WASHINGTON -- The United States has intervened in two lawsuits that allege a conspiracy to rig bids, fix prices and allocate the market for the transportation of household goods belonging to military and Department of Defense (DoD) personnel between Europe and the United States, the Justice Department announced today. Gosselin Worldwide Moving N.V., a Belgian company, and its managing director, Marc Smet, as well as 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 are alleged to have participated in the scheme.
The Justice Department also announced that The Pasha Group, an American transportation company, and its subsidiaries, American MOPAC International and Gateways International, and employees, Missy Donnelly and George Pasha, have paid the United States $13 million to resolve the claims brought against them in the two lawsuits. The United States alleged that the Corte Madera, Calif.-based company had agreed to Gosselin’s scheme to rig bids.
The lawsuits were filed in 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 companies, and 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. As a result of today’s settlement, the relators will be paid $2.6 million as their share of the $13 million settlement with The Pasha Group.
"The government’s intervention in the two lawsuits reflects 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 United States alleges that in November 2000 Smet and representatives of the four German moving companies executed a written agreement in order to raise the rates that they charged American freight forwarding companies to provide packing and unpacking services within Germany and services performed at ports in that country. The agreement provided that none of the companies would perform work for less than the agreed upon rate on behalf of any American freight forwarder awarded a DoD contract to move household goods.
The United States also contended that The Pasha Group joined the conspiracy and took action with Gosselin in furtherance of the aims of the conspiracy by causing two American freight forwarders to cancel their low bids, which had been submitted to DoD, and by causing dozens of other American freight forwarders to submit bids at elevated levels under threat of a boycott if they did not comply with the bidding instructions. The result of the conspiracy was that the Pentagon overpaid for transportation contracts beginning in 2001 and continuing at least through 2002.