Metro Freight Services, Inc. d/b/a Maritime Express Lines-Possible Violations of the Shipping Act; Order of Investigation and Hearing, 60161-60163 [2014-23645]

Agencies

• Federal Maritime Commission

[Federal Register Volume 79, Number 193 (Monday, October 6, 2014)]
[Notices]
[Pages 60161-60163]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23645]



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FEDERAL MARITIME COMMISSION

[Docket No. 14-13]


Metro Freight Services, Inc. d/b/a Maritime Express Lines--
Possible Violations of the Shipping Act; Order of Investigation and 
Hearing

    The Federal Maritime Commission (Commission) deems it appropriate 
and in the public interest that a proceeding be, and hereby is, 
instituted pursuant to section 11 of the Shipping Act of 1984 (Shipping 
Act), 46 U.S.C. 41302, against respondent Metro Freight Services, Inc., 
a licensed and bonded ocean freight forwarder and non-vessel-operating 
common carrier (NVOCC), for possible violations of the Commission's 
regulations at 46 CFR 515.18(c) and 515.42(i) and section 19(e)(3) of 
the Shipping Act, 46 U.S.C. 40904(c).
    Based on information provided to it, the Commission's Bureau of 
Enforcement makes the following allegations:

Statement of Facts Constituting Basis of Violations

    1. Metro Freight Services, Inc. dba Maritime Express Lines (M.E.L.) 
(Metro Freight) is a licensed, tariffed and bonded ocean transportation 
intermediary (OTI), providing service as a freight forwarder and NVOCC 
(Org. No. 006490).
    2. Metro Freight's offices are located at 1225 West St. George 
Avenue, Linden, New Jersey 07036.
    3. Metro Freight was incorporated in the State of New York in 1985, 
and is registered with the State of New Jersey as a foreign corporation 
doing business in that state.
    4. Metro Freight holds itself out to do OTI business through its 
Internet Web site, www.metroiff.com.
    5. Metro Freight holds itself out as an NVOCC through its automated 
tariff (006490-001) published by Distribution Publications, 
Inc at https://www.dpiusa.com.
    6. Metro Freight maintains an NVOCC bond, No. 570364, in the amount 
of $75,000 and a freight forwarder bond, No. W6009, in the amount of 
$50,000 with American Alternative Insurance Corporation in Princeton, 
New Jersey.
    7. Through April 2010, OTI licensing records maintained by the 
Commission's Bureau of Certification and Licensing (BCL) identify 
Georges T. Samaha as the sole Qualifying Individual (QI) for Metro 
Freight.
    8. On or about February 29, 2012, Metro Freight submitted to the 
Commission's Bureau of Enforcement (BOE) written responses to an OTI 
compliance questionnaire, dated February 2, 2012.
    9. Metro Freight's February 29, 2012 response identified its QI, 
Georges Samaha, as deceased.
    10. On information and belief, the former QI and owner of Metro 
Freight, Georges Samaha, passed away on August 6, 2011.
    11. Metro Freight's February 29, 2012 response identified Metro 
Freight as having handled 634 export ocean shipments as an OTI ocean 
freight forwarder in the 12 months immediately prior.
    12. Metro Freight's February 29, 2012 response identified G&M 
Export Corporation as a shipper of cargo affiliated with Metro Freight.
    13. Metro Freight's February 29, 2012 response identified G&M 
Export's address as 1225 West St. George Avenue, Linden, New Jersey 
07036.
    14. Metro Freight's February 29, 2012 response identified G&M 
Export as sharing office space, expenses and/or personnel with Metro 
Freight.
    15. Metro Freight's February 29, 2012 response identified Paola C. 
Samaha as the 100% owner of G&M Export.
    16. By letter dated March 6, 2012, BOE advised Metro Freight of its 
obligation to submit an application for a proposed replacement QI. 46 
CFR 515.18(c).
    17. By follow-up letter to BOE dated March 16, 2012, Metro Freight 
advised that it had collected freight forwarder compensation on 28 
shipments in which G&M Export was the shipper named on the bill of 
lading issued by the ocean common carrier, United Arab Shipping Company 
(UASC).
    18. On or about May 11, 2012, Metro Freight submitted an 
application designating Paola C. Samaha as the proposed QI for Metro 
Freight, replacing Georges Samaha. Mrs. Samaha was identified therein 
as the President and 100% owner of Metro Freight.
    19. In support of its application, Metro Freight submitted a copy 
of a corporate resolution dated January 3, 2012, designating Paola 
Samaha as President of Metro Freight to replace the ``decedent 
President, Mr. Georges T. Samaha.''
    20. On June 26, 2012, Metro Freight was notified by letter that the 
Commission's Bureau of Certification and Licensing (BCL) closed its 
application for failure to demonstrate that the proposed QI, Paola 
Samaha, met the requirements to demonstrate prior OTI-related work 
experience.
    21. BCL's June 26, 2012 letter notified Metro Freight that it was 
required to promptly submit another application to replace the QI, and 
that continued operation could result in civil penalties.
    22. BCL receive no response from Metro Freight regarding the letter 
issued June 26, 2012.
    23. Through September 1, 2014, the Commission's Bureau of 
Certification and Licensing has not approved a replacement QI for Metro 
Freight.
    24. According to records of the New York State Division of 
Corporations, G&M Export was incorporated in the State of New York in 
1990.
    25. According to records of the New York State Division of 
Corporations, G&M Export's address is 1225 West St. George Avenue, 
Linden, New Jersey 07036.
    26. According to records of the New York State Division of 
Corporations, Paola C. Samaha is currently the Chairman and CEO of G&M 
Export.
    27. According to records in the Commission's SERVCON database, G&M 
Export is identified as the shipper party named in service contracts 
with United Arab Shipping Company (UASC), an ocean common carrier.
    28. UASC service contract No. 2009-130 was first executed on or 
about February 20, 2009 and signed by Georges T. Samaha as President 
and CEO of G&M Export.
    29. In entering into UASC service contract No. 2009-130, G&M Export 
certified that its shipper status was cargo owner.
    30. The term of UASC service contract No. 2009-130 was February 20, 
2009 through February 19, 2010. UASC service contract No. 2009-130 was 
extended by contract amendments through March 31, 2011.
    31. UASC service contract No. 124288 was first executed on or about 
April 1, 2011 and signed by Paola C. Kamel as President and CEO of G&M 
Export.
    32. In entering into UASC service contract No. 124288, G&M Export 
certified that its shipper status was cargo owner.
    33. The term of UASC service contract No. 124288 was April 1, 2011 
through March 31, 2012.
    34. UASC service contract No. 187966 was first executed on or about 
April 17, 2012 and signed by Paola Samaha on behalf of G&M Export.
    35. On information and belief, Paola C. Kamel and Paola C. Samaha 
are the same person.
    36. In entering into UASC service contract No. 187996, G&M Export 
certified that its shipper status was cargo owner.
    37. The term of UASC service contract No. 187966 was April 1, 2012 
through April 30, 2013. UASC service contract No. 187966 was terminated 
by

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Amendment 3, effective February 5, 2013.
    38. With respect to the 25 shipments identified in Attachment A, 
G&M Export was identified as the shipper on the UASC ocean bill of 
lading.
    39. With respect to the 25 shipments identified in Attachment A, 
Metro Freight invoiced or collected freight forwarder compensation for 
shipments in which G&M Exports was the shipper.
    40. On May 28, 2014, the Commission's New York Area Representative 
Ron Podlaskowich visited Metro Freight's offices and interviewed staff 
at the offices of Metro Freight, and confirmed that Metro Freight was 
still operating as an OTI in the absence of an approved QI.

The Commission's Jurisdiction and Requirements of Law

    41. Each OTI licensee must have and continuously maintain an 
approved Qualifying Individual having the necessary experience in OTI 
activities and the necessary character to render OTI services. The 
Commission's regulations at 46 CFR 515.18(a)(6) and (c) require that 
when a corporation has been licensed on the basis of the qualifications 
of an officer of the company and that individual no longer serves in a 
full time and active capacity, the licensee must report such change to 
the Commission within 30 days and within that time period furnish to 
the Commission the names and detailed intermediary experience of any 
other active officer who may qualify the licensee.
    42. Section 19(e) of the Shipping Act, 46 U.S.C. 40904 states that 
an ocean freight forwarder may not ``receive compensation from a common 
carrier for a shipment in which the ocean freight forwarder has a 
direct or indirect beneficial interest.'' The Commission regulations 
further specify that a freight forwarder ``may not receive compensation 
from a common carrier with respect to any shipment in which the 
forwarder has a beneficial interest or with respect to any shipment in 
which the holding company, subsidiary, affiliate, officer, director, 
agent or executive of such forwarder has a beneficial interest.'' 46 
CFR 515.42(i).
    43. The activities of Metro Freight, identified above, were 
provided as part of and in connection with transportation by water of 
cargo between the United States and a foreign country for compensation 
over which the Commission has jurisdiction.
    44. Under 46 U.S.C. 41302(a), the Commission is empowered to 
investigate any conduct or agreement that the Commission believes may 
be in violation of the Shipping Act.
    45. The Commission may, after notice and opportunity for hearing, 
issue an order relating to any violation of the Shipping Act, including 
assessment of a civil penalty. 46 U.S.C. 41304.
    46. The Commission may suspend or revoke an OTI license if the 
Commission finds that the OTI willfully failed to comply with an order 
or regulation of the Commission. 46 U.S.C. 40903(a).

Violations of the Shipping Act and Commission Regulations

    47. It is alleged that Metro Freight violated the Commission's 
regulations at 46 CFR 515.18(a)(6) and (c) by failing to promptly 
notify the Commission of the death of its QI and failing to timely seek 
and obtain approval of a replacement Qualifying Individual.
    48. It is alleged that, with respect to the 25 shipments identified 
in Attachment A, Metro Freight violated section 19(e)(3) of the 
Shipping Act and the Commission's regulations at 46 CFR 515.42(i), by 
receiving freight forwarder compensation from a common carrier for 
shipments in which Metro Freight had a direct or indirect beneficial 
interest.

Order

    Now therefore, it is ordered, That pursuant to sections 11 and 14 
of the Shipping Act, 46 U.S.C. 41302 and 41304, an investigation is 
instituted to determine: (1) Whether Metro Freight Services Inc. 
violated (a) the Commission's regulations at 46 CFR 515.18(a)(6) and 
(c) by failing to promptly notify the Commission of the death of its QI 
and to timely seek and obtain approval of a replacement QI; and (b) 
section 19(e)(3) of the Shipping Act, 46 U.S.C. 40904(c), and the 
Commission's regulations at 46 CFR 515.42(i), by receiving freight 
forwarder compensation for shipments in which the forwarder had a 
direct or indirect beneficial interest; (2) in the event violations of 
the Shipping Act or the Commission's regulations are found, whether 
civil penalties should be assessed against Metro Freight, and in what 
amount; (3) whether the OTI license of Metro Freight should be 
suspended or revoked pursuant to section 19 of the Shipping Act; and 
(4) whether appropriate cease and desist orders should be entered;
    It is further ordered, That Metro Freight Services, Inc. is 
designated Respondent in this proceeding;
    It is further ordered, That the Commission's Bureau of Enforcement 
is made a party to this proceeding;
    It is further ordered, That within 25 days from date of publication 
of this Order in the Federal Register, Respondent must file with the 
Commission and serve upon the Bureau of Enforcement an Answer to the 
allegations in this Order, in accordance with the requirements of the 
Commission's regulations set forth in 46 CFR 502.63(c). Respondent's 
answer must be verified and admit or deny all allegations in this 
Order. Allegations not denied shall be deemed admitted;
    It is further ordered, That this matter be assigned for hearing 
before an Administrative Law Judge of the Commission's Office of 
Administrative Law Judges at a date and place to be determined by the 
Administrative Law Judge in compliance with Rule 61 of the Commission's 
Rules of Practice and Procedure, 46 CFR 502.61. This hearing shall 
include oral testimony and cross-examination in the discretion of the 
presiding Administrative Law Judge only after consideration has been 
given by the parties and the presiding Administrative Law Judge to the 
use of alternative forms of dispute resolution, and upon a proper 
showing that there are genuine issues of material fact that cannot be 
resolved on the basis of sworn statements, affidavits, depositions, or 
other documents or that the nature of the matters in issue is such that 
an oral hearing and cross-examination are necessary for the development 
of an adequate record;
    It is further ordered, That failure of Respondent to timely file an 
answer to this Order may be deemed to constitute default and authorize 
the presiding Administrative Law Judge, without further notice to 
Respondent, to find the facts to be as alleged and to enter a decision 
containing appropriate findings, conclusions, and an order;
    It is further ordered, That other persons having an interest in 
participating in this proceeding may file motions for leave to 
intervene in accordance with Rule 68 of the Commission's Rules of 
Practice and Procedure, 46 CFR 502.68;
    It is further ordered, That all further notices, orders, and/or 
decisions issued by or on behalf of the Commission in this proceeding, 
including notice of the time and place of hearing or prehearing 
conference, shall be served on the parties of record;
    It is further ordered, That all documents filed by any party of 
record in this proceeding shall be directed to the Secretary, Federal 
Maritime Commission, Washington, DC 20573, in accordance with Rule 2 of 
the Commission's Rules of Practice and

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Procedure, 46 CFR 502.2, and shall be served on the parties of record; 
and
    It is further ordered, That in accordance with Rule 61 of the 
Commission's Rules of Practice and Procedure, 46 CFR 502.61, the 
initial decision of the Administrative Law Judge shall be issued by 
September 29, 2015, and the final decision of the Commission shall be 
issued by March 28, 2016.

    By the Commission.
Karen V. Gregory,
Secretary.

Order of Investigation and Hearing

Attachment A

   Shipments Upon Which Metro Freight Services Inc. Allegedly Obtained
Forwarder Compensation in Violation of Section 19(e) of the Shipping Act
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                                                               Date of
          No.             UASC Ocean bill of lading number      issue
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1......................  USCQG028534.......................   12/11/2010
2......................  USCQG027253.......................   12/12/2010
3......................  USCQG029247.......................   12/23/2010
4......................  USCQG029603.......................   01/03/2011
5......................  USCQG030665.......................   01/20/2011
6......................  USCQG032192.......................   01/27/2011
7......................  USCQG040363.......................   05/12/2011
8......................  USCQG041856.......................   05/26/2011
9......................  USCQG042415.......................   05/26/2011
10.....................  USCQG040722.......................   05/29/2011
11.....................  USCQG043224.......................   06/16/2011
12.....................  USCQG043092.......................   06/23/2011
13.....................  USCQG044329.......................   06/23/2011
14.....................  USCQG043103.......................   06/30/2011
15.....................  USCQG044899.......................   06/30/2011
16.....................  USCQG043090.......................   06/30/2011
17.....................  USCQG043105.......................   07/07/2011
18.....................  USCQG046169.......................   07/14/2011
19.....................  USCQG045558.......................   07/14/2001
20.....................  USCQG048972.......................   08/22/2011
21.....................  USCQG049349.......................   08/25/2011
22.....................  USCQG053301.......................   10/08/2011
23.....................  USCQG053172.......................   10/15/2011
24.....................  USCQG057132.......................   11/17/2011
25.....................  USCQG060236.......................   12/27/2011
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[FR Doc. 2014-23645 Filed 10-3-14; 8:45 am]
BILLING CODE 6730-01-P