Related Federal Cases
- Citigroup Inc. Failed Living Will Review, New York NY, 2022 · Washington
- Indivior, Inc. Peddled Unapproved Opioid Fix, New York NY, 2023 · New York
- Wall Street Firms, Financial Malfeasance, New York NY, 2023 · Washington
- Christopher Ferguson, PPE Scam, New York NY, 2023 · New Mexico
- Christopher Ferguson, Scheme to Inflate Order Numbers, New York NY,… · Washington
Millions in Overcharging Scheme Uncovered in New York
BUFFALO, N.Y. – The United States has filed a complaint in the Western District of New York against YRC Freight Inc., Roadway Express Inc., and Yellow Transportation Inc., alleging that these companies systematically overcharged the government for freight carrier services and made false statements to the government that hid their misconduct, the Justice Department announced today.
The United States filed this lawsuit in U.S. District Court in Buffalo, New York. The United States alleges that, for more than seven years, the defendants defrauded the Department of Defense by millions of dollars for shipments that were actually lighter, and thus cheaper, than the weights for which the defendants charged the government.
“When a federal agency, such as the Department of Defense, enters into a service contract with a private corporation or company, the expectation is that the agreement will be administered in good faith,” stated U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “In this case, YRC did not legally fulfill its agreed-upon obligations to the Defense Department, choosing instead to line its pockets with taxpayer’s dollars. Such actions are fraudulent and illegal. This case should serve as a warning to any organization that enters into a contract with the federal government—if you try to rip us off, be prepared to pay a heavy price.”
“Those who do business with the government must do so fairly and honestly,” said Assistant Attorney General Jody Hunt of the Civil Division. “Knowingly overcharging the government is an affront to American taxpayers, and the Department will seek to ensure that those who engage in such misconduct are held accountable.”
The United States’ lawsuit alleges that the defendants reweighed thousands of shipments and suppressed the results whenever they indicated that a shipment was actually lighter than its original estimated weight. Thus, instead of charging the Department of Defense for shipments based on the correct weight, the defendants knowingly billed the government (and their other customers) based on weights that they knew to be inflated.
The original lawsuit in this case was filed by James Hannum under the qui tam, or whistleblower, provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the United States for false claims and share in any recovery. The act permits the government to intervene in such lawsuits, as it has done here. Those who violate the act are subject to treble damages and civil penalties.
This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of New York, the Defense Criminal Investigative Service, and the United States Army Criminal Investigation Division Command.
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
ðŸâ€Â’ Get the grimiest stories delivered weekly. Subscribe free →
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News