LOUISVILLE, Ky. – The owners of three moving companies, located in Bullitt and Hardin Counties in Kentucky, were sentenced today to serve 15 months in prison, serve a three year period of supervised release, and pay a $7,500 fine, for overbilling the United States Army for Household Good Shipment moves of Soldiers. There is no parole in the federal prison system.
“This is a victory for taxpayers and a warning to those who would line their pockets by engaging in a fraud against the United States, ” stated United States Attorney Russell Coleman. This office is committed to working with our federal partners in pursuing criminal charges and financial penalties against dishonest government contractors.”
Senior Judge Charles R. Simpson issued the sentence.
“These sentencings should serve as a deterrent to defense contractors at any level who would engage in dishonest and fraudulent practices in order to increase their profit margin,” said Brian Hauck, Special Agent-in-Charge of the U.S. Army Criminal Investigation Command's North Central Fraud Field Office. "We will diligently pursue those engaged in criminal activity that impacts the integrity of U.S. Government programs and resources within our purview."
Lonnie Curl, 63, of Brooks, Kentucky, and William Kenneth Montgomery, 59, of Shepherdsville, Kentucky are liable for a restitution amount totaling $132,413.26 to the United States Army.
“U.S. Armed Forces members sacrifice a great deal while serving their country, including making frequent duty station moves with their families and household goods,” said John F. Khin, Special Agent in Charge, Southeast Field Office, Defense Criminal Investigative Service. “It is unacceptable for any contractor to manipulate military Permanent Change of Station moves through corrupt practices to line their pockets while providing essential transportation services to our Warfighters. These sentences highlight the effectiveness of DCIS investigations, in concert with our law enforcement partners, to combat fraud, waste, and abuse throughout the Department of Defense.”
Both defendants admitted in open court in their plea agreements that they owned Lynn Moving and Storage, E-Town Moving and Storage, and Shadowens Moving and Storage. The three companies provided household good shipment (HHG) moves to members of the military through the transportation office located at Ft. Knox in Radcliff, Kentucky.
Curl and Montgomery fraudulently increased the weight of HHG shipments and overbilled the United States Department of the Army for HHG shipments. Curl and Montgomery instructed employees to increase the weight of HHG shipments by adding fuel prior to a final shipment weight and adding a pallet of paper weighing between 1000 to 2000 pounds, among other methods.
Curl and Montgomery submitted the fraudulently inflated weight tickets to the Army for payment, and caused fraudulently inflated payments to be issued to Lynn Moving and Storage, E-Town Moving and Storage, and Shadowens Moving and Storage. The amount of the overpayments was $132,413.26.
Both Curl and Montgomery acted as managers and supervisors of five or more employees that were encouraged and instructed to participate in increasing the weight of HHG shipments billed to the United States Department of the Army.
Further, the companies and their owners admitted to violating the False Claims Act in January and agreed to pay $264,826.52 in civil penalties and damages.
