Freight companies as the targets of whistleblower claim

On Behalf of | Dec 24, 2018 | Whistle-blower Claims

We have reported many stories that relate to false claims that have allegedly been submitted to federal programs under the qui tam provision of the False Claims Act. The FCA applies to any type of government contract. Procurement fraud can harm not only taxpayers, but federal agencies or the military through unfairly depleting resources. Private businesses frequently seek contracts with the federal government to provide goods and services to government agencies.

The Department of Justice has announced that it is pursuing a lawsuit against several freight companies to recover taxpayer money that was allegedly obtained for shipments of goods for the Department of Defense. A whistleblower initially brought forth the allegations.

Inflated weight

Specifically, the DOJ believes that the freight companies relied on the estimated weight of shipments when seeking payment from the Department of Defense. Federal officials say that the freight companies reweighed thousands of shipments to learn the actual weight of the goods, which often proved to be lower than the estimated weight.

Despite learning the actual weight, the DOJ claims that the shippers charged the government the higher, “estimated” weight, and made false statements to the government to receive the inflated rates for the shipments. Moreover, authorities believe that the companies failed to return taxpayer money to the Department of Defense for the overcharges or properly amend invoices when the true weight of shipments was discovered.

Government agencies expect private contractors to administer their contractual obligations in good faith, according to a recent DOJ press release. In discussing the allegations against the shipping companies, the DOJ says that shippers chose to unlawfully obtain excess profits at the expense of taxpayers.

The False Claims Act dates back to the Civil War. The government enters into countless contracts with private entities. With the volume of business between the private sector and government agencies, federal officials are often unable to uncover acts of potential fraud. The FCA allows private individuals with information and evidence of fraudulent acts to bring forth claims on behalf of the government. Whistleblowers who initiate these claims are entitled to receive a percentage of the taxpayer money that is recovered as a result of the claim.


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