United States: OHL Solutions Fined $1 Million For Failing To Screen Cargo

In a February 2011 issue of our Mobility Matters Bulletin we noted that our earlier prediction regarding TSA enforcement – a prediction that TSA would turn toward a "harder" enforcement approach – had come to fruition. 

We discussed a number of press reports indicating that five companies were under investigation, including one criminal investigation, for potential violations of the Certified Cargo Screening Program (CCSP).  More specifically, we discussed reports indicating that, in December 2010, TSA began an investigation of Activair, an air cargo subsidiary of third-party logistics operator OHL Solutions.

Now, in February 2012, following a lengthy investigation, U.S. Attorney Joe Hogsett has announced a $1 million fine against OHL Solutions for intentionally failing to screen cargo for explosives. 

Failing to screen cargo for explosives is not only a violation of the CCSP, but is also a violation of the 9/11 Act, which requires 100 percent screening of all air cargo. (See here, here, and here for more on this Act).

According to investigators, Activair falsified records to cover up the fact that hundreds of unscreened packages were being flown out of the Indianapolis International Airport, in the holds of passenger airplanes, during a roughly nine month period in 2010.

In addition to the fine, three of Activair's managers pled guilty to Conspiracy to Commit Federal Reporting and Recordkeeping Violations and now face five years in prison and $225,000 fines.  Furthermore, OHL Solutions has been forced to restructure its corporate model, including supervision over air cargo operations, and its subsidiary, Activair, is no longer doing business in Indianapolis.

As this case demonstrates, in the event TSA discovers negligent or willful violations of regulatory requirements, TSA can and will take enforcement actions, including the issuance of civil penalties, referral for criminal prosecution, and/or withdrawal from TSA programs.

Back in February 2011, we advised TSA-regulated companies to focus on their CCSP compliance efforts, as even temporary removal from the CCSP can have a devastating effect for a company committed to screening cargo for customers.  The enforcement actions taken against OHL Solutions strongly reinforce the need for focused compliance efforts.

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