United States resolves bid rigging charges against German moving companies

The federal government and two German moving companies have settled False Claims Act charges of bid rigging. The two companies, ITO Mobel Transport GmbH (ITO) and Birkart Globistics GmbH & Co. Logistik and Service KG (Birkart), had contracted with U.S. freight forwarding businesses to move household items being shipped by American military families and civilian personnel working for Department of Defense (DOD). The firms have agreed to pay sizeable monetary settlements and to assist the government in its lawsuit against other European freight businesses.

The German moving companies allegedly entered into a written agreement with other European companies to hike the rates imposed on American freight forwarding firms for services in Germany involving packing and unpacking as well as services performed at German ports. The agreement also specified that none of the moving companies would contract for DOD work at less than the agreed-upon raised rates. The American freight forwarding companies incorporated the falsely elevated bids into their own bids to the DOD. Based on the non-competitive bids, the U.S. companies then received transportation contracts with DOD. The elaborate conspiracy resulted in the federal government’s overpayment for transportation contracts from 2001 at least through 2002.

The conspiracy came to light in two separate whistleblower lawsuits, one filed in federal court in Virginia by two employees of the German moving companies, and the other filed in Missouri by an American freight forwarding business owner. Under the Qui Tam provision of the False Claims Act, the whistleblowers will receive a portion of the government’s recovery. We previously reported on the government’s settlement with the U.S. moving companies.

For the full story go to the Department of Justice’s Press Release.