U.S. News

U.S. sues YRC Worldwide freight units, alleges overcharging

WASHINGTON (Reuters) - U.S. officials have filed a lawsuit against several units of freight company YRC Worldwide Inc alleging that they systematically overcharged the federal government for services and lied to hide their misconduct, the U.S. Department of Justice said on Friday.

Shares of the Kansas-based company were down 2.7 percent in late morning trading. Representatives for the company could not be immediately reached for comment on the lawsuit.

The Justice Department said it had filed a lawsuit in the U.S. District Court in Buffalo, New York, alleging that the subsidiaries for seven years “defrauded the Department of Defense by millions of dollars for shipments that were actually lighter, and thus cheaper, than the weights for which the defendants charged the government.”

The YRC units named in the lawsuit are YRC Freight Inc, Roadway Express Inc and Yellow Transportation Inc.

The Justice Department said the case was prompted by a whistleblower. “The defendants knowingly made or used false statements concealing their overcharging practices to the Department of Defense,” it added in a statement.

Reporting by Susan Heavey; Editing by Chizu Nomiyama and Bill Rigby