An Ohio-based carrier was handed down a stiff fine of more than half a million dollars by a U.S. district court judge. The carrier had established five “chameleon” carriers over the course of four years and also failed to report cash transactions to the Internal Revenue Service, according to federal court documents.
Enson Trading, doing business as Eternal Food Service (EFS), was established in 2009 in Cincinnati as a wholesaler and distributor to Asian restaurants in approximately 10 states. In June 2012, the company received more than $12,000 in cash payments from New Taste Buffet without filing a Report of Cash Payments Over $10,000 Received in Trade or Business (Form 8300) to the IRS. According to court documents, this continued in a 12-month period involving more than $100,000.
In addition to financial crimes, Enson Trading also committed Federal Motor Carrier Safety Administration violations. In June 2010, EFS received an unsatisfactory safety rating after FMCSA conducted a compliance review. Consequently, EFS was issued an out-of-service order in August 2010.
Just eight days before the OOS order was to go into effect, Heng Hua Trading filed an MCS-150 application and eventually incorporated and registered with FMCSA. Heng Hua immediately began delivering goods of EFS to the exact same customers and received revenue on behalf of EFS.
In February 2012, Heng Hua was also given an unsatisfactory rating after a FMCSA compliance review and given an OOS order in April 2012. In similar fashion as before, a company named National Trucking filed an MCS-150 application on the same day Heng Hua’s OOS order went into effect and took over customers of Heng Hua, which had taken over duties for EFS.
Rinse and repeat.
National Trucking was issued an unsatisfactory rating after a June 2012 FMCSA compliance review and taken out of service in August of the same year. Enter Eternal Trading, who would become a reincarnation of National Trucking. To no surprise, Eternal Trading would receive an unsatisfactory rating after a compliance review in December 2012 and an OOS order in February 2013.
This pattern would continue at least two more times with a company named Aspiron and another named FC Logistics. The connection between the companies was not acknowledged until July 2014.
According to the U.S. Department of Transportation, EFS agreed to pay a criminal fine of $525,000 and a forfeiture of more than $215,000.
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