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November 6, 2019 4:45 PM, EST

Utah Trucking Companies Allegedly Bribed FedEx Ground Executive

Utah Trucking Companies A FedEx Ground truck. (Rogelio V. Solis/Associated Press)

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Federal indictments unsealed last month in Utah allege that 10 individuals participated in a decadelong scheme to pay a senior FedEx Ground manager in the state $1 million in bribes to steer business to trucking companies complicit in the plan, netting the companies hundreds of millions of dollars in fraudulent and unauthorized contracts.

The charges allege that Ryan Mower, 47, of Bountiful, Utah, who oversaw FedEx Ground’s contract service providers in the state from 2008-2019, allowed participating trucking companies to obtain unauthorized runs, boost miles, receive payments for “ghost runs” they never made and falsely report accidents, all to gain income.

Mower was the senior linehaul manager at the carrier’s North Salt Lake hub. As FedEx Ground’s highest-ranking employee in Utah, his primary responsibilities included overseeing the company’s contracted service providers and ensuring that each complied with FedEx Ground’s policies and regulations, according to the indictments, unsealed on Oct. 25.

“Instead, Mower ensured that the co-conspirators’ companies received runs in at least two different ways, providing the trucking companies preferential treatment in the daily assigning of FXG unassigned runs,” the indictment said. “Unassigned runs have set origins, but the destination changes daily and the mileage for the run varies based on the needs of FXG. The FXG dispatchers are supposed to assign these runs on a rotating basis.”

The indictments include charges of wire fraud conspiracy, money laundering and federal income tax perjury. Multiple federal law enforcement agencies were involved in the investigation.

Utah Trucking Companies

Miller

“The deplorable behavior detailed in the indictments is shocking and does not reflect the professionalism and values we expect from FedEx employees or service providers,” Meredith Miller, manager of FedEx Ground External communications, told Transport Topics. “We appreciate the authorities uncovering this illegal behavior and are committed to continuing to work with them on their investigation. We are taking this opportunity to reinforce our ethics standards, compliance programs and expectations, and reporting obligations with our employees and service providers.”

Miller said the vast majority of the money paid out to the trucking companies was for work actually performed.

“Because FedEx Ground would have paid to have that work performed in any event, the net financial loss to FedEx Ground is a small fraction of this amount and is not material,” Miller said.

Here’s a synopsis of the five separate indictments:

  • USA vs. Yevgeny Tuchinsky, Alexsander Barsukov, Konstantin Tomlin, Leonid Teyf, Felix Tsipelzon, and Ryan Mower: For a period of approximately 10 years the alleged co-conspirators paid Mower bribes totaling $300,000 in return for Mower allowing Salt Lake Trucking Group and its numerous affiliates to earn $150 million in FedEx Ground revenue for their services. Tomlin, who had residences in both Russia and Utah, and owned a business in Russia, was a large investor in the group of trucking companies. During the same period, the SLTG co-conspirators paid bribes to two unindicted co-conspirators totaling $20,000. The two alleged co-conspirators were not named in the indictment.
  • USA vs. Hubert Ugarte and Ryan Mower: Ugarte, who owned approximately 20 trucking companies operating more than 40 tractors, allegedly paid bribes to Mower for more than eight years, starting before January 2012. In all, Ugarte’s trucking companies received roughly $90 million in FedEx revenue, paying Mower at least $490,000 in bribes. The indictment alleged that Ugarte’s companies fraudulently obtained assigned runs, obscured business ownership and growth, covered up failed contractual performances and falsely reported miles to gain unearned income.
  • USA vs. Davor Kovacevic, Zlate Balulovski and Ryan Mower: For more than seven years, Kovacevic and Balulovski — owners of D&Z Trucking Inc., Romkat Transportation and V&M Logistics Inc. — worked with Mower to manipulate FedEx Ground’s process governing the awarding of new truck routes to the two men’s trucking companies. As a result of the fraud, the indictment alleges the defendants’ companies received more than $21 million in FedEx Ground net revenue and paid Mower approximately $165,000 in bribes.
  • USA vs. William Murdock and Ryan Mower: Murdock owned Utah-based WM Transportation Inc., Troon Transportation Inc., Clear Line Transportation Inc. and MSD Transportation Inc.; companies that all received preferential treatment from Mower by adding the number of runs assigned to Murdock’s companies beginning in 2014. Mower also falsified mileage reports to FedEx Ground for Murdock’s companies, which received about $19 million in FedEx Ground revenue over five years, the indictment said. Murdock allegedly paid Mower bribes totaling $50,000.
  • USA vs. Ryan Mower: In addition to the other indictments, Mower was charged with lying about his income in 2014-2017 tax returns, underestimating his actual income.

For example, he filed his 2015 return stating he made $112,113 in income, knowing he received $223,088 that year. For tax year 2016 he reported an income of $111,835, when he allegedly actually made $348,877.

In addition to the criminal charges, the federal government obtained seizure warrants to deprive the defendants of the profits of their alleged criminal conduct by seizing 25 pieces of real property, 60 bank accounts, investments, cars, boats, snowmobiles, motorcycles, ATVs, trailers, jewelry and firearms. Items seized during a case are held while the case is litigated, government prosecutors said.

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