POST Online Media Lite Edition


United States sues freight companies for overcharging of shipments

Staff Writer |
The United States has filed a complaint in the Western District of New York against YRC Freight, Roadway Express, and Yellow Transportation, 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.

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.

The United States further alleges that the defendants knowingly made or used false statements concealing their overcharging practices to the Department of Defense.

Specifically, 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 defendants also allegedly made false statements to induce the Department of Defense to use them as freight carriers and further knowingly made or used false statements to improperly avoid their obligations to correct inflated invoices and return overpayments.

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.

What to read next

Kerry Logistics launches new LCL Rail Freight Service between Europe and China
UPS Freight offers guaranteed service to 50 origin and 51 destinations
FedEx to increase shipping rates for express, ground and freight services