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February 25, 2021 9:30 AM, EST

Fraudulent Movers Are a Major Threat to the Industry

Mover resting on box Ivan-balvan/Getty Images

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The hardworking men and women in the household goods moving profession call their fraudulent counterparts “rogue operators.”

The rogue moving operators set up fake websites to lure customers and offer them cheap moving rates. Then before the moving van gets to its destination the scammers threaten to hold customers’ household goods hostage, unless the customer agrees to pay an additional charge, sometimes as much as several thousand dollars.

“Rogue operators are the largest threat to the legitimate household goods industry and one of our top issues that we are working on with the Federal Motor Carrier Safety Administration and Capitol Hill,” said Katie McMichael, director of American Trucking Associations’ 1,400-member Moving and Storage Conference. “Through deceptive practices, these illegal entities force consumers into positions and extort large sums of money to be reunited with their belongings. The moving community strongly condemns these bad actors and we are working to address this growing problem.”

Although such scams are not unusual, the scope of an illegal operation led by two Florida residents was among the largest in recent memory. In all, the moving company bandits ripped off 1,800 customers of an estimated $3.5 million from 2013-2018, according to a statement by the U.S. Department of Transportation’s Office of the Inspector General. Federal authorities also said the rogue operators charged customers for moving more cubic feet of household goods than they actually loaded, and did not deliver some household goods.

Late last month, the IG said two of the ringleaders of the scam, Andrey Shuklin and Seth Nezat, pleaded guilty to conspiring in a “racketeering enterprise” to defraud individuals throughout the United States. More than a dozen other participants in the moving scams being investigated by the IG and FBI already have been charged or pleaded guilty to the scams.

The fraudsters operated at least 10 fraudulent moving companies over five years, according to a federal indictment issued by a federal grand jury in the Southern District of Ohio.

Many of those charged in the fraud used an array of assumed names, and even threatened to “injure another person who interfered with the moving enterprise’s purposes.”

At least two of the men who pleaded guilty were said to have “coordinated and directed lower-level employees, members and association of the affiliated companies.”

Under federal regulations, when a customer and motor carrier both agree in writing to charge for goods movement services prior to the start of any work, the estimate is called “binding.” Federal regulations prohibit the interstate carrier from raising the agreed upon price of the move unless the two parties willingly renegotiate.

Katie McMichael

McMichael

“The reason this has come to the forefront in recent years is because consumers use the internet for anything now,” McMichael told Transport Topics.

McMichael said that the companies charged in the crime did a lot of business in New York, New Jersey and Florida. But typically when any of the sham companies became suspect, they would shut down their website and set up another website.

She added: “This cycle continues. You can see how long they will do this, and get away with it, because it’s hard to catch them. There needs to be a lot of cooperation between federal, state and local authorities.”

The problem grows worse when some of the defrauded customers call a legitimate mover whose name might have been used in a fraud, accusing the legitimate mover who may be unaware of the fraudulent transaction. In some cases, consumers just pay the extra charge and the scam never gets reported to law enforcement or regulatory authorities.

“To the legitimate moving industry the impact is when people have a bad move they sometimes will talk to news outlets,” McMichael said. “It just puts a stain on the moving industry overall, because people don’t know how to separate a rogue operator from a legitimate operator.”

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