RALEIGH, N.C. – Yesterday, a jury in the Eastern District of North Carolina found defendants Chad Cline and BJ Trucking Company, Inc. responsible for the unauthorized purchase of $1,679,086 worth of fuel under United States Postal Service contracts, in violation of the False Claims Act. The jury also found that BJ Trucking, although insolvent and owed a substantial debt to the United States, transferred $439,015 to company insiders—including defendant Doug Cline—in violation of the Federal Debt Collection Procedures Act. This jury verdict will recover more than $5 million to the government, along with civil penalties to be determined by the judge.
“This civil fraud trial demonstrates our firm commitment to protecting taxpayer dollars and preserving the integrity of federal programs,” said US Attorney Michael Easley. “Our office will diligently pursue those who abuse or misuse government funds.”
“We are pleased to contribute to this investigation and applaud the outstanding work of the United States Attorney’s Office to protect the assets of the US Postal Service and the integrity of our fuel card program,” said Executive Special Agent Kenneth Cleevely of the US Postal Service. Service, Office of the Inspector General.
BJ Trucking was a trucking company based in Greensboro, NC that transported mail for the Postal Service. Doug Cline owned the company and his son, Chad Cline, managed the day-to-day operations. The Post Office issued fuel cards that BJ Trucking could use to purchase fuel on authorized Postal Service routes, up to a certain amount. The Post Office would in turn pay for fuel purchased with fuel cards. Although the company’s contracts with the Postal Service specifically prohibited excessive purchases on the fuel card and specifically warned that unauthorized use of the fuel card could result in False Claims Act liability, BJ Trucking routinely used its cards between 2014 and 2015 to purchase hundreds of thousands of gallons of fuel above legal limits, spending millions of government dollars to which the company was not entitled. The government recovered much of that money by withholding payments to BJ Trucking and pursued the remainder through this litigation.
Additionally, while the company was insolvent, struggling to make its payroll and pay other bills, and indebted to the United States, it funneled hundreds of thousands of dollars to its corporate insiders, including Doug Cline, his sister, and another company he ran. The United States has continued these fraudulent transfers in this litigation.
The jury found that BJ Trucking and Chad Cline filed or caused to be filed 29 fraudulent claims, costing the United States $1,679,086 in damages. The jury also found that BJ Trucking illegally transferred $439,015 to company insiders. The False Claims Act allows the United States to recover three times the fraudulently obtained money, plus civil penalties for each false claim filed. Among other things, the Federal Debt Collection Procedures Act allows the United States to reverse and recover preferential transfers made to insiders.
The ruling in this matter was the culmination of a coordinated effort between the United States Attorney General’s Office and the United States Postal Service’s Office of Inspector General. Assistant US Attorneys Neal Fowler and Michael Anderson represented the United States in the case. This matter was investigated by the United States Postal Service, Office of Inspector General.
Related court documents and information from the civil case can be found on PACER by searching for Case No. 5:19-CV-94-D.
