Broker gets jail time; ordered to pay restitution

| Friday, January 14, 2005

Wire fraud and false claims convictions landed a Colorado freight broker 21 months in jail along with an order to pay $5,869 in restitution.

David Richard Shubert, owner and manager of Shubert Corp. of Denver, was sentenced in U.S. District Court in Denver to 21 months in prison, three years supervised release, and ordered to pay $5,869 in restitution based on his guilty plea in October 2004. He admitted to wire fraud and making false claims in a bankruptcy case.

Shubert pleaded guilty on two of the 13 charges filed against him with the remaining 11 charges dismissed, according to docket information. The charges ranged from wire fraud, mail fraud and making false statements in a bankruptcy case.

From 1999 to 2001 Shubert at one time or another allegedly operated three different brokerage businesses based out of the Denver area, according to the indictment filed by the U.S. Attorney’s Office.

The indictment lays out Shubert’s “scheme” to defraud trucking companies. The indictment alleged that, among other things that Shubert told employees to keep amounts owed to smaller trucking companies to less than $2,000 because “the victims were not likely to pursue payment.”

Shubert operated his first business off a broker bond and FMCSA authority for both exempt and non-exempt freight. Once claims stacked up, his bond was revoked. But Shubert allegedly continued to provide the no-longer-valid bond and authority documentation to prospective carriers.

In Shubert’s first brokerage outfit – Lands Edge Transportation – once trucking company representatives started showing up at the physical address, he allegedly had the sign taken down outside and instructed employees to tell people coming by that they were not affiliated with Lands Edge and didn’t know where it was located.

He then rented another location for only one Lands Edge employee and allegedly told the employee to answer victim trucker’s phone call complaints and make up excuses for non-payment, according to the indictment.

Shubert then opened a second brokerage business called Global Transway and carried out the same scheme as he did under Lands Edge Transportation, according to allegations in the indictment. Once enough truckers showed up trying to collect, he packed up and headed to another location and started operating under his third broker firm, Rocky Mountain Freightways.

According to the indictment, his employees were told to deny affiliation with him or any of the previous Shubert broker firms. They were told to make up excuses for non-payment and if any questioned him or complained, they were fired.

The indictment alleged that Shubert was spending the money he received from shippers and failed to pay to the truckers on rent on his luxury apartment, wages to his ex-wife who was not employed at any of his companies, personal investments and entertainment for himself and others.

And in June 2001, Shubert filed bankruptcy on behalf of his companies claiming he had no income between 1999 and 2001, among other alleged inaccuracies.

– By Jami Jones, Land Line staff
jami_jones@landlinemag.com

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