Cargo Firm Admits Overbilling For Military Shipments

Friday, October 26th 2007, 6:48 pm

By: News On 6

BUFFALO, N.Y. (AP) _ A freight contractor for the military admitted overbilling the Defense Department by millions of dollars and agreed to pay $28 million in fines and restitution.

National Air Cargo's guilty plea to a corporate felony charge in U.S. District Court settles an investigation begun by a whistleblower's call nearly two years ago. Military and FBI investigators found that the company overbilled the government $4.4 million from 1999 to 2005 by charging air rates for ground deliveries and claiming deliveries were made sooner than they actually were.

U.S. Attorney Terrance Flynn said the investigation focused on military bases within the U.S., and there was no proof anything was done that affected national security or the war effort.

Defense attorney Paul Cambria provided a written statement indicating the company based in the Buffalo suburb of Orchard Park agreed to settle the legal issues to avoid having to suspend government shipments during court proceedings.

The legal problems ``related to events that occurred within a small segment of our business years ago,'' according to the statement.

The company pleaded guilty to a corporate felony charge of making a material false statement to the government.

A judge must approve the settlement. Sentencing was set for Dec. 11.