The United States has settled with two German moving companies relating to allegations of bid rigging in violation of the False Claims Act. ITO Möbel Transport GmbH has agreed to pay $150,000, and Birkart Globistics GmbH & Co. Logistik and Service KG will pay $222,146. The companies subcontracted with American freight forwarding firms to transport within Germany the household goods belonging to military and civilian Department of Defense (DOD) personnel.
The United States intervened in two lawsuits alleging that in November 2000, Gosselin Worldwide Moving N.V., a Belgian company, through its managing director Marc Smet, and four German moving companies, including ITO and Birkart, executed a written agreement to raise the rates that they charged to American freight forwarding companies for packing and unpacking services within Germany and for services performed at German ports. The agreement further provided that none of the companies would perform work for less than the agreed-upon rate.
The American freight forwarding companies then submitted bids to the DOD at specific elevated price levels according to the instructions of the conspirators and were subsequently awarded transportation contracts based on their non-competitive bids. As a result of the conspiracy, the DOD overpaid for transportation contracts beginning in 2001 and continuing at least through 2002. To date, the United States has recovered more than $14 million in connection with this bid-rigging conspiracy.
"These settlements reflect the United States’ determination to deter schemes that undermine the military’s efforts to acquire services at a competitive price," said Tony West, Assistant Attorney General of the Justice Department’s Civil Division.
The Gosselin conspiracy was brought to the United States’ attention by two lawsuits, one of which was filed in the U.S. District Court for the Eastern District of Virginia by two German citizens who worked with one of the German moving companies, and the other which was filed in the Eastern District of Missouri by the owner of an American freight forwarding company. The suits were filed under the qui tam or whistleblower provisions of the False Claims Act, which permit private citizens, known as "relators," to sue on behalf of the government to recover federal funds that were obtained by false or fraudulent claims.
In addition to monetary payments, the settling German companies have agreed to cooperate with the government as it pursues claims against the remaining defendants, which include Gosselin Worldwide Moving N.V., Marc Smet, Andreas Christ Spedition & Möbeltransport GmbH, and the Viktoria Schäfer entities.