Whistleblower complaint: Seattle freight forwarders agree to $2 million penalty to government
The firms agreed to pay the penalty to settle allegations that they falsely certified their common financial and/or administrative control status to the Military Traffic Management Command. The U.S. Army command, headquartered in Alexandria, Va., is responsible for managing the personal property moves of military service members on a global basis.
The settlement stemmed from a "whistleblower" or Qui Tam, lawsuit filed by the former comptroller of Pan American Products, Inc., which acted as factor for the accounts of the six freight-forwarding companies.
The former comptroller who revealed the relationship will receive 17 percent of the settlement amount, or $340,000. The Qui Tam statute allows private parties who reveal allegations of fraud against the government to share in any recovery.
The firms include: American Eagle Worldwide Forwarders, Inc.; Cascade International, Inc.; Shoreline, Inc.; Wold International, Inc.; Zenith Forwarders, Inc.; and Northwest Consolidators, Inc.; all of the Greater Seattle area.
In addition to the penalty, all six freight forwarders have agreed to permanently withdraw from their participation in the personal property moves of Department of Defense service members and all other programs run by the federal government.
The settlement was announced jointly by U.S. Attorney Kate Pflaumer and Col. Nonie Cabana, deputy chief of staff for Passenger & Personal Property, Military Traffic Management Command.
The U.S. Attorney's office for the Western District of Washington led the government's investigation. The office received assistance from the Defense Criminal Investigative Service, Defense Contract Audit Agency, Army Criminal Investigations Command, and the Military Traffic Management Command.
In order to be approved for military moves, carriers must disclose to the Military Traffic Management Command whether they are under common financial and administrative control with any other household goods carrier or forwarder, said Cabana. The failure to disclose honestly common controls undermines competition and is a false official statement - a criminal offense.
"The settlement of this case is an invaluable precedent," said Cabana.
Enforcement of the common controls program is vital to the receipt of quality personal property moves for Department of Defense service members, he said.
For additional information, contact Executive Assistant U.S. Attorney Lawrence Lincoln at (206) 553-4127. (FROM MILITARY TRAFFIC MANAGEMENT COMMAND PUBLIC AFFAIRS).
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