Previously in Matthew Patrick's two-part examination of double brokering schemes he's seen: The double brokering slow burn -- how it happens, and how to fight back against it
The commonality throughout the various pieces of the double brokering pie covered in Part 1 of this look at the issue is a lack of any real punishment for the players involved in perpetrating it or enabling it. Double brokering, if connection between carrier and broker entities engaged in these schemes can be proven, likely violates the misrepresentation prohibition in the broker regulations (49 CFR 371.7). That could be punishable in some ways, from court actions and levying of civil penalties to possible revocation of authority. Yet there is next-to-zero enforcement of that regulation.
As also noted in part 1, most bad actors (connected carrier and broker MC#s) we’ve seen are operating with virtual office addresses and, we feel, residing abroad. There is very little recourse to collect any civil penalty should it be assessed, even if the evidence is quite clear.
Who should a broker or carrier contact to share evidence of double brokering within trucking’s regulatory bodies? Common advice says the first call should be to local law enforcement. Yet does that mean local to where the load has picked up, where the actual carrier is headquartered, or where the actual broker is headquartered? These are unanswered questions, and no local law enforcement will do anything about double brokering.
Representatives within the Department of Transportation and the FMCSA have suggested reporting to the DOT Office of Inspector General. After several discussions with that very department, though, it feels fairly clear to me that nothing will be done there unless you can present them with massive fraud, multiple victims and damages -- say, $200,000 worth of nonpayment claims run up by a double broker who’s reached the “take the money and run” phase.
The OIG seems reluctant to pursue a scenario where you were double brokered a load and were paid, albeit at reduced rates. This makes sense, as the OIG has to sell these cases to state attorneys general and/or U.S. attorneys. Consider the hypothetical in part 1 of this story, where the presence of a double broker reduced the rate to the carrier by $150. That level of damages isn’t going to move the needle with a federal prosecutor. It’s yet another poor option, ultimately.
