Michigan man locked up for $40M trucking 'investment' Ponzi scheme, other fraud

Trucking news and briefs for Wednesday, Nov. 29, 2023:

Trucking company owner gets 17 years in prison for Ponzi scheme

A Michigan trucking company owner has been sentenced to more than 17 years in prison for multiple fraud schemes, including a fraudulent trucking company investment Ponzi scheme.

Franklin Ray, 52, of Canton, Michigan, was sentenced to 212 months in prison for engaging in multiple fraud schemes, including a $40 million Ponzi scheme and two COVID-19 loan fraud schemes, and committing aggravated identity theft in connection with one of those schemes. He previously pled guilty to four counts of wire fraud and one count of aggravated identity theft.

According to a press release from Damian Williams, the United States Attorney for the Southern District of New York, beginning in at least June 2021, Ray began to offer investors an opportunity to invest in his trucking and logistics company, CSA Business Solutions LLC. Specifically, he and the investors entered into contracts in which CSA Business Solutions would procure and operate a truck in its trucking business for each $20,000 contributed by the investor.

Ray told investors that the trucks would perform delivery services for a multinational e-commerce company and/or a multinational shipping company and that the investors would be entitled to 77% of the net income of the trucks. In reality, CSA operated few trucks and had minimal revenues from trucking activities.

[Related: Florida fleet owner charged in alleged $112M Ponzi scheme]

Instead, investors in the scheme received payments from new investments into the scheme or from other sources. After the investors purchased the rights to trucks, Ray sent them falsified spreadsheets at regular intervals, purporting to show the performance of their trucks during the relevant period.

He ultimately persuaded approximately 275 investors to invest at least $40 million and fraudulently claimed to have purchased over 2,000 trucks with the investments.

Ray also carried out fraudulent schemes to obtain over $1.9 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic on behalf of CSA Business Solutions and another Michigan-based trucking company. In connection with these schemes, he submitted false information and forged documents to the Small Business Administration and commercial lenders, claiming the businesses engaged in significant trucking business, when in reality they had minimal revenues and trucking activity.

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Additionally, Ray fraudulently induced a New York City-based real estate company to pay $175,000 in startup costs for a joint venture between the company and CSA Business Solutions. In order to persuade the company to enter into the agreement, he lied about his personal business experience and the trucking business conducted by CSA. Rather than pay for startup costs, he spent the funds on personal expenses, including private airplane trips, and the joint venture was never formed.

Ray previously pled guilty to bank fraud and wire fraud in the Eastern District of Michigan and received a two-year sentence in connection with those crimes and was released from federal custody in 2010.

In addition to the prison term, Ray was sentenced to five years of supervised release and ordered to forfeit $42,128,912 and several assets, including a 1968 Chevy Camaro.

[Related: Trucking company owner pleads guilty to $40M Ponzi scheme]

Diesel Freak employee pleads guilty in emissions ‘delete’ case

After being one of 11 individuals charged in April for his involvement in a scheme to disable, or “delete,” emissions control devices on hundreds of trucks, James Sisson has pleaded guilty in federal court.

Sisson was an employee at Diesel Freak, which was also charged in the case. He pleaded guilty to conspiracy to violate the Clean Air Act. The 10 other individuals and three companies charged in the case pleaded guilty to the scheme earlier this year.

[Related: More companies, individuals charged for allegedly 'deleting' emission control systems]

In September and October, seven individuals and two companies were sentenced for the scheme. Glenn Hoezee, Robert Swainston and Randy “Jeb” Clelland were each sentenced to a year of probation, a $4,000 fine and a $100 special assessment. Ryan Bos was sentenced to a year of probation, a $6,000 fine, and a $100 special assessment.

Accurate Truck Service LLC, and Griffin Transportation, Inc., were each sentenced to a year of probation, a $500,000 fine, and a $400 special assessment. Additionally, Scott DeKock, Craig Scholten, and Douglas Larsen were each sentenced to a year of probation; a $100 special assessment; and $10,000, $6,000, and $7,500 fines, respectively.

[Related: 'Emissions delete' scheme leads to max penalty for fleet, repair shop]

Truckstop adds load alerts to app

Truckstop on Wednesday introduced Load Alert Notifications, a new feature accessible in its Truckstop Go mobile app for customers with a Load Board Pro subscription.

With Load Alert Notifications, carriers can access freight more quickly and at scale, the company said. The notification system “proactively delivers the freshest, high-paying loads that match the carriers’ preferences right to their phone when the loads are live in the marketplace.”

Said Julia Laurin, Truckstop chief product officer, “We have been incredibly pleased by the value Load Alert Notifications ... has delivered to our beta users and look forward to the impact it will have on our entire carrier and broker network,” said Julia Laurin, chief product officer, Truckstop. “Our carrier customers will get load alerts even when they’re not in the app.”

[Related: The third parties following you around the freight networks]

Bruckner’s opens three new locations

Bruckner's Truck & Equipment has opened three new facilities as part of a recent growth period. The company has moved its Monroe, Louisiana, and Fort Smith, Arkansas, locations to new facilities, and has opened a new store in Tulsa, Oklahoma. 

In Monroe, the new 36,100 sq.-ft., building sitting on 11 acres sits directly off I-20, easily accessible from exits 120 and 124. This facility replaces Bruckner’s previous location found at 900 Martin Luther King Jr Drive. 

Monroe is an Uptime Certified dealer with 50% of its diesel technicians Mack and Volvo Master Certified.

The new Fort Smith location is at 209 Rena Road in Van Buren, easily accessible from I-40 with frontage facing I-40 and Rena Road. The total building square footage is approximately 33,900. The service area accounts for almost two thirds of the space, with 18 truck service bays and a center lane for trailer repair. The parts warehouse has 8,788 sq.-ft., of floor space with an additional 3,899 sq.-ft., of upstairs mezzanine space. This facility replaces Bruckner’s previous location found at 2800 Wheeler Ave. in Fort Smith.

Finally, the company's new Tulsa location is found at 5301 W 60th St. The dealership includes 54,000 sq.-ft., and 20 service bays carrying more than $2 million in parts inventory offering morning and afternoon parts delivery, the company said.

Tulsa is a Volvo/Mack certified electric vehicle dealership in addition to a Volvo/Mack certified Uptime dealership, the company added.