UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 1:20-cv-23242-BB

UNITED STATES OF AMERICA ex rel. SEDONA 

PARTNERS LLC, 

Plaintiff,

vs.

ABLE MOVING & STORAGE, INC.; ARPIN 

INTERNATIONAL GROUP, INC.; CARTWRIGHT 

INTERNATIONAL VAN LINES, INC.; COLEMAN 

AMERICAN MOVING SERVICES, INC.; DEWITT 

COMPANIES LIMITED, LLC; HILLDRUP 

COMPANIES, INC.; J.K. MOVING & STORAGE 

INC.; NEW WORLD INTERNATIONAL, LTD.; 

PARAMOUNT TRANSPORTATION SYSTEMS; 

PAXTON VAN LINES, INC.; AND WESTERN 

EXPRESS FORWARDING, LLC,

Defendants.

FIRST AMENDED COMPLAINT FOR MONEY DAMAGES AND CIVIL PENALTIES 

FOR VIOLATIONS OF THE FALSE CLAIMS ACT

DEMAND FOR JURY TRIAL

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TABLE OF CONTENTS

Page No.

I. INTRODUCTION...........................................................................................................3

II. JURISDICTION AND VENUE.......................................................................................5

III. PARTIES ........................................................................................................................5

A. Plaintiff..................................................................................................................5

B. Defendants.............................................................................................................5

IV. BACKGROUND.............................................................................................................8

A. The Merchant Marine Act of 1936, the Cargo Preference Act of 1954, 

and corresponding regulations................................................................................8

B. The Federal Centralized Household Goods Traffic Management Program 

(“CHAMP”)...........................................................................................................9

1. Request for Offers (“RFOs”) and the bidding process. .............................. 10

2. Certified waivers for using foreign flag vessels.......................................... 11

3. U.S. General Services Administration’s Household Goods Tender of 

Services (“HTOS”)........................................................................................ 13

4. Penalties......................................................................................................... 15

V. OVERVIEW OF THE SCHEME...................................................................................15

A. Part One of the Scheme: The submission of the low-ball bids..............................16

B. Part Two of the Scheme: Submission of fraudulent flag waivers. ........................21

C. Further evidence shows that Defendants abandoned the scheme for fear of 

DOS uncovering the fraud....................................................................................22

VI. CAUSES OF ACTION..................................................................................................25

FIRST CAUSE OF ACTION ON BEHALF OF THE UNITED STATES 

VIOLATIONS OF THE FEDERAL FALSE CLAIMS ACT PRESENTING 

FALSE CLAIMS, AGAINST ALL DEFENDANTS (31 U.S.C. § 3729(a)(1)(A)).........25

SECOND CAUSE OF ACTION ON BEHALF OF THE UNITED STATES 

VIOLATIONS OF THE FEDERAL FALSE CLAIMS ACT MAKING OR USING 

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FALSE RECORDS OR STATEMENTS MATERIAL TO PAYMENT OR 

APPROVAL OF FALSE CLAIMS, AGAINST ALL DEFENDANTS 

(31 U.S.C. § 3729(a)(1)(B))...........................................................................................26

VII. PRAYER FOR RELIEF ................................................................................................27

VIII. DEMAND FOR JURY TRIAL......................................................................................28

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Plaintiff UNITED STATES OF AMERICA (“United States”), by and through Relator

Sedona Partners LLC, alleges as follows:

I. INTRODUCTION

1. Relator Sedona Partners LLC brings this action on behalf of the United States to 

recover damages as a result of the submission by Defendants ABLE MOVING & STORAGE, 

INC.; ARPIN INTERNATIONAL GROUP, INC.; CARTWRIGHT INTERNATIONAL VAN 

LINES, INC.; COLEMAN AMERICAN MOVING SERVICES, INC.; DEWITT COMPANIES 

LIMITED, LLC; HILLDRUP COMPANIES, INC.; J.K. MOVING & STORAGE INC.; NEW 

WORLD INTERNATIONAL, LTD.; PARAMOUNT TRANSPORTATION SYSTEMS;

PAXTON VAN LINES, INC.; and, WESTERN EXPRESS FORWARDING, LLC (collectively 

“Defendants”) of thousands of fraudulent bids to obtain shipping contracts through the United 

States Department of State (“DOS”) under the supervision and guidance of the United States 

General Services Administration (“GSA”).

2. Many federal civilian offices pay for and assist their employees and families in 

relocating and moving their belongings through a GSA program—the Centralized Household 

Goods Traffic Management Program (“CHAMP”). Private shipping companies, referred to as 

“Transportation Service Providers” (“TSPs”) participate in the CHAMP program and compete for 

shipping contract awards. In providing these shipping services, participants are subject to various 

strict guidelines and requirements that are overseen and set forth in DOS, GSA, and federal laws 

and regulations. One of the key requirements TSPs must follow is the “America-First” policy, 

which is based on federal maritime and cargo laws. This policy requires that the companies use, 

and work with, “U.S. flag vessels” (American shipping carriers), except in unique circumstances 

where a waiver is obtained for use of a “foreign flag vessel.” Foreign flag vessels are much cheaper 

than American carriers, and do not follow U.S. laws and customs. For example, U.S. flag carriers 

are required to have U.S. Citizen crews and pay payroll taxes, and crew members pay U.S. income 

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taxes. U.S. flag carriers are subject to Coast Guard regulations and environmental regulations, and 

U.S. flag carrier ships must be built (with some exceptions) and repaired in U.S. shipyards. 

3. This “America-First” policy has been in place for decades and is codified in 

multiple federal statutes, regulations, and guidelines. 

4. With 225 embassies and consulates around the world, DOS uses this program 

thousands of times per year to relocate DOS employees by shipping their belongings both 

domestically and internationally. 

5. From 2008 through 2018, Defendant TSPs carried-out a fraudulent scheme wherein 

hundreds of millions of dollars were illegally taken from taxpayers, American workers, and 

American companies because foreign flag vessels were routinely and illegally used by the TSPs,

instead of U.S. flag vessels. 

6. The scheme was carried out through two false submissions to the government: 

First, Defendant TSPs submitted fraudulent low-ball bids in order to capture awards for the very 

competitive shipping routes, referred to as “lanes,” across international waters. 

7. Second, in order to profit on their low-ball bids, Defendant TSPs submitted

thousands of false foreign flag waivers, requesting permission to use lower costing foreign flag 

vessels, by fraudulently certifying that no U.S. flag vessels were available to carry-out shipments

and/or that a foreign flag vessel was necessary to meet delivery requirements. 

8. Defendants knowingly submitted theses fraudulent waiver requests, because they 

knew that at that time DOS did not have the resources to audit every waiver request. These waivers 

were routinely granted to Defendants, resulting in hundreds of millions of dollars going to foreign 

companies instead of American companies. 

9. Law abiding American businesses, which federal law prioritizes, have been locked 

out of shipping lane contracts because of this fraudulent scheme. Not only did the conduct hurt 

the America-First policy, it also resulted in violation of numerous federal laws and guidelines as 

well as GSA contractual terms, policies, and waiver requirements. Only recently, upon DOS 

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reemphasizing the US flag vessel requirements, have some Defendants stopped the fraudulent 

practice, as evidenced by their dramatically increased rates. 

II. JURISDICTION AND VENUE

10. This Court has jurisdiction over the claims raised in this Complaint under 31 U.S.C. 

§ 3730(b) and 3732(a) which confer jurisdiction on this Court for actions brought under the federal 

False Claims Act and authorize nationwide service of process.

11. Venue is proper under 31 U.S.C. § 3732(a), as Defendants transacted business and 

engaged in the conduct alleged in this District, where a key DOS dispatch agency is located. 

Further, Defendants arranged many of the shipments and provided documentation to DOS related 

to their services in this District. 

III. PARTIES

A. Plaintiff

12. Plaintiff in this action is the United States of America, by and through Relator 

Sedona Partners LLC. 

13. Relator is an insider in the TSP business and has direct and independent knowledge 

of the information on which these allegations are based. Relator voluntarily provided the 

information contained in this Complaint to the government in advance of filing. 

B. Defendants

14. Able Moving & Storage Inc. (“Able”) is based in Manassas, Virginia and was 

incorporated in 1987 under the laws of Virginia. Able provides international and domestic shipping 

and prides itself for its frequently awarded contracts from the Department of State. Able is the 

fastest growing moving company in the Mid-Atlantic, with most of its growth coming from the 

international division. It accumulates about $50 million in annual revenue. 

15. Arpin International Group, Inc. (“Arpin”) provides household goods moving and 

storage services. Arpin is based in West Warwick, Rhode Island and was incorporated under the 

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laws of Rhode Island. The Company offers international moving and handles approximately 

14,000 GSA and military relocations per year.

16. Defendant Cartwright International Van Lines, Inc. (“Cartwright”) provides 

transportation and logistics services. It is based in Grandview, Missouri and was incorporated 

under the laws of Missouri. The Company offers domestic and international residential and 

military household goods moving, relocation services, global logistics, freight forwarding, and 

mobility solutions. Cartwright is the leading provider of United States military moving services.

17. Defendant Coleman American Moving Services (“Coleman”) is headquartered in 

Midland City, Alabama and incorporated in 1960. The company offers both domestic and 

international moving services. Over the years, it has handled over 12,000 corporate and 

government transfers from all over the world. It is among the top five privately owned van lines 

with offices and representatives in 175 countries, and 47 allied branded locations.

18. Defendant DeWitt Companies Limited, LLC (“DeWitt”) has been providing 

domestic and international relocation moving services of household goods to the GSA and the 

DOS since 2012. It began operations in San Diego, California, where it is headquartered, and was

incorporated under California law in 2002. It is an approved TSP and available through GSA’s 

CHAMP. DeWitt completes global moves for 5,000 customers annually and operates in over 100 

countries. 

19. Defendant Hilldrup Companies, Inc. (“Hilldrup”) provides trucking services and 

corporate and residential moving services, such as lump sum programs, relocation assistance, 

storage, and automobile transportation services. Hilldrup is based in Stafford, Virginia, was

incorporated under the laws of Virginia, and is a stockholding representative of UniGroup, a $1.7 

billion transportation and relocation services company. Hilldrup provides moving services 

internationally, and has provided employee relocation services to the United States government 

for over 70 years. Hilldrup advertises participating in GSA’s CHAMP program, noting it offers 

highly competitive rates for relocating federal employees. Hilldrup also works with the 

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Department of Defense and claims to be both GSA and Department of Defense approved to 

provide relocation services internationally.

20. Defendant JK Moving & Storage, Inc. (“JK Moving”) provides residential, 

commercial, and international moving services. JK Moving is based in Sterling, Virginia and was 

incorporated under the laws of Virginia. The Company offers moving trucks, storage services, 

and management teams, and advertises international and employee relocation services. JK Moving 

promotes its international services by touting affiliation with FIDI, IAM, and OMNI. JK Moving 

recently was awarded a $175,000 contract by the DOJ.

21. Defendant New World International, Ltd. (“New World”) is headquartered in 

Chicago, Illinois and was incorporated in 1986. The company offers international services with 

regional coordination offices which work with an extensive network of service partners in 150 

countries and 18 main locations, as well as an affiliated service center in Orlando, Florida. New 

World promotes its international services by touting affiliation with FIDI and other associations. 

22. Defendant Paramount Transportation Systems (“Paramount”) claims to be a 

leading provider of global moving services with strategically located operational facilities and 

customer service centers throughout the United States, Canada, Asia and Europe. Paramount 

specializes in the movement of household goods, personal effects, vehicles and pets for employees 

of multi-national and Fortune 500 corporations, as well as working with agencies within the United 

States government. As a licensed global freight forwarder, Paramount manages almost 45,000 

shipments annually, touching more than 170 countries. 

23. Defendant Paxton Van Lines, Inc. (“Paxton”) offers logistics, freight forwarding, 

warehousing, distribution, brokerage, and cargo services. It is headquartered in Springfield, 

Virginia and was incorporated under the laws of Virginia. Paxton Van Lines, Inc. operates 

worldwide as Paxton Companies, which includes the Paxton International division. Paxton 

International advertises more than 40 years of freight forwarding and international export 

experience, with offices in Afghanistan and Iraq. Paxton advertises that it has FIDI affiliation and 

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FAIM certification. Paxton has been awarded $1.7 million in combined obligations of all task 

orders under GSA contract GS33F0004S for movement of employee household goods.

24. Defendant Western Express Forwarding, LLC (“Western Express”) is based in 

Marlboro, Maryland, just a few miles from the capital building. It provides international and 

domestic moving services, primarily focusing on military personnel moves. Western Express is 

an approved carrier for DOS and GSA.

IV. BACKGROUND

A. The Merchant Marine Act of 1936, the Cargo Preference Act of 1954, and 

corresponding regulations

25. The Merchant Marine Act of 1936 provides the GSA authority to set forth 

regulations requiring agencies not to pay or reimburse an officer or employee for travel or 

transportation expenses associated with a foreign vessel, unless documentation indicates the 

necessity to do so. See 46 U.S.C. § 55302(b). 

26. The Cargo Preference Act of 1954 requires that: “at least 50 percent of the gross 

tonnage of all Government generated cargo -- meaning cargoes procured, furnished, or financed 

by the United States Government -- shall be transported on privately owned, U.S.-flag commercial 

vessels to the extent such vessels are available at fair and reasonable rates. The ‘at least 50 percent’ 

requirement is applicable to the extent such vessels are available at fair and reasonable rates, as 

determined by the Maritime Administration.” (The Cargo Preference Act of 1954 refers to Section 

901(b) of the Merchant Marine Act of 1936, as amended in 46 U.S.C. § 1241(b), and codified in 

various subsequent documents 46 USC § 55305; 46 C.F.R. Part 381.)

27. The CHAMP Program includes cargoes that are subject to the Cargo Preference 

Act pursuant to 46 C.F.R. Part 381.2(b)(1), and (4). The Cargo Preference Act of 1954 is applied 

to and administered by all Federal departments and agencies (except the Department of Defense). 

See 46 C.F.R. Part 381.3; see also https://www.maritime.dot.gov/cargo-preference/militarycargoes/cargo-preference-laws-and-regulations. Each Department or Agency is responsible for 

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ensuring compliance, including contractors. See id. An effective measure to promote compliance 

is to include the appropriate cargo preference clauses in all program contracts and documentation. 

Id. Documentation on all government-impelled cargo moves must be reported to the Maritime 

Administration within 20 working days from date of loading on all shipments loaded inside the 

United States and 30 working days for shipments loaded outside the United States. Id. This 

reporting requirement applies to cargo moving on a foreign flag OR U.S. flag vessels. Id. Further, 

the Department of Transportation, Maritime Administration (“MARAD”) division provides that 

this is done “as a way to track and weed out potential violations.” See 

https://maritime.dot.gov/cargo-preference/military-cargoes/cargo-preference-laws-and-regulations

(emphasis added)

28. The Code of Federal Regulations clearly states that the preference for privately 

owned U.S. Flag vessels applies to contractors and subcontractors working with the U.S. 

government. See 48 C.F.R. Part 47.503(a)(1).

B. The Federal Centralized Household Goods Traffic Management Program 

(“CHAMP”)

29. The Department of State has 307 U.S embassies, consulates, and diplomatic 

missions around the world that require a shipping service for relocation of civilian executive 

branch employees’ Household Goods (“HHG”). The shipping services often include moving 

services, home sale services, property management, and office relocation assistance. To assist 

federal agencies in relocating employees and transporting their personal and household goods 

between duty stations, GSA is in charge of administering the CHAMP program. The program

operates through using TSPs, which are qualified and credentialed American private shipping 

companies vetted by GSA. The TSPs must apply to GSA for approval to participate in the 

program.

30. CHAMP is subdivided into two separate programs – Domestic and International. 

The Domestic program handles both interstate and intrastate shipments between locations in the 

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continental United States and Alaska. The International program covers shipments between the 

continental United States and locations elsewhere in the world, including Hawaii, Guam, Puerto 

Rico, the Virgin Islands, and foreign countries. 

31. Each program, Domestic and International, requires a separate application. GSA 

evaluates TSPs based on their financial stability, business experience, quality assurance, and 

knowledge of the Household Goods Tender of Service (“HTOS”), which is set forth by GSA and 

provides the rules and requirements for performing services as a provider in CHAMP. 

32. Each participating TSP must submit either a domestic or international application 

worksheet form. See https://www.gsa.gov/travel/agency-services/employee-relocation/householdgoods-transportation/for-transportation-service-providers/approval-requirements. Included in this form 

is the HTOS Questionnaire, which asks about provisions in the HTOS. In order to attain GSA 

International Approval, a TSP must file and attest to the answers contained in the HTOS Tender 

of Service Questionnaire. If shipping internationally, a TSP will have to answer the International 

HTOS Questionnaire.

1. Request for Offers (“RFOs”) and the bidding process.

33. Every year, GSA issues a Request for Offers (“RFOs”) to all TSPs approved to 

participate in CHAMP. The RFOs solicit rate proposals from TSPs for both domestic and 

international shipping lanes. During subsequent bidding periods, TSPs may submit offers to 

provide household goods transportation services to federal civilian agencies. The rate offers are 

restricted to the GSA-approved scope of operation (e.g., only TSPs approved to participate in the 

international program can propose rates for international shipping lanes). 

34. Certain federal civilian agencies, including DOS, have additional reporting and 

shipping requirements for the transportation of employees’ household goods. These agencies 

regularly work with GSA to promulgate Standing Route Orders (“SROs”), which outline the 

additional requirements. The SROs are then issued in conjunction with the annual RFO solicitation 

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process. TSPs submitting offers for shipping lanes subject to SROs must abide by the requirements 

stated in both the RFO and SROs. 

35. Once a TSP has been federally approved for either international or domestic 

shipments by GSA to participate in CHAMP, the participating TSPs selected take full 

responsibility and agree to all federal rules and requirements outlined in the HTOS guidelines.

36. Once the applicable bidding period closes, GSA evaluates the various rate offers, 

or bids, for each shipping lane and awards contracts to TSPs with the most competitive offers. 

TSP rate offers are evaluated and selected according to GSA’s Value Index (“VI”) system, which 

assesses offers based on the TSP’s prior service performance, as well the attractiveness of its 

proposed rates. To calculate prior service performance, GSA employs a Customer Satisfaction 

Index (“CSI”), which, using data from the previous twelve-month period, measures employee and 

agency satisfaction with a given TSP’s service in comparison to the average level of performance. 

If data is unavailable for a given TSP, that TSP will be considered unindexed and its prior service 

performance will not be a factor in the evaluation of its submitted rate offers. 

37. The TSP with the lowest applicable GSA tariff or tender is awarded a single factor 

rate (SFR), the rate used in computing the accepted transportation for the award. The TSP’s rate 

offer for the surface HHG is represented by a percentage as a single factor rate based on Base-Line 

Rates. 

2. Certified waivers for using foreign flag vessels

38. Among other RFO requirements, TSPs shipping goods internationally must use 

U.S. flag vessels for the ocean portion of overseas shipments. If a U.S. flag vessel is not available 

to provide the required service, TSPs can request permission to use foreign flag vessels prior to 

shipment. To request permission, a TSP must submit to DOS a “Request for Approval of Use of a 

Foreign Flag Vessel.” It also must certify in writing that US flag shipping is not available or that 

the use of the foreign flag shipping is necessary to meet delivery requirements. 

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39. The use of U.S. flag vessels is more expensive than the use of foreign flag vessels. 

As a result, TSPs applying for waiver of the U.S. flag vessel requirement must also submit 

supporting documentation of any changes in the original proposed rate due to the use of foreign 

flag shipping. 

40. In the result of an increase or decrease of original rates awarded, a TSP is required 

to submit documentation of differences in rates between the foreign vessel rate and the rate 

originally awarded. 

41. A TSP is responsible for requesting a waiver by submitting to DOS a certification 

attesting to the unavailability of a U.S. flag vessel. The following are examples of the waivers:

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3. U.S. General Services Administration’s Household Goods Tender of 

Services (“HTOS”)

42. Pursuant to the statutes above, GSA oversees and sets forth the governing 

guidelines and regulations TSPs are subject to as CHAMP participants. GSA sets forth these 

guidelines pursuant to the U.S. General Services Administration’s Household Goods Tender of 

Service (“HTOS”). 

43. The HTOS provides that all participants in the program agree to be bound by the 

HTOS terms and conditions. (See HTOS, Aug. 2010 Ed.) 

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The HTOS further provides, 

[t]he TSP shall use vessels of United States registry for the ocean portion of 

overseas shipments and book shipments for container or below deck stowage. 

However, when it is determined that the use of a vessel of United States registry 

will not provide the required service, the TSP shall request permission to use a 

Foreign Flag vessel prior to start of shipment.

Requests for permission to use a Foreign Flag vessel shall be made to RTO on the 

form ‘Request for Approval of Use of a Foreign Flag Vessel’ (see Appendix C). 

Approval will be granted only when the TSP certifies in writing that US flag 

shipping is not available or the use of foreign flag shipping is necessary to meet 

delivery requirements.

HTOS, Aug. 2010 Ed.

44. The HTOS provides detailed rate information relating to foreign flag vessels:

Adjustments in rates will be permitted when rate differentials are involved due to 

the use of Foreign Flag Shipping. A Justification Certificate (see Appendix C) is 

required for the use of a Foreign Flag vessel. When increases or decreases occur in 

rates due to the use of Foreign Flag Shipping, billing and documentation submitted 

in connection with the GBL shipment will have differences between the Foreign 

Flag vessel rate and the rate used in computing the accepted transportation single 

factor rate (SFR). The ocean freight bill which must be submitted to support each 

GBL and the rate will be adjusted in favor of the TSP or the Government on the 

basis of this bill. 

An example of the adjustment required in the event of an ocean rate increase would 

be: 

International GBL Shipment Adjustment Example 

SHIPMENT: 3,000 lb, 450 cu ft., Single Factor Rate = $32.00 per cwt 

STEP 1. Original Charges Due: 3,000 lb x $32.00 per cwt = $960.00 

STEP 2. Ocean rate used in constructing the effective GBL rate: 81 cents per cu ft 

STEP 3. Paid to Foreign Flag Ocean TSP as stated on the ocean freight bill and 

computed in accordance with the measurement rule stated in tariff governing the 

rate: 90 cents per cu ft (9 cents per cu ft difference) 

STEP 4. Supplemental charge for ocean freight 450 cu ft at 9 cents per cubic foot 

= $40.50. 

STEP 5. Total charges due TSP: $960.00 + $40.50 = $1,000.50

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Id. at § 8.3. 

45. The International HTOS Questionnaire that all aspiring TSPs must complete which 

reemphasizes the importance of these requirements, asks the following questions:

33. When determined that the use of a vessel of the United States 

registry will not provide the required service, the participant will request 

permission to use foreign flag vessel prior to start of movement. (TRUE)

100. Adjustments in rates will not be permitted when rate differentials 

are involved due to the use of Foreign Flag Shipping. (FALSE)

See International HTOS Questionnaire, HHG International Application at

https://www.gsa.gov/travel/agency-services/employee-relocation/household-goods-transportation/fortransportation-service-providers/approval-requirements .)

4. Penalties

46. Also demonstrating the importance and materiality of these requirements, in 

addition to the Federal False Claims Act, there are significant penalties for submitting false 

statements in conjunction with TSP services. “An applicant shall submit an application in its own 

name for approval as a TSP. A firm that on its own behalf or on behalf of an agent (a) falsifies, 

conceals, or covers up by any trick, scheme, or device a material fact; (b) makes any false, fictitious 

or fraudulent statement or representation; or (c) makes or uses any false writing or document 

knowing the same to contain any false, fictitious or fraudulent statement or entry on any part of 

the application or on any document furnished pursuant to this HTOS is punishable by fines, 

imprisonment, or both.” 18 U.S.C. § 1001; see also HTOS, Aug. 2010 Ed. § 2.7. 

V. OVERVIEW OF THE SCHEME

47. It is estimated that DOS arranges over 18,000 international shipments of employee 

belongings each year. Defendant shipping companies have systematically violated the AmericaFirst requirements by carrying out a two-part scheme: First they submit artificially low bids in 

order to knock out the competition and secure the shipping routes, or lanes.

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48. Second, having been aware all along that the bids they use to secure the lanes are 

too low to cover U.S. flag vessel fees, once they are asked to complete a shipment, they falsely 

certify that no U.S. flag vessel can complete the shipment in order to use the much cheaper foreign 

flag vessels.

49. Defendants capitalized on the fact that DOS historically did not have the resources 

to audit CHAMP bid submissions. In doing so, companies, such as Defendants, are estimated to 

have siphoned from taxpayers approximately $360 million, which they unlawfully gave to foreign 

shipping vessels over the past 10 years—taxpayer money that should have gone to U.S. flag vessel 

carriers. This is broken down in the following manner: 18,000 DOS shipments per year; $5,000-

$15,000 per move, usually across the ocean, resulting in conservatively 40% of shipments 

fraudulently going to foreign cargo carriers, totaling $36 million per year in false claimssubmitted.

A. Part One of the Scheme: The submission of the low-ball bids.

50. As explained above, twice a year, TSPs can submit bids through the RFO process 

for an award of different shipping lanes (e.g., D.C to China, Miami to the United Kingdom, etc.). 

DOS has 225 embassies and consulates worldwide, therefore, there are thousands of lanes at issue. 

One or more TSPs are awarded each lane. Once a lane award is secured through GSA, DOS 

managers arranging an employee move are required to use one of the TSPs that have been awarded

the lane. 

51. The process is highly competitive and companies such as Defendants submit lowball bids to capture the lane awards. In fact, the rates submitted by Defendants are so low they 

could only be cost-effective if they intend to unlawfully use cheaper foreign flag cargo vessels. 

Defendants have no intention of using the more expensive American carriers, knowing DOS will 

not audit the submissions. Defendants, through the rigged bids, are awarded the most lucrative 

lanes and lock out law-abiding competition. 

52. The below examples of submissions to obtain lane awards highlight low-ball 

bidding practices for what is known as the surface, or “ocean-going” portion of the shipment lanes

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from Washington D.C. to London. The fair market rate of transport for that portion of the lane 

should have been approximately $7,200 at that time. These fair market amounts are based on 

standard costs that all Defendants would be subject to. There is very little variability between 

TSPs as far as the costs that they must incur for such shipments. This is because most of the work 

of the shipment is done by other companies—i.e., sub-contractors. Most notably, none of the TSPs 

have their own ocean shipping vessels, and therefore all must use the relatively small set of ocean 

shipping companies. 

53. Despite this standard cost range of $7,200 for the Washington D.C. to London 

surface or ocean-going portion of the lane, the companies below submitted bids approximately 

25% below those market rates.

According to the GSA’s TMSS HHG query results run in March 2019, Able Moving and Storage, 

Inc. would be entering into the transaction losing $1,503.29. 

According to the GSA’s TMSS HHG query results run in March 2019, Coleman American Moving 

Services would be entering into the transaction losing $1,859.34. 

Company Name Telephone Tender C.S.I V.I. Surface

% Charge

ABLE MOVING & 

STORAGE, INC.

703-330-3772 118 111.22 113.4645 144% $5,696.71

Company Name Telephone Tender C.S.I V.I. Surface

% Charge

COLEMAN 

AMERICAN MOVING 

SERVICES

334-983-6500 CM19 95.59 105.1313 135% $5,340.66

Company Name Telephone Tender C.S.I V.I. Surface

% Charge

JK MOVING &

STORAGE

800-673-8487 SF17 96.16 105.0785 136 

%

$5,380.22

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According to the GSA’s TMSS HHG Query Results run in March 2019, JK Moving & Storage 

would be entering into the transaction losing $1,819.78. 

According to the GSA’s TMSS HHG query results run in March 2019, DeWitt Companies 

Limited, LLC would be entering into the transaction losing $1,701.10. 

According to the GSA’s TMSS HHG query results run in March 2019, Western Express would be 

entering into the transaction losing $1,701.10. 

54. Numerous other examples highlight evidence of this fraudulent scheme in the 

context of the entire cost of the shipping lane, which includes in addition to the surface or oceangoing cost listed in the above examples, the costs associated with the 500 lbs. air shipment and the 

auto shipment. In 2019, Defendant Paramount submitted a rate of $13,820 for the Washington 

D.C. to China lane. Factoring in the use of a U.S. Flag carrier, the cost of shipment on this lane 

would be $13,985—slightly more than Paramount’s rate. Paramount would only be able to make 

a profit on a rate of $13,820 if it knew in advance that it intended to use foreign flag carriers, which 

would lower its cost to $9,771.

55. In 2016, Defendant Paramount submitted a rate of $10,672 for the Washington D.C. 

to United Kingdom lane. Factoring in the use of a U.S. Flag carrier, the cost of shipment on this 

lane would be $15,730—significantly more than Paramount’s rate. Paramount would only be able 

to make a profit on a rate of $10,672 if it knew in advance that it intended to use foreign flag 

carriers, which would lower its cost to $9,965.

Company Name Telephone Tender C.S.I V.I. Surface

% Charge

DEWITT COMPANIES 

LIMITED, LLC

888-777-4826 DWCD 0.00 36.9062 139% $5,498.90

Company Name Telephone Tender C.S.I V.I. Surface

% Charge

WESTERN EXPRESS 202-888-6500 WE17 0.00 37.1712 139% $5,498.90

Case 1:20-cv-23242-BB Document 149 Entered on FLSD Docket 08/20/2021 Page 19 of 29
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56. In 2019, Defendant Paramount submitted a rate of $12,054 for the Washington D.C. 

to Germany lane. Factoring in the use of a U.S. Flag carrier, the cost of shipment on this lane 

would be $15,730—significantly more than Paramount’s rate. Paramount would only be able to 

make a profit on a rate of $12,054 if it knew in advance that it intended to use foreign flag carriers, 

which would lower its cost to $11,436.

57. In 2019, Defendant Paramount submitted a rate of $13,359, for the Washington 

D.C. to Netherlands lane. Factoring in the use of a U.S. Flag carrier, the cost of shipment on this 

lane would be $15,315—significantly more than Paramount’s rate. Paramount would only be able 

to make a profit on a rate of $13,359 if it knew in advance that it intended to use foreign flag 

carriers, which would lower its cost to $12,181.

58. In the same year, Defendant New World submitted a rate of $10,672 for the 

Washington D.C. to United Kingdom lane. Factoring in the use of a U.S. Flag carrier, the cost of 

shipment on this lane would be $15,730—significantly more than New World’s rate. New World 

would only be able to make a profit on a rate of $10,672 if it knew in advance that it intended to 

use foreign flag carriers, which would lower its cost to $9,965.

59. Defendant Paxton participated in the same fraudulent scheme in 2019 when it 

submitted a rate of $14,204 for the Washington D.C. to the United Kingdom lane. Factoring in 

the use of a U.S. Flag carrier, the cost of shipment on this lane would be $15,730—more than 

Paxton’s rate. Paxton would only be able to make a profit on a rate of $14,204 if it knew in advance 

that it intended to use foreign flag carriers, which would lower its cost to $9,965.

60. Similarly, in 2019, Defendant JK Moving submitted a rate of $14,741 for the same 

Washington D.C. to the United Kingdom lane. Factoring in the use of a U.S. Flag carrier, the cost 

of shipment on this lane would similarly be more than JK Moving’s rate, and evidences that JK 

Moving never intended to use a U.S. Flag carrier. 

61. Further in 2019, Defendant JK Moving submitted a rate of $15,509 for the 

Washington D.C. to Germany lane. Factoring in the use of a U.S. Flag carrier, the cost of shipment 

Case 1:20-cv-23242-BB Document 149 Entered on FLSD Docket 08/20/2021 Page 20 of 29
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on this lane would be $15,759—slightly more than JK Moving’s rate. JK Moving would only be 

able to make a profit on a rate of $15,509 if it knew in advance that it intended to use foreign flag 

carriers, which would lower its cost to $11,436.

62. In 2019, Defendant Hilldrup submitted a rate of $11,977 for the Washington D.C. 

to the United Kingdom lane. Factoring in the use of a U.S. Flag carrier, the cost of shipment on 

this lane would be $15,703—significantly more than Hilldrup’s rate. Hilldrup would only be able 

to make a profit on a rate of $11,977 if it knew in advance that it intended to use foreign flag 

carriers, which would lower its cost to $9,965. 

63. Defendant Hilldrup further evidenced fraud that same year when it submitted a rate 

of $13,743 for the Washington D.C. to Germany lane. Factoring in the use of a U.S. Flag carrier, 

the cost of shipment on this lane would be $15,759—significantly more than Hilldrup’s rate. 

Hilldrup would only be able to make a profit on a rate of $13,743 if it knew in advance that it 

intended to use foreign flag carriers, which would lower its cost to $11,436. 

64. This is shown yet again, where Defendant Hilldrup submitted a rate of $14,434 for 

the Washington D.C. to Netherlands lane. Factoring in the use of a U.S. Flag carrier, the cost of 

shipment on this lane would be $15,315—slightly more than Hilldrup’s rate. Hilldrup would only 

be able to make a profit on a rate of $14,434 if it knew in advance that it intended to use foreign 

flag carriers, which would lower its cost to $12,181. 

65. Similarly, in 2019, Defendant Cartwright submitted a rate of $11,209 for the 

Washington D.C. to the United Kingdom lane. Factoring in the use of a U.S. Flag carrier, the cost 

of shipment on this lane would be $15,730—significantly more than Cartwright’s rate. Cartwright 

would only be able to make a profit on a rate of $11,209 if it knew in advance that it intended to 

use foreign flag carriers, which would lower its cost to $9,965. 

66. Defendant Cartwright submitted a rate of $12,284 for the Washington D.C. to the 

United Kingdom lane. Factoring in the use of a U.S. Flag carrier, the cost of shipment on this lane 

would be $15,315—significantly more than Cartwright’s rate. Cartwright would only be able to 

Case 1:20-cv-23242-BB Document 149 Entered on FLSD Docket 08/20/2021 Page 21 of 29
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make a profit on a rate of $12,284 if it knew in advance that it intended to use foreign flag carriers, 

which would lower its cost to $12,181. 

67. The evidence shows that Defendant Western Express also submitted fraudulent 

low-ball bills in 2019 with a rate of $13,897 for the Washington D.C. to China lane. Factoring in 

the use of a U.S. Flag carrier, the cost of shipment on this lane would be $13,985—$12 more than 

Western Express’ rate. Western Express would only be able to make a profit on a rate of $13,897 

if it knew in advance that it intended to use foreign flag carriers, which would lower its cost to 

$9,771.

68. Similarly, in 2019, Defendant Western Express submitted a rate of $10,642 for the 

Washington D.C. to the United Kingdom lane. Factoring in the use of a U.S. Flag carrier, the cost 

of shipment on this lane would be $15,730—significantly more than Western Express’ rate. 

Western Express would only be able to make a profit on a rate of $10,642 if it knew in advance 

that it intended to use foreign flag carriers, which would lower its cost to $9,965.

69. Further, Western Express submitted a rate of $12,822 for the Washington D.C. to 

Netherlands lane in 2019 as well. Factoring in the use of a U.S. Flag carrier, the cost of shipment 

on this lane would be $15,315—significantly more than Western Express’ rate. Western Express 

would only be able to make a profit on a rate of $12,822 if it knew in advance that it intended to 

use foreign flag carriers, which would lower its cost to $12,181.

B. Part Two of the Scheme: Submission of fraudulent flag waivers.

70. In order to profit on the low-ball bids, Defendants needed to falsely certify the need 

to use foreign carriers, which are must cheaper, by submitting the required waiver form to DOS. 

Pursuant to the laws cited above, and the GSA contract, each TSP certifies that the waiver request

is accurate and truthful as submitted. 

71. The guidelines and GSA contract make clear that foreign flag vessels are meant to 

be the rare exception to the rule requiring U.S. flag vessels. “Approval will be granted only when 

Case 1:20-cv-23242-BB Document 149 Entered on FLSD Docket 08/20/2021 Page 22 of 29
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the TSP certifies in writing that a U.S. flag carrier is unavailable or the use of foreign flag shipping 

is necessary to meet delivery requirements.”

72. Defendants relied on DOS’s inability to audit these waivers so they could continue 

to use cheaper foreign vessels and secure lanes with low-ball bids. They knowingly submitted 

thousands of fraudulent waivers claiming U.S. flag vessels were not available, when in fact they 

were. As a result, law-abiding TSPs have been locked out of shipping lanes and have been unable 

to compete with these companies’ unscrupulous practices. 

C. Further evidence shows that Defendants abandoned the scheme for fear of 

DOS uncovering the fraud.

73. In 2018, Relator and others began raising concerns about the fraudulent practices. 

As a result, DOS began reemphasizing the U.S. flag requirements during industry conferences and 

through DOS publications. On March 27, 2019, DOS held a mandatory TSP meeting. Emanuel 

(Manny) Hazel was introduced as the Manager of Foreign Flag Waivers, a newly created position 

amidst the crackdown to show DOS’s recognition of the flagrant abuse of the CHAMP program 

through submission of fraudulent bids and waivers.

74. In response, some Defendants have recently stopped carrying out the scheme in fear 

of a crackdown. This shift is evidenced by the dramatic increase in their rates which now 

incorporate the cost of using American ships. The following chart shows this shift—where some 

Defendant companies barely broke-even or made a minor profit after switching to U.S. flag 

vessels. Other companies’ rates skyrocketed for fear of DOS uncovering the fraud:

Case 1:20-cv-23242-BB Document 149 Entered on FLSD Docket 08/20/2021 Page 23 of 29
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75. The change in submissions is especially notable in the following shifts highlighted 

in the above chart: In 2016, Defendant JK Moving submitted a rate of $13,436 for the Washington 

D.C. to China lane. The rates then increased exponentially in 2019 to a rate of $24,185. 

76. In 2016, Defendant Hilldrup submitted a rate of $13,974 for the Washington D.C. 

to China lane. The rates increased exponentially, as shown above, when in 2019 it submitted the 

rate of $18,811 for the same lane.

Case 1:20-cv-23242-BB Document 149 Entered on FLSD Docket 08/20/2021 Page 24 of 29
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77. In 2016, Defendant Paxton submitted a rate of $13,974 for the Washington D.C. to 

China lane, yet in 2019 submitted a rate of $15,279.

78. In fact, Defendant JK Moving, one of the biggest offenders in the fraudulent 

scheme, lost the vast majority of its awards after the 2019 rumors of a crackdown. While 

participating in the low-ball scheme, JK Moving was routinely awarded over 150 lanes at a time. 

However, the latest round of bidding in December of 2019 reflects JK Moving abandoning the 

scheme and increasing its rates, in stark contrast to its prior bids. This shift resulted in JK Moving 

receiving only 3 lane awards. 

79. Communication between top executives further evidences the fraud. In a late 2019 

meeting between Dawn Fontano of Crown Moving and Daniel Johnson, Director of Customer 

Service at Defendant Worldwide Moving & Storage, New World International, Ltd., Johnson 

admitted that New World had “lost a huge amount of money” since paring back its use of foreign 

flag vessels. Johnson admitted that abandoning the scheme impacted 40% of its international 

business. 

80. In early 2020, after the crackdown and having lost projected earnings, Edwin Oems, 

President of New World International, Ltd. resigned when New World was forced to comply with 

rates using U.S. flag vessels. New World lost money on many of its lanes—over $500,000 on 

revenues of $6 million—because it had submitted low-ball bids in February of 2019 anticipating 

the ongoing use of false foreign flag waivers, before the March 27 meeting where DOS signaled 

the fraud would no longer be tolerated. 

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VI. CAUSES OF ACTION

FIRST CAUSE OF ACTION

ON BEHALF OF THE UNITED STATES

VIOLATIONS OF THE FEDERAL FALSE CLAIMS ACT

PRESENTING FALSE CLAIMS,

AGAINST ALL DEFENDANTS

(31 U.S.C. § 3729(a)(1)(A))

81. Relator incorporates herein by reference and realleges the allegations stated in this 

Complaint.

82. Defendants knowingly caused to be presented false claims for payment or approval 

to an officer or employee of the United States.

83. Defendants knowingly (as defined in 31 U.S.C. § 3729(b)(1)) presented false 

records and statements, including but not limited to contractual bids for shipping lane awards, 

waivers, and supporting documents to, and through the CHAMP program, administered and 

overseen by GSA and DOS for the benefit of civilian employees and affiliates of the United States 

government working for DOS. 

84. Defendants violated federal laws, regulations and guidelines requiring the use of 

U.S. flag vessels, and the requirement that TSPs submit accurate bids as well as truthful 

certification that U.S flag vessels were not available in certain circumstances. Defendants falsely 

submitted their need for using foreign flag vessels for their own profit and gain in violation of the 

Merchant Marine Act of 1936, The Cargo Preference Act of 1954 and the corresponding 

regulations to these Acts, the U.S. General Services Administration’s Household Goods Tender of 

Services guidelines, applicable to all TSP contracts, and the GSA contracts Defendants agreed to 

enter into for the benefit of the United States government. 

85. Defendants knowingly submitted false bids and certifications in order to obtain lane 

awards and increase their profits.

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86. Defendants knowingly made, used, and caused to be made and used false 

certifications that their claims, and all documents and data upon which those claims were based, 

were accurate, and were supplied in full compliance with all applicable statutes and regulations.

87. The conduct of Defendants violated 31 U.S.C. § 3729(a)(1)(A) and was a 

substantial factor in causing the United States to sustain damages in an amount according to proof.

SECOND CAUSE OF ACTION

ON BEHALF OF THE UNITED STATES

VIOLATIONS OF THE FEDERAL FALSE CLAIMS ACT

MAKING OR USING FALSE RECORDS OR STATEMENTS

MATERIAL TO PAYMENT OR APPROVAL OF FALSE CLAIMS, AGAINST ALL DEFENDANTS

(31 U.S.C. § 3729(a)(1)(B))

88. Relator incorporates herein by reference and realleges the allegations stated in this 

Complaint.

89. Defendants knowingly (as defined in 31 U.S.C. § 3729(b)(1)) made, used, or caused 

to be made or used false records or statements material to false or fraudulent claims. Defendants 

knowingly violated laws, regulations and guidelines which require use of U.S. flag vessels, absent 

certain unique circumstances, as a condition and part of each GSA contract entered into to 

participate in the CHAMP program. Defendants knowingly submitted to the United States 

government, through GSA and DOS, inaccurate low-ball bids and fraudulent certifications relating 

to the alleged need to use foreign flag vessels in order to obtain lane awards.

90. Defendants knowingly made, used, and/or caused to be made and used false records 

and statements, including but not limited to contractual bids for shipping lane awards, waivers, 

and supporting documents to, and through the CHAMP program, administered and overseen by 

GSA and DOS for the benefit of civilian employees and affiliates of the United States government 

working for DOS. 

91. The conduct of Defendants violated 31 U.S.C. § 3729(a)(1)(B) and was a 

substantial factor in causing the United States to sustain damages in an amount according to proof.

Case 1:20-cv-23242-BB Document 149 Entered on FLSD Docket 08/20/2021 Page 27 of 29
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VII. PRAYER FOR RELIEF

WHEREFORE, Plaintiff the United States of America, by and through Relator, prays for 

relief against Defendants as follows:

Pursuant to the False Claims Act:

TO THE UNITED STATES OF AMERICA AND QUI TAM PLAINTIFF:

1. For civil penalties of up to the maximum statutory amount permitted to be imposed 

for each and every false and fraudulent claim from 2008-2018 for award and 

payment of shipping lane contracts through the Centralized Household Goods 

Traffic Management Program presented, or caused to be presented, submitted and 

certified to the United States General Services Administration and Department of 

State;

2. For treble damages resulting to the United States Department of State based on the 

conduct of Defendants;

3. For pre- and post-judgment interest;

4. For reasonable attorneys’ fees, costs, and expenses incurred in bringing this case; 

and

5. That Qui Tam Plaintiff be awarded the maximum percentage of recovery allowed 

pursuant to the False Claims Act.

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VIII. DEMAND FOR JURY TRIAL

Relators hereby demand a jury trial on all issues so triable.

Dated: August 20, 2021 Respectfully Submitted,

 /s Ryon M. McCabe

Ryon McCabe (FL 009075)

rmccabe@mccaberabin.com

MCCABE RABIN, P.A. 

1601 Forum Pl #201

West Palm Beach, FL 33401

Telephone (561) 659-7878

COTCHETT, PITRE & MCCARTHY, LLP

Justin T. Berger (admitted pro hac vice)

Sarvenaz J. Fahimi (admitted pro hac vice)

San Francisco Airport Office Center

840 Malcolm Road

Burlingame, CA 94010

LAW OFFICES OF PAUL PELLETIER

Paul E. Pelletier (admitted pro hac vice)

3500 Morningside Drive

Fairfax, VA 22031

Attorneys for Relator Sedona Partners LLC

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