News
Federal Update
Shady broker gets jail time

By Charlie Morasch
staff writer

 

One former trucker was forced to sell off his fleet and close for business after being owed $103,812.

In another case a shipper had to pay some carriers a total of $62,000 because even though the broker had been paid, he hadn’t paid the truckers. That shipper was left holding the bag.

Employees in the Owner-Operator Independent Drivers Association’s Member Assistance Department recall countless trucking operations that lost hundreds and thousands of dollars at a time.

OOIDA Membership Department Supervisor Sylvia Dodson worked collections when the Association’s now 5-inch-thick file was started on John Russell – the one-time broker based mostly in Arkansas who evaded federal authorities for years.

Started six years ago, the file details $614,632 in unpaid freight hauled by OOIDA members and other truckers.

The drivers contend that Russell would broker loads while working the flawed system for obtaining authority while sometimes operating with a legitimate motor carrier number issued by the feds. Other times he would not even have any authority. Same with the insurance. Russell used family members for references who said he “always paid his loads.”

Before most small carriers knew it, Russell had closed up shop but reopened under a different name.

In late October, Russell was ordered to serve 51 months in federal prison and to pay $165,000 in restitution to his victims. Russell had pleaded guilty to one count of wire fraud.

“While we are very happy with the prison time handed down, we can’t help but question the small fine in light of how much money this man essentially stole from hard-working truck drivers,” said Karen England, supervisor of OOIDA’s Member Assistance Department.

“More than anything, this man’s preying on the trucking industry was made possible by the flawed authority system and lack of oversight exerted by FMCSA. This system has to be fixed.”

OOIDA’s Dodson wrote a letter on the Association’s behalf in February to the U.S. Probation Office in Arkansas. In it, she detailed Russell’s career history of avoiding payment to carriers. Between March 2002 and July 2007, Russell:

Operated under 15 different motor carrier numbers issued by FMCSA;

Owned, acted as an agent, or was otherwise connected with 46 different companies and names; Possessed 20 different addresses in eight different states; Kept 38 different phone numbers; and Used the flaw in the $10,000 bond requirement by collecting from shippers then failing to pay carriers, which would ultimately grossly exceed the $10,000 bond.

“On the surface, he looked quite legit,” Dodson wrote. “Since industry practice allows a 30-day period between delivery date, and payment date, it was very easy for Mr. Russell to book loads, arrange transportation, receive his payment, and close his doors and move on before any of the owner-operators knew they had been stiffed.”

Russell ran companies out of Bakersfield and Salinas, CA; Joplin, Columbia and Dunweg, MO; Hardy, Ozark, Springdale, Fort Smith, Little Rock and North Little Rock, AR; Colorado Springs, CO; Harrodsburg, KY; Seagoville, TX; Oklahoma City; and New Lothrop, MI.

Dodson still thinks about the victims who lost their businesses after not being paid by Russell for loads hauled.

“I wish we could have helped more people he owed get their money back,” Dodson said.

Even though the Association is thrilled that Russell is off the streets for the time being, the Member Assistance Department supervisor said his conviction represents just a small step toward cleaning up the riffraff that plagues the industry.

“It’s imperative FMCSA step up to the plate and accept responsibility in putting an end to this type of predatory behavior that brokers can engage in,” England said. LL

 

charlie_morasch@landlinemag.com

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