Military moving company pays $5 million to settle whistleblower claims

On July 9, 2015, the United States Attorney’s Office for the District of South Carolina announced the settlement of fraud claims against Covan World Wide Moving, Inc., Coleman American Moving Services, Inc., and related entities.

The federal false claims case arose from a whistleblower lawsuit filed by employees from the company’s  Augusta, Georgia facility who witnessed the falsification of weight tickets used to bill the government for the cost of relocating U.S. service members at home and abroad. The case alleged that the company engaged in widespread fraud by increasing the weights of household good shipments and then submitted the inflated weights to the government for payment.

The False Claims Act allows private citizens with knowledge of fraud to file a lawsuit to help recover money for the government. The government can recover actual damages and penalties of three times the actual damages and up to $11,000 per false claim. The settlement announced includes repayment of actual damages and penalties.

Whistleblowers or “relators” are entitled to share in the recovery received by the government. In this case, the two relators collectively will receive 25%, or $1.25 million, of the settlement funds. Richard A. Harpootlian, P.A. and the Louthian Law Firm represented the whistleblowers and assisted the government in litigating the case.

Click here to read the United States’ full announcement of the settlement.

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