The U.S. Justice Department released the below information:
YRC Freight Inc. (YRC), Roadway Express
Inc. and Yellow Transportation Inc. (collectively the YRC defendants), have
agreed to pay approximately $6.85 million to resolve allegations under the
False Claims Act that they knowingly presented false claims to the U.S.
Department of Defense (DOD) by systematically overcharging for freight carrier
services and making false statements to hide their misconduct.
The YRC defendants, transporters of
industrial, commercial and retail goods, contracted with DOD to ship military
freight across the country from September 2005 to October 2013. Under their
contracts, the YRC defendants were paid based in part upon a shipment’s weight.
The United States alleged that the YRC
defendants fraudulently billed the United States for delivery charges based on
higher weights when, after reweighing the shipments, they knew that the actual
weights were lower. For more than seven years, the YRC defendants allegedly
reweighed many shipments before final delivery, and when the reweighs showed
that a shipment weight was more than the original weight, the YRC defendants
charged DOD for these higher weights. But when the reweighs showed that a
shipment weight was less than the original weight, the YRC defendants allegedly
concealed from DOD the lower weights and instead charged DOD for the original,
inflated weights. To further hide the scheme, the YRC defendants allegedly made
false statements assuring DOD that they would comply with the rules requiring
them to correct discrepancies uncovered during any reweigh process.
“We expect companies to do business with
the government honestly and fairly,” said Principal Deputy Assistant Attorney
General Brian M. Boynton, head of the Justice Department’s Civil Division.
“This settlement demonstrates the department’s continuing commitment to hold
accountable those who defraud the government and, by extension, the American
taxpayers.”
“The Defense Department entered into
contracts with YRC, Roadway, and Yellow for shipping services,” said U.S.
Attorney Trini E. Ross for the Western District of New York. “These companies,
which purposely overcharged for these services and then made false statements
to cover up their actions, are now being held accountable for their behavior.”
The civil settlement includes the resolution
of claims brought under the qui tam or whistleblower
provisions of the False Claims Act by James Hannum, an employee of Yellow
Transportation. Under those provisions, a private party can file an action on
behalf of the United States and receive a portion of any recovery. The qui
tam case is captioned U.S. ex rel. Hannum v. YRC Freight,
Inc., Roadway Express, Inc., and Yellow Transportation, Inc., Civil Action
No. 08-0811 (W.D.N.Y.). Mr. Hannum will receive $1.3 million, plus interest, as
his share of the settlement.
“Investigating schemes that undermine
the integrity of Department of Defense (DoD) procurement is a top priority for
the DoD Office of Inspector General's Defense Criminal Investigative Service
(DCIS),” said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast
Field Office. “Today's announcement demonstrates our commitment to work with
the Department of Justice and our law enforcement partners to hold companies
accountable for artificially inflating the cost of services provided to the
DoD.”
“After working extensively on this case,
DCAA is gratified the work of our auditors made a significant contribution to
the outcome of this case,” said Lead Investigative Auditor John Manfredonia for
the Defense Contract Audit Agency (DCAA).
The resolution obtained in this matter
was the result of a coordinated effort between the Justice Department’s Civil
Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s
Office for the Western District of New York, with assistance from DCIS; DCAA,
and the U.S. Army Criminal Investigation Division Command.
The matter was handled by Trial
Attorneys Benjamin Young and John F. Schifalacqua of the Justice Department’s
Civil Division and Assistant U.S. Attorney David M. Coriell for the Western
District of New York.
The claims resolved by the settlement
are allegations only and there has been no determination of liability.
You can also read about a
major Defense Department fraud and bribery case via the below link:
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