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 administered by United States Transportation Command at Scott Air Force Base in Illinois. The program provides moving and storage services for Department of War (formerly Department of Defense) and Coast Guard personnel when they relocate.
From January 2015 to March 2019, Denali employees allegedly submitted false customer satisfaction surveys with perfect scores for their own company. Investigators found that Denali staff used call spoofing applications to disguise their phone numbers and impersonated military or Coast Guard personnel during survey calls by altering their voices.
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 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 Department of the Air Force Office of Special Investigations said, “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.”
The United States alleges that Denali’s actions led it to receive more DP3 shipments than it otherwise would have obtained because its performance scores were artificially inflated through these false surveys—even when actual service members were dissatisfied with their moves. As a result, United States Transportation Command removed Denali from participation in DP3 in 2022.
Jennifer Desautel, Director of the Defense Contract Audit Agency commented: “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 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. Assistant United States Attorney Laura Barke represented the government.
Members of the public can report suspected fraud within DoW 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.
