Thursday, December 3, 2009

200 Million Dollar US Trucking Fraud Case May Go To Supreme Court

Appeal Court Upholds Conspiracy to Defraud in Transport Scam
Shipping News Feature

US – Racine, Wisconsin based consumer products manufacturer SC Johnson yesterday won in a dramatic case which began in 2004 after a gaggle of employees and trucking companies were caught stealing from the group. The transport director Milton Morris and deputy director Katherine Scheller were jointly accused of inviting bribes from haulage suppliers in return for delivery contracts. The pair then invoiced the company for the inflated shipping amounts and paid kickbacks to their accomplices.

Under state regulations the reported $102 million loss that Johnson’s suffered was doubled to a total of $203.8 million as a penalty against wrongdoers. The appeal was launched by two drayage company owners, Thomas Buske and Tom Russell who claimed the original Courts verdict was flawed. The men’s lawyers say they will now move an appeal before the Supreme Court.

The first stage of the prosecution ended in 2008 when the award was originally made. By that time seven people had been tried before the Federal Court as well as the separate civil suit by SC Johnson. Morris and Scheller were both found guilty and are due for sentencing in February. Three other defendants in the case, Peter O'Malley, Michael Rivett and Patrick Kane, owners of a haulage firm unconnected with Russel and Buske were sentenced in June for their part in the scam. Penalties ranged from 3 years probation to 28 months in prison.

Five companies under the jurisdiction of Buske and Russell were involved in the suit and Russell received a two year sentence in May after he failed to disclose during discovery for the case where large amounts of money passed through his bank had originated from or departed to. Buske is due to come before the Court shortly. SC Johnson, distributors of world famous brands such as Glade and Ziploc stated that the fraud had apparently been in place for around ten years before its discovery hence the huge amounts involved.

Pic: Copyright and Trademarks Property of SC Johnson

http://www.scjohnson.com/en/home.aspx