Denali Group, Inc., a transportation company based in Alaska, has agreed to pay $3.5 million to settle allegations that it violated the False Claims Act by submitting fraudulent customer satisfaction surveys while posing as U.S. Department of War and Coast Guard personnel.
According to the U.S. Attorney for the Southern District of Illinois, Steven D. Weinhoeft, “Denali’s fake surveys gave them an unfair advantage over other contractors and shortchanged our military families moving through Scott Air Force Base. Companies doing business with the federal government are expected to act with honesty and integrity, and we will use all our criminal and civil tools to protect taxpayer dollars from waste, fraud, and abuse.”
Denali participated in the Defense Personal Property Program (DP3), which is responsible for moving and storage services for Department of War (formerly Department of Defense) and Coast Guard personnel. The program is administered by United States Transportation Command at Scott Air Force Base in Illinois.
The government alleges that between January 2015 and March 2019, Denali employees submitted false customer satisfaction surveys with perfect scores for their own services. Evidence indicated that Denali staff used call spoofing applications to mask their phone numbers when calling the survey line, impersonating Department of War or Coast Guard personnel by disguising their voices or using voice-changing technology.
Acting Special Agent in Charge Chad Gosch of the Defense Criminal Investigative Service stated: "This outcome demonstrates the steadfast collaboration and determination by the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS) and our investigative partners to ensure the integrity of the contracting process associated with the Defense Personal Property Program. We remain committed to safeguarding those programs that contribute to elite military readiness, as well as the wellbeing of our warfighters and their families."
Special Agent in Charge John McCabe from Army CID said: “This settlement highlights the strong collaboration between Army CID and our law enforcement partners in protecting U.S. Army Soldiers and assets. This outcome underscores our unwavering commitment to identifying those who defraud the U.S. Government.”
Special Agent William A. Rouse from Air Force OSI added: “Defrauding the Government through falsified surveys is an affront to America and Air Force families, directly undermining the very communities they inhabit. Justice has been served, and we extend our gratitude to the investigative team for their diligence.”
Jennifer Desautel, Director of Defense Contract Audit Agency remarked: "Integrity is essential to the contracting process, and collaboration among investigative agencies plays a critical role in upholding it. When contractors falsify records, it not only undermines Americans' trust in their government but also highlights the need for accountability. DCAA auditors are proud to work alongside investigative partners to provide assurance throughout the contracting process."
The investigation was conducted by several agencies including DoD Office of Inspector General, Army Criminal Investigation Division, Air Force Office of Special Investigations, Defense Contract Audit Agency, Naval Criminal Investigative Service, and Coast Guard Investigative Service.
Assistant United States Attorney Laura Barke represented the United States in this matter.
USTRANSCOM removed Denali from participation in DP3 administratively in 2022.
Members of the public can report fraud within federal defense programs via www.dodig.mil/hotline or by calling 1-800-424-9098.
The settlement resolves allegations only; there has been no determination of liability.
