Investigations

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Former Supervisor Pleads Guilty to Household Goods Moving Scheme

On October 9, 2009, Pablo Morales, previously a foreman with Adam Moving and Storage (AMS), Brooklyn, New York, a household goods (HHG) moving company, pled guilty in U.S. District Court, New York, New York, to a scheme of fraudulently inflating the cost of moving customers’ HHG.

Mr. Morales participated in a scheme to provide AMS customers with low–ball estimates, only to have the cost of the move increased, in some cases doubled or tripled, after the customers’ HHG were loaded on the moving truck. AMS would not release the customers’ HHG until they agreed to pay the artificially inflated rate. As part of his plea, Mr. Morales admitted to conducting this scheme on a move that was paid for by the Department of Defense.

Investigation of AMS was initiated based on information received from the Federal Motor Carrier Safety Administration (FMCSA) alleging that AMS violated FMCSA regulations for failing or refusing to furnish an estimate in writing. As of May 2001, FMSCA received approximately 75 complaints alleging that AMS had been holding customers’ HHG hostage until the customer paid an artificially inflated amount. During a compliance review, FMCSA found that AMS had an established pattern of providing binding estimates to their customers that would be fraudulently inflated upon delivery. Federal regulations prescribe that the maximum a carrier can demand at time of delivery is no more than 10% over the non–binding estimate amount.