Freight forwarders nailed for bid rigging

Seven freight forwarding companies have agreed to pay US$666,237 to resolve allegations of bid rigging in the US, and to co-operate with the US govt in its pursuit of claims against one Belgian and four German transportation/logistics companies.

Air Land Forwarders will pay $72,513; Arpin International Group, $59,017; Covan International, $51,358; Jet Forwarding, $50,751; and SIRVA companies – Allied Freight Forwarding, Global Worldwide and North American Van Lines – will pay $432,598.

In addition to these payments, each of the seven freight forwarding companies have agreed to co-operate with the government as it pursues claims against Belgium-based Gosselin Worldwide Moving and Germany-based Birkart Globistics, ITO Möbel Transport, Viktoria International Spedition and Andreas Christ Spedition & Möbeltransport, all of which allegedly participated in the bid rigging scheme.

The seven companies have contracts with the Defence Department to transport household goods belonging to military and civilian personnel between Europe and the US.

The US intervened in actions alleging that Belgium-based Gosselin Worldwide Moving, via its managing director Marc Smet.

Four German moving companies, executed a written agreement in November 2000 to raise the rates that they charged these freight forwarding companies for packing and unpacking services within Germany and for services performed at German ports and that none of the companies would perform work for less than the agreed-upon rate.

The US contends that the seven settling freight forwarding companies furthered the conspiracy by submitting bids to the Pentagon at specific elevated price levels according to the instructions of other conspirators and that they were subsequently awarded transportation contracts based on their non-competitive bids.

The result of the conspiracy was that the Defence Dept overpaid for transportation contracts between 2001 and 2002.

The US previously settled all claims against The Pasha Group, its subsidiaries and employees for $13 million.

A portion of the settlement with SIRVA is to resolve civil claims against Allied Freight Forwarding in connection with its 2006 guilty plea to two criminal antitrust charges.

Allied pleaded guilty to conspiring with another freight forwarder not to compete against each other when submitting bids to the Defence Dept for the transportation of military household goods between Germany and the US, and between Italy and the US.

In addition, Allied pleaded guilty to conspiring with three other freight forwarding companies in which the three submitted bids on Allied’s behalf and Allied assumed responsibility for transporting all cargo between the continental US and Hawaii that was awarded to the three freight forwarders.

“These settlements reflect the United States’ determination to combat schemes that undermine the integrity of the military’s right to acquire services at a competitive price,” says Gregory Katsas, acting Assistant Attorney General of the Justice Dept’s Civil Division.

The Gosselin conspiracy was brought to the US’s attention by two lawsuits: one filed by Kurt Bunk and Daniel Heuser, two German citizens who worked with one of the German moving companies, and the other filed by Ray Ammons, who owned an American freight forwarding company.

They filed the suits under the qui tam provisions of the False Claims Act, which permits private citizens to sue on behalf of the government to recover federal funds that were fraudulently obtained. Login or register to post comments.

Source: Eyefor Transport news

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