Feds, local officials involved in indictments of household-goods carriers

| 3/6/2003

The U.S. Attorney for the Southern District of Florida, Marcos Daniel Jimenez, announced March 5 indictments against 16 household goods carriers and 74 individuals that resulted from a two-year investigation by the FBI, the U.S. Department of Transportation's Office of the Inspector General and local law-enforcement agencies.

"Today's indictments mark the most significant, concentrated attack by law enforcement against alleged corruption in the household goods moving industry ever made in DOT history," DOT Inspector General Kenneth Mead said.  "We couldn't have gotten to this point without the unified efforts of the U.S. Attorney's office, the FBI and local law enforcement. 

“Fraud in this industry affects thousands of victims every year in the United States. The unsealing of the indictments today should make it clear that law enforcement efforts are focused on eradicating these types of illegal activities."

"Today's activity illustrates the commitment of the Departments of Justice and Transportation to protecting the moving public," Annette Sandberg, acting administrator of the Federal Motor Carrier Safety Administration, said. 

Carriers found to be in violation are subject to fines of not less than $1,000 per violation for each day the violation continues.  Since October 2000, FMCSA has taken enforcement action against 20 household goods carriers and imposed fines totaling $948,000.

While FMCSA is primarily a safety agency, it is charged with oversight of the interstate moving industry. It does not have the authority to settle loss and damage claims or obtain reimbursement for consumers seeking payment for specific charges.

Legislation would increase fines

For that reason, Rep. Tom Petri, R-WI, chairman of the House Highways, Transit and Pipeline Subcommittee, introduced legislation March 4 to allow individuals or states to take action under state consumer protection laws against illegitimate interstate household movers. (See related story in today's news.)

The bill increases fines for violations. The fine for "hostage goods" would increase to a minimum of $10,000, and the DOT secretary may suspend carrier's operating authority for up to 6 months. There would also be criminal penalties of fines and imprisonment for not more than 2 years.

In a statement, Petri said hostage goods occur "where a mover low-balls an estimate, loads the consumer's goods onto his truck, drives off and then refuses to deliver the goods until paid an amount in cash that can be up to four or five times the amount of the original estimate."

A civil penalty of not less than $25,000 would apply for operating without a DOT registration under the Petri bill; a civil penalty of not less than $10,000 would be levied if a broker made an estimate before entering into an agreement with a carrier.