Fleet owners plead guilty in PPP fraud scheme

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Trucking news and briefs for Tuesday, June 28, 2022:

Trucking company owners plead guilty to PPP loan fraud

Semsi Salja and Anes Suhonjic, the owners of 47-truck, Grand Rapids, Michigan-based general freight carrier DMR Transportation, pleaded guilty in federal court earlier this month to conspiring to commit bank fraud in connection with a $290,855 loan under the Paycheck Protection Program (PPP).

In a related civil case, DMR, Salja and Suhonjic agreed to pay a total of $1 million, including a substantial civil monetary penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

In 2020, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) to provide emergency federal assistance for the economic effects of the COVID-19 pandemic. Through the PPP, the CARES Act authorized forgivable loans to small businesses for job retention and certain other expenses.

In its second-draw PPP loan application, the Department of Justice said DMR knowingly and falsely certified that it suffered the required 25% reduction in gross receipts between the second financial quarter of 2019 and the second financial quarter of 2020. DMR also allegedly submitted falsified quarterly balance sheets and other false financial records that were signed by Salja and Suhonjic alongside the application. 

In September 2021, DMR sought forgiveness of its second-draw PPP loan by falsely certifying that its second-draw PPP loan proceeds were used to pay eligible business expenses when, in fact, DMR held that money in reserve, DOJ added.

“The PPP involved a limited pool of funds to help small businesses wracked by the disruption of a global pandemic,” United States Attorney Mark Totten said. “By fraudulently obtaining a second PPP loan, DMR took, for itself, hundreds of thousands of dollars that could have been used to help deserving companies. My office will continue to aggressively investigate and prosecute these cases.”

Salja and Suhonjic face a maximum of five years in prison.

Navistar issues recall over Sheppard steering gears

Navistar is recalling more than 33,000 vehicles affected by the steering gear recall from Bendix subsidiary R.H. Sheppard, according to National Highway Traffic Safety Administration documents.

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Navistar’s recall affects approximately 33,655 model year 2022-2023 International HX, HV, LoneStar, LT, MV, RH, IC TC Commercial Bus, and 2022 International WorkStar vehicles.  The steering gears may have been assembled incorrectly, which can cause the gear to fracture.

Dealers will inspect the steering gear serial numbers, and replace the steering gears as necessary, free of charge.  Owner notification letters are expected to be mailed Aug. 18.  Owners can contact Navistar customer service at 1-800-448-7825 with recall number 22513. NHTSA’s recall number is 22V-428.

AMBEST appoints new president, CEO

AMBEST, the member-owned, nationwide network of more than 500 independent truck stops and service centers, has appointed Chuck Ryan president and CEO, effective July 18. He replaces Steve Allen, who is stepping aside following 33 years of service as both an executive and a former member. Allen will continue to support the organization as an Advisor to the Board of Directors.

Ryan's career in the fuels industry began in Chicago as a night manager for Ashland Oil and led into a 30-plus year career serving in leadership with Shell/Motiva. Prior to his selection by AMBEST's Board of Directors, he was serving as the COO for Good Oil Company based in Winamac, Indiana.

"Chuck brings a wealth of experience in the trucking, retail and fuel industry," Allen said. "I'm certain that we have selected a leader who will advance our organization's mission to support America's truckers and AMBEST Members. Chuck and the amazing Team at AMBEST will continue to innovate and expand our network across America." 

Transportation and Logistics Systems sells off Shyp FX business

Transportation and Logistics Systems, Inc., has sold its Shyp FX subsidiary to an undisclosed buyer for $825,000.

Shyp FX was dedicated to servicing Federal Express routes in northern New Jersey.

TLSS Chairman and Chief Executive Officer Sebastian Giordano said that the operations of FX no longer fit into the company's long-term growth plans, including the close of the recently signed Freight Connections transaction which, when consummated, "would give us a much stronger presence in Northern New Jersey to expand our operations in the region."

Freight Connections is a New Jersey based business offering various transportation, warehousing, consolidating, distribution and local cartage services throughout the tri-state area.