Prairie State Wire

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 provides 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. Shipment awards under DP3 depended heavily on customer satisfaction survey scores submitted by service members or their families after each move.

The settlement resolves claims that between January 2015 and March 2019, Denali employees used call spoofing applications to impersonate DoW or Coast Guard personnel when completing customer satisfaction surveys. They allegedly disguised their voices using accents or voice-changing technology to submit perfect scores for Denali's services, even when actual customers were dissatisfied.

"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," said Acting Special Agent in Charge Chad Gosch of DCIS Southwest Field Office. "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 Criminal Investigation Division added: “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 Office of Special Investigations commented: “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 stated: "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 involved multiple 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.

USTRANSCOM removed Denali from participation in DP3 administratively in 2022.

Assistant United States Attorney Laura Barke represented the United States during this matter.

To report fraud within DoW programs visit www.dodig.mil/hotline or call 1-800-424-9098.

It was noted that these claims are allegations only; there has been no determination of liability.