When you receive a fuel card as part of a contract agreement, you best believe it is going to be monitored. Doubly so if it has “U.S. Government usage only” stamped on it somewhere. Penalties can include being smacked by the “Triple Whammy” clause.
On Friday, September 16, a jury in the Eastern District of North Carolina found defendants Chad Cline and BJ Trucking Company, Inc. liable for $1,679,086 of unauthorized fuel purchases under United States Postal Service (USPS) contracts, in violation of the False Claims Act.
Fuel prices were coming off the Obama presidency peak when the scam occurred
BJ Trucking was a Greensboro, North Carolina based trucking company that hauled mail for the USPS. Doug Cline owned the company, and his son, Chad Cline, managed the day-to-day operations.
The USPS issued fuel cards that BJ Trucking was permitted to use to purchase fuel for authorized Postal Service routes, up to a designated amount. The Postal Service paid for the fuel purchased with the fuel cards.
BJ Trucking’s contracts with the USPS expressly prohibited excessive purchases on the fuel card, and expressly warned that unauthorized fuel card use could lead to False Claims Act liability.
BJ Trucking routinely used its cards between 2014 and 2015 to purchase hundreds of thousands of gallons of fuel above the authorized limits. That meant they were spending millions of taxpayer dollars that the company was not entitled to.
No one steals from the government and gets away with it unscathed
The federal government recovered a large portion of that money by withholding payments to BJ Trucking, and pursued the remainder through this lawsuit. In addition, while the company was insolvent, struggling to make its payroll and pay other bills, and indebted to the United States, it transferred hundreds of thousands of dollars to its corporate insiders, including Doug Cline, his sister, and another company that he ran.
The jury found that BJ Trucking and Chad Cline submitted or caused the submission of 29 false claims, costing the United States $1,679,086 in damages. The jury also found that BJ Trucking unlawfully transferred $439,015 to company insiders.
The False Claims Act allows the United States to recover triple the money falsely obtained, plus civil penalties for each false claim submitted. Among other things, the Fair Debt Collection Procedures Act allows the United States to void and recover preferential transfers to insiders.
You can read the press release on the lawsuit by following the link.