Utah trucking co. Owner admits $ 24 MILLION FedEx bribe scheme, P3 fraud
A Utah man admitted to participating in a pay-to-play trucking program in addition to the P3 fraud, federal officials said Tuesday.
Hubert Ivan Ugarte, 52, pleaded guilty to fraud charges in two separate incidents, according to a press release issued Tuesday by the Utah district attorney’s office.
Ugarte owns several trucking companies.
Prosecutors say Ugarte admitted to paying around $ 490,000 in bribes to Ryan Lee Mower, senior director of online transportation at Utah FedEx Ground (FXG), in exchange for multiple FXG delivery routes to which Ugarte would not have been entitled under the established policies of FXG. The scheme reportedly earned Ugarte trucking companies $ 24 million over a seven-year period between 2012 and 2019.
Ugarte was reportedly one of ten defendants who paid Mower a total of $ 1 million as part of the bribe scheme.
The US Attorney’s Office details the diagram:
“In order to carry out the program, Ugarte and the Director of FXG worked to obscure the ownership of Ugarte’s many trucking companies by filing false compliance reports with FXG in order to give Ugarte more trucking routes. that a business owner had the right to sub-establish FXG. Strategies. As a result, Ugarte was cleared to operate at least 45 trucking routes from the Salt Lake FXG hub, significantly exceeding the FXG limit of just 15 trucks for the Salt Lake City hub. This practice, known as “oversizing” in the contract transportation industry, coupled with the payment of bribes to the director of FXG, would have resulted in the automatic termination of Ugarte’s contracts if discovered by the contractors. FXG authorities. Throughout the program, Ugarte’s businesses received around $ 135 million in gross payments from FXG, resulting in net profits for its trucking businesses of around $ 24 million.“
In another case, Ugarte also admitted to submitting a fraudulent loan application to the Small Business Administration (SBA) to obtain $ 210,000 in Paycheck Protection Program (PPP) loans. Ugarte says he did not disclose he was facing a federal indictment for his role in FedEx’s bribery system when he applied for the PPP loans. Further, “Instead of using at least 75% of the loan to pay for labor costs, including unpaid paychecks, Ugarte used 60% of the loan to pay off the truck payments – leaving 40% for salary costs, ”the US attorney’s office said.
Sentencing in both cases is scheduled for June 3, 2021.