Freight company to pay $140,000 fine after bid-rigging guilty plea

The federal government Oct. 17 filed criminal charges in the U.S. District Court for the Eastern District of Virginia against Lift Forwarders Inc. Under the terms of a plea agreement, Lift Forwarders pleaded guilty to participating in a conspiracy to restrain trade, in violation of the Sherman Antitrust Act, and agreed to pay a $140,000 criminal fine.

Lift is the eighth company to be charged in the Justice Department’s investigation into anticompetitive and fraudulent conduct related to the Defense Department’s International Through Government Bill of Lading (ITGBL) program. According to the Justice Department, more than $12 million in criminal fines have been levied on seven companies.

Under the ITGBL program, freight forwarders file rates with the Defense Department to transport the household goods of military and civilian Defense Department personnel between the United States and foreign countries. The companies filing the lowest rates are awarded shipments of household goods to transport during a six-month summer or winter “cycle.” In recent years, the Department of Defense has spent hundreds of millions of dollars annually on such shipments.

“These charges and fines serve as a reminder that we will prosecute those who seek to deny the military the ability to purchase services in a competitive market,” said Thomas Barnett, assistant attorney general in charge of the Justice Department’s Antitrust Division.

Lift Forwarders colluded with another freight firm

According to the felony charge, Lift Forwarders and another U.S. freight forwarder conspired from May 2000 until September 2001 to file rates with the Defense Department at collusively determined levels. As part of the scheme, Lift Forwarders also agreed to allow its co-conspirator to handle the shipments awarded to Lift by the Department of Defense in exchange for a commission of $1 per hundredweight shipped by its co-conspirator.

Lift is charged with violating Section 1 of the Sherman Antitrust Act, which, at the time of the offense, carried a maximum penalty of a $10 million fine for corporations. The maximum fine level for this offense may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Seven other companies brought to justice

In addition to Lift Forwarders, according to the Justice Department, the following companies have been charged with and have pleaded guilty to criminal offenses in the U.S. District Court for the Eastern District of Virginia as a result of the investigation:

• On July 31, Air Van Lines International Inc. was charged with two counts of engaging in a scheme to conceal a material fact and agreed to pay a criminal fine of $143,040.
• On Sept. 27, 2006, Long Beach, Calif.-based Ryan’s World Inc. was charged with making false statements in documents filed with the Defense Department. The firm was sentenced to pay a $120,000 fine.
• On March 20, 2006, Woodbridge, Va.-based Executive Relocation International Inc. was charged with conspiracy to restrain trade. The company was sentenced to pay a $72,600 fine.
• On Feb. 24, 2006, Westmont, Ill.-based Allied Freight Forwarding Inc. pleaded guilty to two separate conspiracies to restrain trade. The firm was sentenced to pay a $1.04 million fine.
• On April 29, 2004, Grandview, Mo.-based Cartwright International Van Lines Inc. pleaded guilty to conspiracy to restrain trade. The company was sentenced to pay a $250,000 fine.
• On Feb. 18, 2004, the Justice Department filed superseding charges against Belgium-based Gosselin World Wide Moving N.V. and Corte Madera, Calif.-based the Pasha Group for conspiracy to restrain trade and conspiracy to defraud the government. In 2006, after their convictions were affirmed by the 4th U.S. Circuit Court of Appeals, Gosselin was sentenced to pay a $6 million fine and Pasha a $4.6 million fine.