A federal judge in Los Angeles earlier this month ordered the owner of a notorious now-defunct fraudulent California firm that established trust funds for property brokers to pay $96,000 in restitution.
Bonnie Warren, owner of the former Oasis Capital, Inc. of Fullerton, Calif., pleaded guilty in May of 2015 to wire fraud and was sentenced in December to four months' home confinement and two years’ probation.
Warren, who faced up to 20 years in prison and a $250,000 fine, got off with a light sentence for her crimes, said Nancy O’Liddy, director of policy for the Transportation Intermediaries Association, a broker trade organization that fought hard to expose Oasis.
“She took a lot more [money] than that,” O’Liddy told Transport Topics.
Oasis, known as a BMC-85 broker, accepted money from property brokers for the establishment of trust funds but actually used the money for other purposes, according to court records. Trust fund monies are supposed to be maintained for the purpose of providing payments to shippers or motor carriers in cases where the broker fails to carry out its contract to provide transportation services by authorized motor carriers.
Under federal law, brokers must post either a bond or a trust fund, and file it with the Federal Motor Carrier Safety Administration within 30 days of starting service.
FMCSA in January 2010 suspended Oasis’ privileges to file trust funds on behalf of brokers and began the process of revoking the approximately 500 Oasis trust funds on file with the agency.
O’Liddy said she believes the case against Oasis in part provided an impetus for the 2012 MAP-21 law that raised the broker bonding requirement to $75,000 from $10,000 to help mitigate fraudulent activity within the broker industry.
The new law required that the funds brokers put up for a trust must be collateralized.
“But I know there are companies out there that are still taking fees for the trust, instead of a deposit,” O’Liddy said. “Which is not the way the law is written.”
By the time the law caught up with Warren, her company had become one of the worst-kept secrets in the freight brokerage industry.
But by then, it was too late for the more than hundreds of brokers who already had shelled out up to $10,550 each for a bond surety agreement that wasn’t worth the paper it was written on, investigators said.
Had Warren chosen to go to trial, the government was planning to offer testimony from witnesses, including broker victims, federal law enforcement agents, an Oasis accountant and bookkeeper and an Oasis salesman who said he followed a script that Warren provided, according to court records.