Consumer Fraud

Judge allows whistleblower case against global trucking firm to proceed

osha whistle Judge allows whistleblower case against global trucking firm to proceedCOLUMBIA, S.C. — A U.S. District Judge in South Carolina said Tuesday a whistleblower lawsuit filed under the False Claims Act against a global trucking firm may proceed to trial. The lawsuit seeks millions of dollars from Covan Worldwide Moving, a Midland City, Ala.-based company that ships the household belongings of military and civilian personnel around the world.

In a Tuesday hearing, Judge Joe Anderson dismissed part of the lawsuit that accuses Covan of engaging “in an intracorporate conspiracy” to defraud the U.S. government, citing insufficient evidence that the company conspired with other businesses to carry out its scheme on a broad scale.

Five additional counts, however, have been allowed to stand based on allegations in the lawsuit that Covan partnered with Coleman-American Moving Services to “systematically falsify weight certificates, shipping records and invoices by increasing shipment weights.”

This fraud scheme amounted to the submission of false claims to U.S. agencies for reimbursement, the lawsuit asserts.

According to The State, the lawsuit and other court documents indicated the alleged fraud was first discovered at an Augusta, Ga., shipping depot that handles the shipping and receiving of property belonging to troops at Fort Jackson in Columbia, S.C. The lawsuit alleges the same fraud scheme was subsequently found at other Covan depots throughout the world, causing the U.S. military and American taxpayers to spend much more than they should have for the services.

The State reports that Covan and its affiliates have collected $723 million in government funds for military shipping contracts since 2009.

In 2008, Covan was one of seven trucking firms that agreed to pay the U.S. a total of $666,237 for its alleged participation in a bid-rigging scheme that artificially inflated the cost to the U.S. government of services provided by the companies. According to that False Claims Act complaint, Covan and the other companies agreed to set a high minimum when quoting the U.S. government for their services, leading the taxpayers to shoulder bigger military costs.


The State 
U.S. Department of Justice