A trucking company that benefited from an illegal bribery scheme which resulted in millions of dollars worth of government contracts says they had no knowledge of the crimes, and instead placed blame on an owner-operator truck driver and an independent sales agent.
The company, Kentucky-based Mercer Transportation, is currently fighting the federal government’s allegation that they were involved in the scheme, which involved bribing Department of Defense employees in exchange for the lucrative shipping contracts.
According to court documents, between 2007 and 2012 truck driver David Nelson and sales agent Ivan Brannan paid more than $200,000 in bribes to federal employees Mitchell Potts and Jeffrey Philpot, who worked at Defense Logistics Agency in Georgia.
In return, Nelson and Brannon, who were independent contractors working for Mercer, brought in $21 million in shipping contracts from the military base in Georgia in the 6-year period.
An investigation revealed that Nelson and Brannon received 75% of the gross revenue from the contracts, with Mercer received the remaining 25%
In 2014, a former Mercer employee alerted the federal government of the illegal activities under the False Claims Act, which allows a whistle-blower to receive a portion of the penalties paid by an organization found guilty of defrauding the federal government.
After a lengthy investigation, all four men were indicted and pleaded guilty to the charges between 2014 and 2016.
During his guilty plea, Brennan admitted to paying for vacations and handing over cash payments to the government employees in exchange for the shipping contracts.
The truck driver, owner-operator David Nelson, also admitted to handing over cash payments to the government employees as he was picking up shipments.
Two additional Mercer drivers, whose names were not revealed, were also believed to be involved, but did not face charges.
Now that the case against the individuals has been wrapped up, the government is placing its attention on Mercer itself and alleges that the company was in on the scheme. Federal agents say the improperly obtained contracts caused the government to overpay by millions, instead of allowing them to bid for the lowest price.
Mercer has denied the allegations and claims they had no knowledge of the illegal activities used to procure the contracts.
Although Mercer says they had no knowledge of the bribes, accounting records show that Mercer paid for a hunting trip in 2007 for the two government employees and another Mercer representative.
Local news station WDRB also reported that “when other Mercer drivers started complaining about Nelson and the two unnamed drivers getting all the work from the Georgia base, Mercer management in 2008 created the ‘Dedicated Driver Program’ and designated the three truckers as the ones who got first dibs on any ‘sensitive freight’ shipments from the base.”
“Mercer is and has always been committed to acting in an honest and ethical manner, and it has done so here,” Mercer’s attorney, Gregg Hovious, said in a statement. “(Mercer) has cooperated with the government investigation every step of the way, and it is working actively to resolve all issues with the government,” he added.
All four men who pleaded guilty are currently serving prison time.