Moving company, official charged with fraud
Stars and Stripes October 25, 2003
A Belgian businessman was recently arrested for allegedly rigging bids and fixing prices in connection with a contract to store and move household goods for the U.S. military.
Defense Criminal Investigative Service agents arrested Marc Smet in Honolulu last week on charges he tried to defraud the U.S. government. Smet is the managing director of Gosselin World Wide Moving, headquartered in Antwerp, Belgium.
If convicted, he faces fines of up to $600,000 and eight years in prison.
The Justice Department announced that the firm also has been charged. The charges are the first filed in an ongoing federal antitrust investigation into fraud, bribery and tax crimes committed by companies with moving and storage contracts with the military.
Though the firm is from Belgium, the alleged offenses were related to the company’s contract to move the goods of troops and civilian workers from Germany back to the United States.
“These charges demonstrate the division’s resolve to use the full powers of our antitrust laws to prosecute those involved in anticompetitive behavior that harms American businesses, consumers, and taxpayers,” R. Hewitt Pate, assistant attorney general in charge of the antitrust division said in a prepared statement.
Smet and the Gosselin company are accused of conspiring with others to increase the cost of moving so in order to charge the military through bid manipulation during six months of 2002.
A Justice Department news release said the Defense Department has spent more than $100 million each year to move the household goods from Germany to the United States.
Eliminating competition violates the Sherman Antitrust Act and conviction carries a maximum penalty of a $10 million fine for a corporation and a $350,000 fine and three years imprisonment for an person. The maximum penalty for defrauding the government is a $500,000 fine for a corporation and five years imprisonment and a fine of $250,000 for a person.
The fines can be increased under certain circumstances.
European sources said they were either unfamiliar with or unable to discuss the operation.
“I wasn’t aware of it,” said Marie-Lise Baneton, a spokeswoman for the Army’s 80th Area Support Group in Mons, Belgium. “That contract was not even awarded here locally. It’s administered out of Germany.”
Officials with the Military Traffic Management Command in Rotterdam, Netherlands, are aware of the case but declined comment on the advice of military lawyers.
“They’re not allowed to talk to the media,” said Bram De Jong, spokesman for the organization.
The continuing investigation is under the direction of the Justice Department Antitrust Division’s National Criminal Enforcement Section in Washington, D.C., with help from the Defense Criminal Investigative Service and the Army Criminal Investigative Command.