Source: http://www.worldwideerc.org/gov-relations/us-tax-legal-resources/Pages/US-Department-of-Justice-Crackdownon-Rogue-Movers.aspx
Timestamp: 2017-08-18 22:07:42
Document Index: 732443782

Matched Legal Cases: ['§ 371', '§ 1343', '§ 1951', '§ 1956', '§ 1956', '§ 3553']

U.S. Department of Justice Crackdown on Rogue Movers
The household goods moving industry has for some time tried to deal with “rogue” movers, i.e., movers who fraudulently scam consumers through a variety of means, usually involving lowball estimates, refusal to deliver, and similar fraudulent practices. In 2007, the Department of Justice impaneled a grand jury which indicted 14 movers in California and Florida on charges of committing extortion and fraud on consumers.
The indictment alleges a scheme to defraud and extort customers in residential moves by offering potential customers extremely low moving estimates, taking possession of customers’ property, subsequently increasing the price of the transport of the customers’ goods, and thereafter withholding delivery of the goods until the customers paid the fraudulently inflated price. The indictment was returned on December 13, 2007 and was recently unsealed. These charges are the result of a three-year investigation by the Federal Bureau of Investigation, the U.S. Department of Transportation, Office of Inspector General, and the Internal Revenue Service, Criminal Investigation Division.
According to the indictment, six of the defendants (Ezyoni, Nass, Gefen, Kaupp, Braunshtain, and Rangel) worked for AY Transport, Inc. also known by the names Progressive Van Lines and Midwest Relocation Services. AY Transport was a moving company with offices in San Jose.
Eight of the defendants (Goldberg, Aycock, Lamondin, Sandomir, Sheinfeld, Hauessler, Sariol, and Subirats) worked for National Moving Network, a national moving broker in Miami, Florida.
Defendant Ezyoni was the owner and chief executive officer (CEO) of AY Transport (“AY”). As owner and CEO, defendant Ezyoni ran the day-to-day operations of AY. Defendant Nass was the operations manager of AY. As operations manager, defendant Nass assisted in running the day-to-day operations of AY. Defendant Gefen was the office manager of AY. As office manager, defendant Gefen handled customer complaints and assisted in the day-to-day operations of AY.
Defendants Kaupp, Daniel Rangel, and Braunshtain were drivers for AY. As drivers, defendants Kaupp, Rangel, and Braunshtain participated in the loading and delivery of customers’ goods and interacted directly with customers.
Defendant Goldberg was the owner and president of the National Moving Network (“NMN”). As owner and president, defendant Goldberg ran the day-to-day operations of NMN. Defendant Aycock was the sales manager for NMN. As sales manager, defendant Aycock supervised sales representatives in their assigned tasks of soliciting customers, taking customer inventories, providing customers with weight and price estimates, collecting customer deposits, and scheduling dates for the loading of customer goods.
Defendants Lamondin, Sandomir, Sheinfeld, Hauessler, Sariol, and Subirats were sales representatives for NMN. As sales representatives, they solicited customers, took customer inventories, provided customers with weight and price estimates, collected customer deposits, and scheduled dates for the loading of customer goods.
According to the indictment, the defendants unjustly enriched themselves by luring customers into doing business with NMN by offering them extremely low moving estimates, taking possession of customers’ property and then subsequently increasing the price of AY’s transport of the customers’ goods, and thereafter withholding delivery of their goods until the customers paid the fraudulently inflated price to AY.
The maximum statutory penalty for the conspiracy to commit wire fraud and extortion, in violation of 18 U.S.C. § 371, is five years and a fine of $250,000. The maximum statutory penalty for the counts of wire fraud in violation of 18 U.S.C. § 1343 is 20 years imprisonment and a fine of $250,000, plus restitution if appropriate. The maximum statutory penalty for the counts of extortion in violation of 18 U.S.C. § 1951 is 20 years imprisonment and a fine of $250,000. The maximum statutory penalty for the counts of money laundering in violation of 18 U.S.C. § 1956(h) (conspiracy) and 18 U.S.C. § 1956(a)(1)(A)(i) (money laundering–promotion) is 20 years and a fine of $500,000, or twice the value of the property involved in the transaction, or whichever is greater. However, any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
It is important to remember that the indictment is merely a recitation of charges the government hopes to prove, and that the defendants are all innocent until proven guilty. This indictment appears to herald the DOJ’s heightened interest in rogue movers. Although there has been little exposure to these fraudulent practices in managed moves, new hires and other transferring employees who are not offered a full managed move have been targeted by them. Even though law enforcement is cracking down, it is still good policy to educate employees about the practice.
As of September, 2009, one of the defendants, Carol Hauessler, pled guilty and was sentenced. It is unclear as to the outcome of the cases against the other defendants with reports being that some were deported and others fled the country rather than facing charges.
These indictments and the considerable adverse publicity, as well as proactive public education undertaken by legitimate moving companies and their trade association, the American Moving and Storage Association, appear to have driven the unscrupulous rogue movers underground. However, it is good advice to counsel any consumer on the dangers of these criminals.
After these convictions, the issue seems to have diminished, although this could be caused by the slow housing market.
The U.S. Department of Transportation has also begun a campaign to educate consumers regarding rogue movers, which includes a website at https://www.protectyourmove.gov/consumer/awareness/protect/red-flags.htm.
Although this case is now of only historical interest, it and others like it sparked a continuing campaign by the federal and state governments, as well as the moving industry’s trade association the American Moving and Storage Association (AMSA), to take action and devise programs to combat the practice.
Prosecutions continue, led mostly by state attorney generals.
AMSA’s ProMover Program has had some success in educating consumers on how to differentiate professional movers from rogue movers. See http://www.promover.org/content.asp?pl=1&sl=283&contentid=283.