12-08-05 -- NFI Interactive, Inc. -- Guilty Plea -- News Release

Vineland Trucking Company Admits Defrauding Anheuser-Busch

CAMDEN – A South Jersey trucking company pleaded guilty today to defrauding Anheuser-Busch out of revenue the brewing company should have received under transportation contracts between the two companies, U.S. Attorney Christopher J. Christie announced.

Interactive Logistics, Inc. of Vineland and Cherry Hill, doing business as NFI Interactive, Inc, pleaded guilty to three counts of mail fraud. William J. Hughes, Jr., an attorney appearing on behalf of the company before U.S. District Judge Joseph E. Irenas, admitted that Anheuser-Busch was defrauded of about $226,000, and that NFI’s senior executives and managers formulated and executed the scheme.

The scheme involved the under reporting of revenue that Anheuser-Busch should have received from NFI for hauling goods for third parties, according to Assistant U.S. Attorney Karl H. Buch. On each count of mail fraud, NFI faces a maximum penalty of five years of probation and a $500,000 fine; NFI also faces an order of restitution. Judge Irenas scheduled sentencing for Jan. 13.

Anheuser-Busch, which has a brewing plant in Newark, entered into a series of contracts with NFI for the transport of its beer via tractor-trailer from Newark to various locations, according to the Information to which NFI pleaded guilty. Part of the agreements required NFI to use trailers dedicated to hauling Anheuser-Busch beer for transporting third-parties’ products on return trips after unloading the Anheuser-Busch beer – a practice called “backhauling.”

The “backhaul clauses” of the contracts required NFI to pay Anheuser-Busch up to 80 percent of revenues derived from the shipping of third-parties’ goods. The contracts also set a guaranteed minimum annual revenue that Anheuser-Busch would receive from NFI’s backhauling. Those minimum guaranteed revenues varied, and stood at $400,000 in one year, for example, and were increased to $600,000 when the hauling contracts were renegotiated by NFI and Anheuser-Busch in December 2001.

Hughes admitted that beginning in about December 2001, certain NFI senior executives directed managers of the Anheuser-Busch account to implement a scheme to withhold backhauling revenue generated by NFI above the minimum guarantee. The scheme was carried out in several ways that manipulated the amount of backhaul revenue that was reported to Anheuser-Busch, including the creation of a separate method of accounting, and generating and transmitting false invoices to Anheuser-Busch.

The end result, Hughes admitted, was the withholding of backhaul revenue that was required to be shared from Anheuser-Busch that exceeded the minimum guaranteed amounts as specified in the contracts. Between December 2001 and May 2004, NFI defrauded Anheuser-Busch out of more than $226,400, Hughes admitted.

Christie credited Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Weslie Wiser, Jr., and Postal Inspectors with the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Thomas C. Van De Merlen, with developing the case against NFI.

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