The U. S. Attorney's Office said Wednesday that Mercer Transportation Company, Inc. has agreed to pay $4.4 million to the federal government, to settle a false claims lawsuit relating to a freight bribery conspiracy that operated for years out of the Marine Base at Albany.
James L. Reeves, who worked for Mercer Transport for many years, turned whistleblower, and told federal investigators what was going on with a freight scam, that was costing the government millions, fraudulently, as determined by the Albany Federal Court.
The federal prosecutor said that CEO of the company is James L. Stone, and another owner is Herbert Ligon. The company was run by the General Managers Group.
"In simple terms, fraud committed by defense contractors is theft directly from the American people," said U.S. attorney 'Pete' Peterman. "When dealing with the U.S. Government – especially when dealing with the armed forces whose lives may depend on the work of these contractors – contractors are expected to act in good faith and to comply with their obligations. This U.S. Attorney’s Office will hold accountable contractors that seek to profit unfairly at the expense of American troops and taxpayers."
Christopher Whitman, 49, at the time, was sentenced to 22 years in prison in an Albany federal courtroom in 2015, after his conviction on 57 counts of bribery and defrauding the government.
Shawn McCarty, a base transportation official, was found guilty on 17 counts and not guilty on 12.
According to court documents, as part of the bribery scheme, Mercer agents and employees Ivan Brannan, David Nelson, and others, bribed DOD employees, Mitchell Potts and Jeffrey Philpot, at the Marine Base, to award sensitive freight shipments to Mercer, at inflated rates.
Potts and Philpot pled guilty to receiving bribes, and were sentenced to ten years’ and seven years’ in prison, respectively.
Mercer agent Ivan Brannan pled guilty to bribing Potts and Philpot to get the trucking jobs, and got four years in prison.
David Nelson, a driver, pled guilty to bribing Potts and Philpot, and got two years in prison.
The government proved in federal court that the scheme went on for about six years, and the government paid over $20 million in freight charges during that time.
The Justice Department's investigation found that in one case in 2009, Mercer charged $8,500 for a trip to the west coast, on which a semi truck transported 20 pounds of property from Albany, and nothing else.
Reeves will get $814,000 for his role in alerting the government to what was going on, and how the government was being ripped off.
The government said that Mercer cooperated fully in the investigation, and the claims resolved by the settlement are allegations only.
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