YRC Allegedly Overcharged Department of Defense

The Department of Justice has sued YRC and its subsidiary companies Yellow Transportation and Roadway Express for allegedly overcharging for freight carrier services and for lying to the government to hide its alleged misconduct.

YRC is being accused of defrauding the Department of Defense by millions of dollars over a seven-year period by overcharging for shipments based on weight and subsequently lying about it to the DOD. The company allegedly reweighed thousands of shipments and suppressed the results whenever the shipment was lighter than the initial estimate, thereby charging DOD based on knowingly inflated weights.

“When a federal agency, such as the Department of Defense, enters into a service contract with a private corporation or company, the expectation is that the agreement will be administered in good faith,” stated James P. Kennedy Jr., U.S. Attoreny for the Western District of New York. “In this case, YRC did not legally fulfill its agreed upon obligations to the Defense Department, choosing instead to line its pockets with tax payer’s dollars. Such actions are fraudulent and illegal.”

The original lawsuit in the case was filed by a whistleblower named James Hannum under the False Claims Act, which allows private citizens to bring suits on behalf of the United States for false claims and share in the recovery. Hannum was previously employed by YRC. DOJ initiated a nine-year investigation into the claims, culminating in the current accusations.

YRC issued a statement about the lawsuit contesting the accusations saying, “These claims are totally without merit.” The company said it cooperated in the nine-year investigation and made every effort to address the government’s questions. YRC’s business with DOD only constitutes 1% of the company’s annual revenue, according to the company.

“We are confident that the evidence will demonstrate YRC Freight acted consistently with our contract and all applicable guidelines. We look forward to continuing to provide essential and valuable logistics services to the U.S. government and all our customers,” the company stated.