Since 2007 a major moving company and an affiliate bilked the U.S. government out of millions by making false claims about the weight of belongings of military personnel shipped to and from Hawaii and other locations worldwide, according to a lawsuit filed by the U.S. attorney’s office in Columbia, S.C.
Covan World-Wide Moving and its affiliate, Coleman American Moving Services, are paid by the government based on the weight of items moved. Over the years, they "systematically falsified weight certificates, shipping records and invoices by increasing shipment weights," the lawsuit said.
The alleged "potentially vast and complex fraud" first was discovered at an Augusta, Ga., shipping depot where Coleman American receives and ships items belonging to soldiers at Columbia’s Fort Jackson, according to the lawsuit and related government filings.
But the government said its investigation also revealed that the staff at a Joint Personal Property Shipping Office at Pearl Harbor became suspicious of the accuracy of shipping weights and began reweighing some deliveries.
An analysis by the Pearl Harbor office revealed that the defendants and their affiliates consistently overbilled the United States by about 9 to 10 percent of the actual shipment weight, according to the complaint.
Specific examples provided by the government of faulty shipping weight calculations include:
» A reweigh of a shipment for Army Maj. Gen. Anthony Crutchfield, chief of staff for U.S. Pacific Command, showed an actual shipment weight 2,601 pounds less than the weight charged to the United States. The shipment from Fort Rucker, Ala., to Pearl Harbor was transported by Coleman American.
» A shipment from Alexandria, Va., to Pearl Harbor for Air Force Brig. Gen. Paul McGillicuddy evidenced an actual shipment weight 1,399 pounds less than that charged. Covan was the mover.
» A move for Petty Officer Talanda Young showed an actual shipping weight 2,174 pounds less than the weight charged to the United States for the move from Jacksonville, Fla., to Pearl Harbor. Covan was the mover.
"Defendants’ false claims scheme has resulted in a substantial loss to the United States and its taxpayers," the government said in a complaint. "Since just 2009, defendants and their affiliates are believed to have billed the federal government for $723 million worth of shipping and relocation services provided to the nation’s uniformed service personnel."
The government’s lawsuit did not estimate how much of that $723 million might have been false billings.
In initial pleadings before U.S. District Judge Joe Anderson, company lawyers characterized the government’s claims as "frankly outrageous." They said that while the government may have a few examples of overweight billings, there is not enough evidence to support a charge of deliberate and widespread fraud.
The lawsuit alleges the fraud is "companywide" and says the alleged fraud was "a corporate policy designed to fraudulently increase corporate profits at the expense of the United States."
The government complaint filed Dec. 11 says Covan has 50 company-owned offices in 17 states and one U.S. territory. According to the company’s website, its Hawaii offices are in Kapolei and Hilo.
