Since 2007, a major trucking company and an affiliate allegedly have bilked the U.S. government out of millions by making false claims about the weight of belongings of military personnel -- including soldiers based at Fort Jackson, S.C., according to a civil lawsuit filed by the U.S. Attorney's Office in Columbia, S.C.
Covan World-Wide Moving, and its affiliate, Coleman-American Moving Services, are paid by the government based on the weight of items moved. Over the years, they "systematically falsified weight certificates, shipping records and invoices by increasing shipment weights," the lawsuit said.
The alleged "potentially vast and complex fraud" first was discovered at an Augusta truck shipping depot that receives and ships Fort Jackson soldiers' belongings, according to the lawsuit and related government filings in the case.
Lawyers for the company said last week the government's claims can't be supported.
"We believe the allegations are without merit, and we plan on vigorously defending them," said Columbia attorney Greg Harris, who is local counsel, working with trucking company lawyer Jim Wyrsch of Kansas City, Mo. The companies are privately held.
"We think, ultimately, we'll be successful," Harris said.
In initial pleadings before U.S. Judge Joe Anderson, company lawyers characterized the government's claims as "frankly outrageous." They said, while the government may have a few examples of overweight billings, there is not enough evidence to support a charge of deliberate and widespread fraud.
The lawsuit alleges the fraud is "company-wide' and says the alleged fraud was "a corporate policy designed to fraudulently increase corporate profits at the expense of the United States."
"Defendants' false claims scheme has resulted in a substantial loss to the U.S. and its taxpayers," the lawsuit said. "Since just 2009, defendants and their affiliates are believed to have billed the federal government for $723 million worth of shipping and relocation services provided to the nation's uniformed service personnel."
The government's lawsuit did not estimate how much of that $723 million might have been false billings.
But, the lawsuit asserts that of one group of shipments reweighed by the government, "nearly 80 percent" were billed in excess of their actual weight.
The government also has located a trucking company "corporate manager" who taught employees at the Augusta warehouse how to falsify weights, government filings allege.
Trucking management not only ordered employees to falsify weights, but trained them how to do it and how to cover up their actions, according to the lawsuit.
A parallel government investigation into the two trucking firms' activities in Pearl Harbor, Hawaii, discovered the companies "consistently overbilled the U.S. by approximately 9 percent to 10 percent of the actual weight of the shipment," the lawsuit says.
The suit is a whistleblower lawsuit, meaning trucking company employees first discovered the alleged fraud and brought evidence to the attention of the U.S. Attorney's Office. Such suits are also called by a Latin phrase, qui tam, meaning basically that someone has filed a suit on behalf of the government. Such suits, as this one was, normally are filed under court seal while the government investigates.
In this case, the U.S. Attorney's Office investigated, determined it could go forward and filed the lawsuit. After being filed and sealed in April 2012, it recently became public record.
In legal pleadings, the two whistleblowers were identified as Mario Humberto Figueroa and his son, Elmer Arnulfo Figueroa, who worked at the Augusta warehouse and allegedly were instructed by trucking company management to falsify weights, the lawsuit said.
Columbia attorney Dick Harpootlian, who with attorney Bert Louthian represents both Figueroas, said the two will be entitled to up to 25 percent of any jury verdict or settlement in the case.
Despite company lawyers' assertions of no wrongdoing, Harpootlian said, "There's plenty of evidence to allow the government to go forward."
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