A federal judge in South Carolina set a tentative trial date for March or April 2015 after ruling that a lawsuit filed by two whistleblowers against a military freight shipping company can proceed.
The lawsuit, originally filed in 2012 but under seal until November 2013, claims that Covan World-Wide Moving Services Inc., and its affiliates, including Coleman American Moving Services Inc., defrauded the U.S. government out of millions.
Covan World-Wide Moving Services, headquartered in Midland City, Ala., has 50 company-owned offices in 17 states. An estimated 95 percent of Coleman’s business is military relocation services for U.S. service personnel, according to the complaint.
The whistleblowers, a father and son, who worked in Coleman’s Augusta, Ga., warehouse, allege that they were instructed to “get weights up.” Warehouse manager Mario Figueroa and his son, warehouse assistant Elmer Figueroa, claim they were ordered to falsify weight certificates in a scheme to overbill the U.S. Armed Forces for the shipping costs associated with deploying the U.S. service personnel at home and abroad.
The Figueroas allege in their complaint that some managers destroyed the correct weight certificates created by warehouse staff, then replaced them with duplicate records that increased the weight of the shipments. Both Figueroas allege they were urged to increase weight certificates, but refused to falsify documents.
They allege in the complaint that the false billing practice did not occur solely at the Augusta, Ga., facility, but that false records were created by Covan and Coleman at facilities in Alaska, Germany, Hawaii, Italy, Japan, South Korea and the United Kingdom.
In November 2013, the U.S. Attorney’s Office filed a notice of intervention. As part of the ongoing investigation, the U.S. has identified 437 instances of fraud so far “evidenced by locator card discrepancies,” the complaint states.
According to court documents, since 2009 Covan and Coleman have billed the government for $723 million for military shipments.
In his ruling on Tuesday, Feb. 25, U.S. District Court Judge Joseph Anderson Jr. rejected one of the six claims levied against the moving organization, but ruled that the other five claims could move forward.
The plaintiffs seek to recover damages arising under the False Claims Act.
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