The Justice Department has joined two lawsuits charging five European companies with conspiracy to rig bids and fix prices to transport the belongings of military and Defense Department personnel.
The agency also reached a $13 million (8.36 million) settlement with The Pasha Group, a transportation and logistics company based in Corte Madera, California, to resolve claims that it participated in the collusion scheme.
The scheme led the Pentagon to overpay for contracts to transport household goods between the U.S. and Europe in 2001 and 2002, the government said Thursday.
The Justice Department has brought charges against at least six companies since 2004 as part of a broad investigation into anticompetitive practices that have defrauded a Pentagon program to ship the household goods of military and civilian personnel. The Pentagon spends hundreds of millions of dollars annually on this program.
Justice said Thursday that it has joined whistleblower lawsuits filed against 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 Mobel Transport GmbH; Viktoria International Spedition; and Andreas Christ Spedition & Mobeltransport GmbH.
The lawsuits were filed under the False Claims Act in U.S. District Court for the Eastern District of Virginia by two German citizens who worked with one of the German companies, and in the Eastern District of Missouri by the owner of an American freight forwarding company. The False Claims Act allows private citizens to sue on behalf of the government to recover federal funds that were fraudulently obtained.
The plaintiffs in those cases will receive $2.6 million (1.67 million) of the $13 million (8.36 million) settlement with The Pasha Group.
In its case, Justice alleges that the five European moving companies reached an agreement in November of 2000 to raise rates for packing and unpacking services that they provided to American freight-forwarding companies under contract with the Defense Department.
The Justice Department also says that The Pasha Group joined the conspiracy by using the threat of a boycott to force two freight forwarders to cancel low bids submitted to the Defense Department, while causing dozens of others to submit elevated levels.
In a statement, The Pasha Group said it has "acted responsibly and promptly" to reach an agreement with the Justice Department to settle all claims related to its work under the Pentagon program.
"It is with pride that we continue to provide our military, government, and other customers in the transportation industry with the same high level of service that we have demonstrated over the last 60 years," the company said.
The Pentagon had no immediate comment. And Gosselin Worldwide could not be reached for comment.
