**FEDERAL MARITIME COMMISSION**

  ------------------------------------------- ---------------------------
  [Worldwide Relocations, Inc., All-in-One    Docket No. 06-01
  Shipping, Inc., Boston Logistics Corp.,     
  Around the World Shipping, Inc., Tradewind  
  Consulting, Inc., Global Direct Shipping,   
  Megan K. Karpick (a.k.a. Catherine Kaiser,  
  Kathryn Kaiser, Catherine Kerpick, Megan    
  Kaiser and Alexandria Hudson), Martin J.    
  McKenzie, Patrick John Costadoni, Elizabeth 
  F. Hudson, Sharon Fachler, and Oren         
  Fachler, et. al. -- Possible Violations of  
  Sections 8, 10, 19 of the Shipping Act of   
  1984 and the Commission's Regulations at 46 
  C.F.R. §§ 515.3, 515.21 and                 
  520.3]{.smallcaps}                          

  ------------------------------------------- ---------------------------

Served: November 29, 2006

**BY THE COMMISSION:** Steven R. BLUST, *Chairman;* A. Paul ANDERSON,
Joseph E. BRENNAN, Harold J. CREEL, Jr., and Rebecca F. DYE,
*Commissioners.*

**[ORDER REVERSING ADMINISTRATIVE LAW JUDGE'S APPROVAL OF PROPOSED
SETTLEMENT AGREEMENT AND REMANDING FOR FURTHER PROCEEDINGS CONSISTENT
WITH THIS ORDER]{.underline}**

[INTRODUCTION]{.underline}

On January 11, 2006, the Federal Maritime Commission ("Commission")
instituted this proceeding by an Order of Investigation and Hearing.
Following the initiation of this proceeding, the Commission obtained an
injunction against certain of the named Respondents in U.S. District
Court for the Southern District of Florida, which prohibits Respondents
from acting as non-vessel-operating common carriers ("NVOCCs") without a
license, proof of financial responsibility, or public tariff. The
Commission's Bureau of Enforcement ("BOE"), along with four of the
Respondents, seek to enter into two settlement agreements. The
administrative law judge ("ALJ") issued an order entitled "Initial
Decision Approving the Proposed Settlement Agreement" ("I.D."), on the
two settlement agreements.

The Commission determined to review the I.D. approving the proposed
settlement agreements in this proceeding. For the reasons set forth
below, we reverse the ALJ's approval and remand the proposed settlement
agreements for further proceedings consistent with this Order.

A.  [Order of Investigation and Hearing]{.underline}

On January 11, 2006, the Commission instituted this proceeding by an
Order of Investigation and Hearing. The purpose of the investigation is
to determine whether the Respondents violated sections 8(a), 10(d)(1),
and 19 of the Shipping Act of 1984, 46 U.S.C. §§ 40501-40503,
41301-42307, and 40901-40904,[^1] and the Commission's regulations at 46
C.F.R. Parts 515 and 520 by operating as unlicensed NVOCCs, operating
without proof of financial responsibility, operating without publishing
a tariff, and by failing to establish, observe, and enforce just and
reasonable regulations and practices relating to or connected with
receiving, handling, storing, or delivering property. Order of
Investigation at 7. The Respondents named in the Order are: Moving
Services, L.L.C.; Worldwide Relocations, Inc.; International Shipping
Solutions, Inc.; Dolphin International Shipping, Inc.; All-in-One
Shipping, Inc.; Boston Logistics Corp.; Around the World Shipping, Inc.;
Tradewind Consulting, Inc.; Global Direct Shipping; Sharon Fachler; Oren
Fachler; Lucy Norry; Patrick J. Costadoni; Steve Kuller; Megan K.
Karpick (a.k.a. Cathryn Kaiser, Kathryn Kaiser, Catherine Kerpick, Megan
Kaiser and Alexandria Hudson); Barbara Deane (a.k.a. Barbara Fajardo);
Baruch Karpick; Martin J. McKenzie; Joshua S. Morales; Elizabeth F.
Hudson; Daniel E. Cuadrado (a.k.a. Daniel Edward); Ronald Eaden; and
Robert Bachs (collectively "Respondents").

The Order of Investigation states that the Commission received over 250
complaints from shippers claiming that they hired one of nine household
goods moving companies that appear to be related to one another to
transport their goods from various locations within the United States to
foreign destinations. [Id.]{.underline} at 1. The complaints alleged
that the moving companies: (1) failed to deliver cargo and refused to
return pre-paid ocean freight; (2) lost cargo; (3) charged for marine
insurance but never actually obtained coverage; (4) misled the shipper
regarding the location of cargo; (5) charged the shipper a substantially
inflated rate after cargo was tendered and subsequently threatened to
withhold the cargo unless the increased freight was paid; and (6) failed
to pay the common carrier hired as an intermediary. [Id.]{.underline} at
2.

B.  [FMC Obtains Injunction Against Respondents in 06-01]{.underline}

On January 17, 2006, the U.S. District Court for the Southern District
of Florida granted the Commission's request for a preliminary injunction
against International Household Goods Movers; All-In-One Shipping, Inc.,
Around the World Shipping, Inc.; Boston Logistics Corp.; Global Direct
Shipping; Daniel Cuadrado; Elizabeth F. Hudson; and Joshua Morales,
which prohibits these parties from acting as NVOCCs without a license,
proof of financial responsibility, or public tariff. If these entities
fail to comply with the injunction, they could be held in civil contempt
by the court. The injunction covers those entities and individuals for
which there was evidence to demonstrate they were currently operating.
[See]{.underline} FMC News Release 06-01, January 18, 2006. The order
granting the injunction provides that the named entities and those in
active concert or participation with them are restrained and enjoined
from: violating sections 8, 19(a), and 19(b) of the Shipping Act by
accepting cargo for transportation and advertising for or soliciting
cargo while operating as ocean transportation intermediaries ("OTIs") in
the United States without a valid license issued by the Commission; and
accepting cargo for transportation and advertising for or soliciting
cargo while operating as a non-vessel-operating common carrier without a
valid bond, proof of insurance, or other surety on file with the
Commission and without a tariff available for inspection by the public.
The injunction will remain in effect until ten days after the completion
of the Commission's investigatory proceeding.

C.  [Joint Memoranda in Support of the Proposed Settlements]{.underline}

On May 2, 2006, BOE and four respondents submitted joint memoranda in
support of proposed settlements. Joshua S. Morales and All-in-One
Shipping submitted a joint memorandum with BOE in support of a proposed
settlement agreement. Joint Memorandum with All-in-One at 1-2.
Respondents Morales and All-in-One admit, *inter alia*, that they each
violated sections 8(a) and 19 of the Shipping Act and they have agreed
to cease and desist from holding out or operating as an OTI without a
license issued by the Commission. Mr. Morales has agreed that his
involvement with any ocean transportation services company will only be
as a bona fide employee. Respondents Morales and All-in-One have also
withdrawn their OTI license application and have agreed they will not
file another application for All-in-One or any other entity for one year
from the date of the settlement agreement. [Id.]{.underline} at 3. Any
subsequent application for a license shall be reviewed directly by the
Commission. Proposed Settlement Agreement with All-in-One at 4.
Respondents have also agreed to cooperate with any ongoing investigative
activity or enforcement action in this docket or any related actions.
[Id.]{.underline} In addition, Respondents have agreed to utilize their
best efforts to resolve any outstanding consumer complaints related to
their prior ocean transportation activities. [Id.]{.underline} at 2. The
settlement agreement further notes that Respondents have disclosed
information, facts, and documents related to their activities, as well
as the activities of other named parties in the docket.
[Id.]{.underline}

Daniel E. Cuadrado and Around the World Shipping, Inc., also submitted a
joint memorandum with BOE in support of a proposed settlement agreement.
Joint Memorandum with Around the World at 1-2. Respondents Cuadrado and
Around the World Shipping admit, *inter alia*, that they each violated
sections 8(a) and 19 of the Shipping Act and they have agreed to cease
and desist from holding out or operating as an OTI without a license
issued by the Commission. Mr. Cuadrado has agreed that his involvement
with any ocean transportation services company will only be as a bona
fide employee. Respondents Cuadrado and Around the World Shipping have
also agreed that they will not file an OTI license application for
Around the World Shipping or any other entity for one year from the date
of the settlement agreement. [Id.]{.underline} at 3. Any subsequent
application for a license shall be reviewed directly by the Commission.
Proposed Settlement Agreement with Around the World at 4. Respondents
have also agreed to cooperate with any ongoing investigative activity or
enforcement action in this docket or any related actions.
[Id.]{.underline} In addition, Respondents have agreed to utilize their
best efforts to resolve any outstanding consumer complaints related to
their prior ocean transportation activities. [Id.]{.underline} at 2. The
settlement agreement further notes that Respondents have disclosed
information, facts, and documents related to their activities, as well
as the activities of other named parties in the docket.
[Id.]{.underline}

D.  [Initial Decision on Proposed Settlement Agreement]{.underline}

On May 23, 2006, the ALJ issued an I.D. approving both of the proposed
settlements. The ALJ indicates that it is the Commission's policy to
encourage settlements, and that if a proffered settlement does not
violate any law and is free of any defect that might make it
unacceptable, it will likely be approved. [See]{.underline} I.D. at 2
(citing [Old Ben Coal]{.underline}, 21 F.M.C. 506, 512 (ALJ 1978)). The
ALJ indicates further that the proposed settlement agreements would save
all parties time and expense associated with litigation, and that the
settlement agreements would also advance the Commission's enforcement
policy by "penaliz\[ing\] the respondents, ensur\[ing\] their future
compliance, and may reasonably be expected to deter similar misconduct
within the industry." [Id.]{.underline} at 3.

[DISCUSSION]{.underline}

We have determined not to approve the proposed settlement agreements
submitted to us by the ALJ. We are unable, based upon the record before
us, to conclude that approval of the settlements would be in the public
interest. First, the Order of Investigation states that over 250
consumer shipper complaints were filed against the Respondents named in
this proceeding collectively. However, it remains unclear if any of the
complaints filed against All-in-One Shipping or Around the World
Shipping or the named individuals were resolved favorably for shippers.
For example, was misplaced cargo located and delivered to any of the
injured shippers? Was pre-paid ocean freight returned, as necessary?
Were shippers refunded any monies paid as a result of inflated rates?

Second, the I.D. and the proposed settlements lack a substantive
discussion regarding the alleged section 10 violations. The Order of
Investigation provides that the shipper complaints allege that the
collective Respondents: failed to deliver cargo and refused to return
pre-paid ocean freight; lost cargo; charged for marine insurance but
never obtained such coverage; misled shippers regarding the location of
their cargo; charged shippers inflated rates after the cargo had been
tendered and then threatened to withhold the cargo unless the increased
freight was paid; and failed to pay the common carrier used by
Respondents as an additional intermediary. Order of Investigation at 2.
The Order alleges that these activities could constitute a violation of
section 10(d)(1) of the Shipping Act. That section provides that "\[n\]o
common carrier, ocean transportation intermediary, or marine terminal
operator may fail to establish, observe, and enforce just and reasonable
regulations and practices relating to or connected with receiving,
handling, storing, or delivering property." 46 U.S.C. § 41102. The I.D.
states that Respondents admit to violating sections 8 and 19 but omits
any mention of section 10 violations. It is unclear whether All-in-One,
Mr. Morales, Around the World, or Mr. Cuadrado committed any of the
alleged violations outlined in the Order of Investigation. It further
remains unclear that if section 10 violations were committed by some or
all of these four Respondents, whether the violations were remedied.
These are a few examples of the issues that need to be fleshed out
before the Commission can approve the proposed settlement agreements.

Therefore, we are remanding these settlement agreements to the current
ALJ to develop the record to support a finding that any settlement
entered into in this proceeding is in the public interest. Specifically,
we direct the ALJ to determine whether and to what extent the consumer
complaints giving rise to this proceeding have been resolved. In
addition, with respect to any such settlements we instruct the ALJ to
address more fully each of the provisions of the Shipping Act alleged to
have been violated. To the extent it deems necessary, BOE is directed to
provide any sensitive details in support of its settlement agreements in
a confidential filing(s) to the Commission. For example, if BOE agreed
not to prosecute the alleged section 10 violations in exchange for
information or cooperation that would assist in its litigation against
other Respondents, that information would be helpful to the Commission's
deliberations.

[CONCLUSION]{.underline}

Given Respondents' alleged flagrant conduct in this proceeding, as
outlined in the Order of Investigation, we are unable to conclude that
the proposed settlements are in the public interest, without the benefit
of further elaboration on the existence of the purported section 10
violations and whether the claims of the injured shippers were resolved.
While the Commission generally encourages settlements, the gravity of
offenses alleged to have been committed in this proceeding prompted the
Commission to seek injunctive relief in U.S. District Court. These are
the first proposed settlements in this proceeding, and they concern
entities and individuals named in the injunction. These settlements may
likely provide the framework for future settlements with other
Respondents. Therefore, we are reversing the ALJ's approval of the
proposed settlements, and remanding this proceeding with instructions to
explain whether and to what extent the shippers' complaints have been
resolved. In addition, it is necessary to further elaborate upon the
alleged section 10 violations.

THEREFORE, IT IS ORDERED, That the proposed settlement agreements are
remanded for further disposition consistent with this Order.

By the Commission.

Bryant L. VanBrakle

Secretary

[^1]: These sections of the Shipping Act were formerly 46 U.S.C. §§
    1707, 1710, and 1718. The new citations reflect the recent
    codification of Title 46. Pub. L. No. 109-304 (2006).