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Description: Raleigh, North Carolina criminal law lawyers represented Defendants charged with violating the False Claims Act.
A jury found Chad Cline and BJ Trucking Company, Inc. liable for $1,679,086 worth of unauthorized fuel purchases under United States Postal Service contracts, in violation of the False Claims Act. The jury also found that while BJ Trucking was insolvent and owed a substantial debt to the United States, it transferred $439,015 to company insiders—including to Defendant Doug Cline—in violation of the Federal Debt Collection Procedures Act. This jury verdict will allow the recovery of more than $5 million to the government in addition to civil penalties to be determined by the judge.
“This civil fraud trial demonstrates our firm commitment to protect taxpayer money and to guard the integrity of federal programs,” said U.S. Attorney Michael Easley. “Our office will zealously pursue those who misuse or abuse government funds.”
“We are gratified to have contributed to this investigation and applaud the exceptional work by the United States Attorney’s Office for protecting both U.S. Postal Service funds and the integrity of our fuel card program,” said Executive Special Agent in Charge Kenneth Cleevely of the U.S. Postal Service, Office of Inspector General.
BJ Trucking was a Greensboro, N.C.-based trucking company that hauled mail for the Postal Service. Doug Cline owned the company, and his son, Chad Cline, managed its day-to-day operations. The Postal Service issued fuel cards that BJ Trucking was permitted to use to purchase fuel on authorized Postal Service routes, up to a designated amount. The Postal Service, in turn, would pay for the fuel purchased with the fuel cards. Although the company’s contracts with the Postal Service 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, spending millions of Government dollars that the company was not entitled to. The Government recovered a large portion of that money by withholding payments to BJ Trucking, and pursued the remainder through this litigation.
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 United States pursued those fraudulent transfers in this litigation.
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 Federal Debt Collection Procedures Act allows the United States to void and recover preferential transfers to insiders.
The verdict obtained in this matter was the culmination of a coordinated effort between the United States Attorney’s Office and the United States Postal Service, Office of Inspector General. Assistant United States Attorneys Neal Fowler and Michael Anderson represented the United States in this case. This matter was investigated by the United States Postal Service, Office of Inspector General.
Outcome: 09/15/2022 119 Minute Entry for proceedings held before District Judge James C. Dever III in Raleigh: (DAY FOUR) Jury Trial completed on 9/15/2022. Counsel all parties present. A total of 12 jurors return to the courtroom and admonished by the court. Court charges the jury. Jurors retire to deliberate. Jurors return to the courtroom. Verdict published in open court as listed in the jury verdict form. The Court polls the jury at Defendants' request. Court released all jurors from service. (Court Reporter Amy Condon) (Sellers, N.) (Entered: 09/15/2022)