A FedEx ground hub manager in Utah allegedly took more than $1 million in bribes as part of a complex “pay-to-play” scheme where, in return, he gave special preference to trucking companies for lucrative contracts and driving routes — some of which didn’t actually exist on a map.
Ryan Lee Mower, 47, of Bountiful, was named in five federal indictments Monday and faces 51 counts, overall, for exploiting his position for financial gain. Nine other individuals, all of whom own trucking businesses, are also named in the charges for benefiting from the conspiracy to defraud FedEx.
It’s one of the longest and most widespread financial cases to ever be prosecuted in the state.
Mower had worked for FedEx Ground from at least 2008 until this month, serving as the highest-ranking employee at the shipping hub in North Salt Lake where he managed contracts, according to the indictments from the U.S. Attorney’s Office for Utah.
He apparently used his job to award special deals to trucking companies that wanted to expand — but that didn’t deserve contracts, weren’t qualified or didn’t meet regulations. Those businesses raked in more than $280 million and Mower got a cut of the profits. Public bids never went out for many of the services the companies provided.
The documents unsealed Monday say that Mower and the individuals that benefited from the scheme spent their money on yachts, houses, Cadillacs, swimming pools and diamonds rings (including a 2.55-carat stone). In one text message included in the filings, Mower appears to be talking to a client and writes: “You get way more work than the rules would allow.”
Federal agents have seized most of those items — as well as 60 bank accounts — and phone records from those involved, according to a news release.
“These individuals allegedly exchanged bribes for business opportunities and, as a result, lined their pockets with hundreds of millions of dollars spent on property, luxury cars and other extravagances,” said Paul Haertel, special agent in charge of Salt Lake City’s FBI field office, which helped with the investigation.
The illegal operation Mower allegedly led had been running for 10 years, starting with contracts for the Salt Lake Trucking Group in 2009.
Five employees there, along with Mower, have been charged with wire fraud conspiracy and money laundering for submitting false contracts to FedEx Ground. The conspirators, the charges allege, falsified miles, inflated how far their trucks drove and received payments for routes that didn’t exist and that they didn’t drive.
The business netted $150 million from FedEx Ground over that time and bribed Mower with $300,000. Another company received $90 million and paid Mower $490,000. A third gave him $165,000.
“To be clear, we are disappointed by the egregious activity of these individuals and are fully cooperating with the authorities in their investigation of this criminal behavior,” responded FedEx Ground in a prepared statement. However, the company noted, “the vast majority of this money was payment for work that was actually performed,” so the net financial loss “is not material.”
In 2012, the indictments say, Mower started bringing in other trucking companies based across the nation and in Utah, spread over FedEx’s 39 hubs. In total, 10 individuals have been charged. And Mower faces a separate indictment for falsifying federal tax returns.
“The conduct alleged in the indictment not only runs counter to societal expectations for American business, it runs afoul of the laws of the United States,” added U.S. Attorney for Utah John Huber. “The alleged unjust enrichment comes at the expense of those who play by the rules in the market place.”
Mower has been issued a summons to appear in court Wednesday. He could not immediately be reached for comment Monday night.
The other individuals have been arrested or warrants have been issued for their arrest. Some live in other states, including California and North Carolina, and may be tried there. The maximum potential penalty for wire fraud and conspiracy is 20 years in prison; money laundering is 10 years.