DOT IG flags ongoing investigations into double brokering | HOS waivers in four states

Updated Sep 6, 2023

Trucking news and briefs for Wednesday, Aug. 30, 2023:

DOT OIG stops short of endorsing Congress’ call for double brokering/fraud task force

Earlier this year, spurred largely by a variety of motor carrier and broker/shipper groups and member companies' concerns around double brokering, eight Congresspeople expressed concerns with various forms of freight fraud, including double brokering.

Their letter asked the Department of Transportation’s Office of Inspector General to consider establishing a permanent task force for investigating, referring and prosecuting cases of freight, household goods moving, ransom, and double-brokering fraud in coordination with the Federal Motor Carrier Safety Administration and the Department of Justice.

OIG responded to the letter on Aug. 22, pledging to continue ongoing work with FMCSA and DOJ around fraud instances but stopping short of endorsing the notion of a permanent task force around the issue. OIG noted that in the last five years it's investigated 25 cases of household goods moving fraud and 13 double-brokering cases. OIG vowed to move on strong cases that come to them. 

[Related: Inside the fight against cyber crime in brokered-freight networks]

“Recognizing the importance of preventing and detecting fraud, waste, and abuse in our transportation system, we will continue to partner with FMCSA and DOJ to investigate the most egregious allegations of household goods moving and double-brokering fraud, in addition to our primary focus on cases that align with OIG’s top investigative priorities,” OIG said in its letter to the Congressmembers. OIG's priorities it spelled in the letter were "crimes that affect public safety and fraud schemes that significantly impact the large volumes of funding distributed" by the Department of Transportation.     

Of the 25 HHG moving fraud cases, OIG noted eight cases are closed and resulted in eight convictions with individuals being sentenced to 8-plus years of incarceration; 6-plus years of probation; 13 years of supervised release; and $28.5 million in fines, forfeiture, recoveries, restitution, and special assessments. The remaining 17 cases are still open and have already resulted in 14 convictions; 26-plus years of incarceration; 11 years of probation; 22 years of supervised release; and $5.2 million in fines, forfeiture, recoveries, restitution, and special assessments.

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Of the 13 double brokering cases OIG has investigated, seven have been closed. Three were declined by prosecutors, three were closed without a referral to prosecutors for lack of evidence, and just one case led to a criminal conviction. Of the six cases that remain open, one case has resulted in a criminal conviction.

[Related: Senators, Reps push to establish 'cop on the block' to shut down double brokering, other freight fraud]

HOS regs waived in Florida, Georgia, Carolinas as Hurricane Idalia makes landfall

Governors in four states have issued emergency declarations as Hurricane Idalia made landfall Wednesday morning along Florida’s Gulf Coast, suspending hours of service regulations for truck drivers providing emergency relief.

The declarations were issued in Florida, Georgia, South Carolina and North Carolina, which are along the expected path as the storm moves inland.

Florida’s declaration is only applicable in certain counties: Alachua, Baker, Bay, Bradford, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duvall, Flagler, Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Hardee, Hernando, Hillsborough, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Nassau, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. Johns, Sumter, Suwannee, Taylor, Union, Volusia and Wakulla.

In Florida, the emergency declaration suspends enforcement of the registration requirements for commercial motor vehicles that enter Florida to provide emergency services or supplies; to transport emergency equipment, supplies or personnel; or to transport FEMA mobile homes or office- style mobile homes into or from Florida.

It also waives the size and weight restrictions for divisible loads on any vehicles transporting emergency equipment, services, supplies, and agricultural commodities and citrus as recommended by the Commissioner of Agriculture. That allows the establishment of alternate size and weight restrictions for all such vehicles for the duration of the emergency.

Additionally, the Department of Highway Safety and Motor Vehicles (DHSMV) waived hours of service requirements for trucks hauling emergency relief supplies and suspends the enforcement of the licensing and registration requirements under the International Fuel Tax Agreement.

Florida’s declaration is effective through Sept. 25.

[Related: Ports and roads shut down as Cat 3 Hurricane Idalia slams North Florida]

Georgia’s emergency declaration, set to expire Sept. 8, suspends federal hours of service regulations “to ensure the uninterrupted supply of goods and services necessary to respond to this State of Emergency for Hurricane Idalia, including petroleum products.”

The South Carolina declaration, effective through Sept. 13, authorized and directed the South Carolina Department of Transportation and Department of Public Safety to “waive or suspend application and enforcement of the requisite state and federal rules and regulations pertaining to registration, permitting, length, width, weight, load, and hours of service for commercial vehicles and operators of commercial vehicles” responding or providing direct assistance to areas impacted by the storm. 

Finally, North Carolina’s order waives hours of service regulations for drivers transporting essential fuels, food, water, non-alcoholic beverages, medical supplies, feed for livestock and poultry, livestock, poultry, and crops ready to be harvested and vehicles used in the restoration of utility and transportation services. North Carolina’s waiver is effective through Sept. 27.

HHG mover sentenced in fraud case

A Florida-based household goods mover who previously pled guilty in relation to a moving fraud scheme was sentenced on Aug. 15 to eight years in prison.

Avraham Zano was also sentenced to three years of supervised release, a forfeiture of $334,499, and a $300 special assessment. Zano was also ordered to pay $2,877,497 in restitution jointly and severally with co-defendant Sofien Mlayah.

In May 2023, Zano pleaded guilty to wire fraud, interstate transportation of stolen property, and failure to give up possession of household goods.

The scheme involved inflating the costs of victims’ moves, taking possession of their goods, and abandoning the property throughout the country at undisclosed self-storage facilities, often resulting in total loss of the victims’ property.

[Related: FMCSA cracking down on household goods moving fraud]