Employees accuse military freight shippers of fraudulent billing scheme

By Clarissa Hawes, Land Line staff writer | 1/23/2014

Whistleblowers have filed a lawsuit against an international moving company and its affiliate that provide government and military moving and shipping services, alleging they were ordered to falsify weight certificates in a billing scheme to defraud the U.S. Government.

The companies named in the lawsuit are Covan World-Wide Moving Services Inc., which has 50 company-owned offices in 17 states, and its affiliate, Coleman American Moving Services Inc. An estimated 95 percent of Coleman’s business is military relocations for U.S. service personnel, according to the complaint

According to court documents, two employees who worked in Coleman’s Augusta, Ga., warehouse allege in the complaint that they were instructed to “get weights up” in a scheme to overbill the U.S. Armed Forces out of substantial moneys by “systematically overbilling the U.S. Armed Forces for the shipping costs associated with deploying U.S. service personnel at home and abroad.”

The employees named as plaintiffs in the lawsuit are Mario Figueroa, warehouse manager, as well as his son, Elmer Figueroa, a warehouse assistant, at Coleman’s Augusta, Ga., facility. Their whistleblower complaint was originally filed in U.S. District Court in South Carolina in April 2012, but was filed under seal until November 2013 when 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.

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.

The plaintiffs seek to recover damages arising under the False Claims Act (FCA). Other counts include common law fraud, breach of contract, unjust enrichment and disgorgement claims.

Copyright © OOIDA