Pasha pays $13 million over Pentagon price fixing
The U.S. Justice Department said May 29 it has intervened in two private civil lawsuits alleging a price-fixing conspiracy in the shipment of household goods for Defense Department personnel between the United States and Europe.
The Justice Department has charged Belgium-based Gosselin Worldwide Moving, its managing director Marc Smet and four German moving firms — Birkart Globistics, ITO Mobel Transport, Viktoria International Spedition, and Andreas Christ Spedition & Mobeltransport — as conspirators in the scheme.
In the second related case, U.S. transportation firm The Pasha Group paid $13 million to resolve claims that it participated in the Gosselin scheme.
Corte Madera, Calif.-based Pasha, along with subsidiaries MOPAC International and Gateways International an employees George Pasha and Missy Donnelly, were all named in the settlement.
Two German citizens who worked for one of the accused moving firms and an American freight forwarder originally brought the two lawsuits under a U.S. law that allows private citizens to bring suit on behalf of the government to recover federal funds obtained by false or fraudulent claims.
The two Germans, Kurt Bunk and Daniel Heuser, and American Ray Ammons, will each receive $2.6 million from the Pasha settlement.
'The government’s intervention in the two lawsuits reflects the United States’ determination to combat schemes that undermine the integrity of the military’s right to acquire services at a competitive price,' said acting Gregory G. Katsas, assistant attorney general of Justice’s Civil Division.
The department alleges that in November 2000, Smet and representatives of the four German firms instituted a rate increase agreement on charges to American freight forwarders for services rendered in Germany such as packing and unpacking of the Defense personnel goods. According to the Justice Department, as part of the rate agreement, the five parties illegally set a minimum price to charge American freight forwarders for the services.
Justice also alleged that Pasha participated in the conspiracy by causing the cancellation of low bids submitted to the Defense Department by two American freight forwarders and by threat of a boycott forcing dozens of other American freight forwarders to submit elevated bids if the firms did not agree to the Gosselin-devised bidding instructions. According to the suit, the conspiracy resulted in the overcharging of for Defense transportation contracts beginning in 2001 and running through 2002.
According to Pasha, the firm 'has acted responsibly and promptly to conclude a settlement with the DOJ of all civil claims regarding that segment of our business connected to International Government Through Bills of Lading.'
In the statement, Pasha spokeswoman Joelle Vossbrink said, '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.'