Utah Trucking Company Owner Pleads Guilty to $ 24 Million FedEx Bribery Program
A Utah man pleaded guilty to his role in two separate fraud schemes involving the purchase of $ 24 million FedEx Ground (FXG) contracted shipping routes profit and obtaining a paycheck protection program loan for other trucking companies.
According to the Utah Attorney’s Office, Hubert Ivan Ugarte, 52, of Draper, Utah, was convicted of fraud and money laundering for his involvement in the paid trucking program where he was. one of 10 defendants who paid $ 1 million in bribes. Payments to the director of the Utah FXG Ground Hub were to make their trucking businesses as lucrative as possible.
In the plea deal, Ugarte admitted to bribing FXG director Ryan Lee Mower with around $ 490,000, which brought Ugarte’s trucking companies more than $ 24 million between 2012 and 2019.
In return, the Director of FXG gave the Ugarte companies several delivery routes from FXG to which Ugarte would not have qualified under established FXG policies.
They allegedly worked to hide ownership of Ugarte’s many trucking companies by filing false compliance reports with FXG to assign Ugarte more trucking routes than a business owner was entitled to, says the plea agreement.
For this reason, Ugarte was allowed to operate at least 45 trucking routes from the FXG hub in Salt Lake City, exceeding the limit of 15.
This practice, known as “oversizing”, would have resulted in the automatic termination of Ugarte’s contracts had it been discovered by FXG authorities.
Throughout the program, Ugarte’s businesses received approximately $ 135,000,000 in gross payments from FXG, resulting in net profits for its trucking businesses of around $ 24,000,000, according to the U.S. Attorney’s Office. from Utah.
In the second case, Ugarte pleads guilty to submitting a fraudulent loan asks the Small Business Administration through the Coronavirus Aid, Relief, and Economic Security Act. He admitted to obtaining $ 210,000 in P3 loans after he allegedly failed to reveal that he was facing federal charges for his role in the trucking corruption program.
The CARES law, enacted in March 2020, provided financial relief of up to $ 249 billion in forgivable loans for small businesses as the coronavirus pandemic wreaked havoc on the economy. In April 2020, Congress authorized more than $ 300 billion in additional P3 funding.
The proceeds of the PPP loan are to be used by businesses on salary costs, mortgage interest, rent, and utilities. The PPP allows the interest and principal of the PPP loan to be fully written off if the business spends the loan proceeds on those expenses within a specified time after receiving the proceeds and uses a certain amount of the PPP loan proceeds on salary expenses, a new state of liberation.
On May 14, 2020, Ugarte received $ 210,000 from the Transportation Alliance Bank as part of the PPP. Ugarte used 60% of the loan to pay off overdue truck payments, leaving 40% for salary costs, says the Utah Attorney’s Office.
Ugarte’s sentence for both cases is set for June 3.