Allegations that Yellow Corp overcharged the U.S. Department of Defense were recently resolved after the freight carrier agreed to pay upwards of $6.85 million.
“We expect companies to do business with the government honestly and fairly,” Principal Deputy Assistant Attorney General Brian M. Boynton reportedly said. “This settlement demonstrates the department’s continuing commitment to hold accountable those who defraud the government and, by extension, the American taxpayers.”
Accusations by the Pentagon were brought under the False Claims Act. The DoD asserts that Yellow (YRC) knowingly overcharged the federal government to transport military freight and retail goods from September 2005 to October 2013. Government officials brought the lawsuit based on the corporation’s federal contract to bill them on shipment weight.
“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,” according to a Department of Justice press release. “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.”
The transportation corporation has struggled in varying ways dating back to its peak stock value in 2005. According to NASDAQ tracking, Yellow Corp stock has lost 99.99 percent of its value. A prominent trucking outfit, stock values recently hovered in the $7 range after bottoming out during the pandemic at $1.36. According to reports from the Wall Street Journal, Yellow fell behind competitors in the less-than-truckload market despite strong freight rates and demand during the pandemic.
The company sustained a $54.2 million loss during 2021. Reports indicate the outfit’s debt stood at more than $1.6 billion in December, a year-over-year increase of $330.5 million. It may seem ironic given the settlement under the False Claims Act, but Yellow reportedly received a $700 million pandemic relief loan in 2020 because it hauled freight for the same Pentagon suing it. A seemingly partisan investigation into the loan was prompted in the U.S. House of Representatives. Despite agreeing to pay the DoD what amounts to a $6.85 million fine, Yellow officials continue to deny any wrongdoing.
“We remain confident that we complied with the then-existing rules and our contractual obligations,” Yellow vice president and general counsel Leah Dawson reportedly stated. “While we believe we had strong defenses, we decided, in the best interests of all parties, to resolve this matter for a small fraction of the amount originally demanded.”
Headquartered in Overland Park, Kansas, Yellow ranks among the largest trucking operations in the U.S. with a workforce that reportedly exceeds 19,000.
Sources: wsj.com, wsj.com, google.finance.com
They expect companies to do business with the government “honestly and fairly?”
I’d like to see the government do business with the AMERICAN PEOPLE honestly and fairly.
Cheating the DOD, how many other customers have been cheated, should not be able to operate and have authority revoked
So they get 700 million dollars of covid dollars and then agree to pay just under a 7 million dollar fine for fraudulent billing no wonder this country has been going down the shitter!