News | March 25, 2022

Freight Carriers Agree to Pay $6.85 Million to Resolve Allegations of Knowingly Presenting False Claims to the Department of Defense

By DCAA Staff Writer

Senior auditor John Manfredonia assisted in an investigation that resulted in the defendants, YRC Freight Inc. (YRC), Roadway Express Inc. and Yellow Transportation Inc., agreeing to pay approximately $6.85 million to resolve allegations under the False Claims Act that they knowingly presented false claims to the U.S. Department of Defense (DOD) by systematically overcharging for freight carrier services and making false statements to hide their misconduct.

The YRC defendants, transporters of industrial, commercial and retail goods, contracted with DOD to ship military freight across the country from September 2005 to October 2013. Under their contracts, the YRC defendants were paid based in part upon a shipment’s weight. The United States alleged that the YRC defendants fraudulently billed the United States for delivery charges based on higher weights when, after reweighing the shipments, they knew that the actual weights were lower. For more than seven years, the YRC defendants allegedly reweighed many shipments before final delivery, and when the reweighs showed that a shipment weight was more than the original weight, the YRC defendants charged DOD for these higher weights. But when the reweighs showed that a shipment weight was less than the original weight, the YRC defendants allegedly concealed from DOD the lower weights and instead charged DOD for the original, inflated weights. To further hide the scheme, the YRC defendants allegedly made false statements assuring DOD that they would comply with the rules requiring them to correct discrepancies uncovered during any reweigh process.

Mr. Manfredonia assisted the legal team by calculating the average shipment correction weights and resulting revenue using different parameters and reviewing multiple settlement submissions for accuracy. During the multiple years he worked with the legal team, he also prepared and presented multiple briefing to the legal team and YRC during multiple settlement negotiation meetings.

Read the Department of Justice press release here.