluded that any persons allegedly involved in any improper activity were no longer employed by the company.