U.S. accuses YRC Freight of overcharging for shipments

By Mark Schremmer, Land Line associate editor | 12/17/2018

The United States has filed a complaint against YRC Freight, Roadway Express and Yellow Transportation, accusing the companies of systematically overcharging the government millions of dollars for freight carrier services.

According to the U.S. Department of Justice, the lawsuit was filed in U.S. District Court on Dec. 12 in Buffalo, N.Y. The United States alleges that for more than eight 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.”

Allegations also include that the defendants knowingly made or used thousands of false statements to conceal their overcharges.

“Those who do business with the government must do so fairly and honestly,” Jody Hunt, assistant attorney general of the Department of Justice’s civil division, said in a news release. “Knowingly overcharging the government is an affront to American taxpayers, and the Department of Justice will seek to ensure that those who engage in such misconduct are held accountable.”

Roadway Express and Yellow Transportation merged to become YRC in 2009. In 2012, the name of the company was changed to YRC Freight, which is headquartered in Overland Park, Kan.

According to the complaint, the defendants reweighed thousands of shipments and suppressed the results whenever they indicated that a shipment was acutally lighter than its original estimated weight.

“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,” said James P. Kennedy Jr., U.S. attorney 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.”

The scheme was alleged to take place from September 2005 until October 2013.

The original lawsuit in this case was filed by James Hannum, a resident of Dunkirk, N.Y., under the whistleblower provisions of the False Claims Act.

In a statement posted on its website, YRC Freight said the claims were totally without merit and that the Department of Defense currently represents less than 1 percent of YRC Freight’s annual revenue.

“We have made every effort over nearly a decade to address the government’s questions,” Jim Fry, YRC general counsel, said in a news release. “We are confident that the evidence will demonstrate YRC Freight acted consistently with our contract and all applicable guidelines. We look forward to continuing to provide essential and valuable logistics services to the U.S. government and all our customers.”

 

 

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