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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

Tuesday, May 3, 2016

Menlo Worldwide Services Inc. And Its Subcontractor Estes Pay the U.S. $13 Million to Resolve False Claims Act Allegations

SACRAMENTO, Calif. — A company and its subcontractor have paid a total of $13 million to resolve allegations under the False Claims Act that they overcharged the government in various ways under the Defense Transportation Coordination Initiative contract in part by billing the cost of moving freight by air when it was actually shipped by ground, Acting United States Attorney Phillip A. Talbert announced today.

Menlo Worldwide Services Inc. has paid the United States $10 million, and Estes Forwarding Worldwide, on behalf of itself and its parent Estes Express Lines, has paid $3 million.

“This settlement demonstrates our commitment to protecting the integrity of federal contracts and ensuring the government only pays for the actual services rendered as required under the contract,” said Acting U.S. Attorney Talbert.

The civil settlement resolves a lawsuit filed in the Eastern District of California under the qui tam, or whistleblower, provisions of the False Claims Act. These provisions allow private citizens to bring civil actions on behalf of the United States for false claims and share in a portion of the government’s recovery. The whistleblowers in this case will collectively receive $2.86 million of the recovery proceeds.

This settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of California, the United States Transportation Command, the Defense Criminal Investigative Service, the Defense Contract Audit Agency, the U.S. Army Criminal Investigation Command, and the Department of Justice’s Civil Division, Commercial Litigation Branch. Assistant United States Attorneys Kelli Taylor and Colleen Kennedy handled the matter for the United States.

The claims settled by this agreement are allegations only, and there has been no determination of liability. Menlo Worldwide Services Inc., Estes Forwarding Worldwide, and Estes Express Lines cooperated with the United States’ investigation of this matter.

Press Release Number: 
2:13-cv-539 KJM
Updated May 3, 2016