WASHINGTON – Seven freight forwarding companies – Air Land Forwarders, Arpin International Group, Covan International, Jet Forwarding, and SIRVA, the parent company of Allied Freight Forwarding, Global Worldwide and North American Van Lines – agreed to pay the United States $666,237 for allegations of bid rigging in violation of the False Claims Act, the Justice Department announced today.
As a result of the settlement, Air Land Forwarders will pay $72,513; Arpin International Group: $59,017; Covan International: $51,358; Jet Forwarding: $50,751; and the SIRVA companies: $432,598. The seven companies have contracts with the Defense Department to transport household goods belonging to military and civilian personnel between Europe and the United States.
The United States intervened in actions alleging that Gosselin Worldwide Moving N.V., a Belgian company, via its managing director Marc Smet, and four German moving companies, executed a written agreement in November 2000 to raise the rates that they charged these freight forwarding companies for packing and unpacking services within Germany and for services performed at German ports, and that none of the companies would perform work for less than the agreed-upon rate.
The United States contends that the seven settling freight forwarding companies furthered the conspiracy by submitting bids to the Pentagon at specific elevated price levels according to the instructions of other conspirators and that they were subsequently awarded transportation contracts based on their non-competitive bids. The result of the conspiracy was that the Defense Department overpaid for transportation contracts beginning in 2001 and continuing at least through 2002. The United States previously settled all claims against The Pasha Group, its subsidiaries and employees for $13 million.
A portion of the settlement with SIRVA is to resolve civil claims against Allied Freight Forwarding in connection with its 2006 guilty plea to two criminal antitrust charges. Allied pleaded guilty to conspiring with another freight forwarder not to compete against each other when submitting bids to the Defense Department for the transportation of military household goods between Germany and the United States, and between Italy and the United States. In addition, Allied pleaded guilty to conspiring with three other freight forwarding companies in which the three submitted bids on Allied’s behalf and Allied assumed responsibility for transporting all cargo between the continental United States and Hawaii that was awarded to the three freight forwarders.
"These settlements reflect the United States’ determination to combat schemes that undermine the integrity of the military’s right to acquire services at a competitive price," said Gregory G. Katsas, acting Assistant Attorney General of the Justice Department’s Civil Division.
The Gosselin conspiracy was brought to the United States’ attention by two lawsuits. One was filed in the U.S. District Court for the Eastern District of Virginia by Kurt Bunk and Daniel Heuser, two German citizens who worked with one of the German moving companies. The other was filed in the Eastern District of Missouri by Ray Ammons, who owned an American freight forwarding company. They filed the suits under the qui tam provisions of the False Claims Act, which permits 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, each of the seven freight forwarding companies agreed to cooperate with the government as it pursues claims against Gosselin Worldwide Moving N.V., Smet and four German moving companies – Birkart Globistics GmbH & Co. Logistik und Service KG, ITO Möbel Transport GmbH, Viktoria International Spedition, and Andreas Christ Spedition & Möbeltransport GmbH – that allegedly participated in the scheme.