Scammers Plead Guilty to Load-Board Scheme

This story appears in the March 9 print edition of Transport Topics.

A pair of California residents have pleaded guilty to defrauding dozens of truckers and brokers of at least $2.4 million in an Internet load-board fraud scheme that included hacking into the Federal Motor Carrier Safety Administration’s Web site.

The two men — Nicholas Lakes, also known as Dmitry Livshits, and Viacheslav Berkovich — face long prison terms and could be ordered to pay victims as much as $3.5 million in restitution.

They pleaded guilty Feb. 24 in federal court in Los Angeles. Lakes faces a maximum sentence of 70 years and Berkovich 45 years, but both probably will receive shorter prison terms because they acknowledged their guilt.

The men are scheduled to be sentenced on June 29.

Using bogus corporations and fake identities, Lakes and Berkovich illegally accessed an FMCSA electronic records Web site and commercial Internet load boards.

They used fictitious brokerages that offered to transport trucking loads located on commercial In-ternet load board Web sites and collect payment from original brokers, according to court documents (click here for Premium Content story).

Using dummy company names ranging from Cargoland Brokerage to Vega Trucking, Lakes and Berk-ovich double-brokered trucking jobs to legitimate carriers, but never paid the trucking companies or brokers for the actual work that was done, the plea agreement said.

U.S. Department of Transportation investigators said the fraudulent schemes began as early as 2005 and ended with the arrests of the two in October 2008.

Federal investigators said Lakes and Berkovich illegally hacked into the FMCSA Web site to create fictitious companies and change the names, addresses and telephone numbers of legitimate brokers and motor carriers.

Although the financial records of the two men were sealed from public view by a federal judge, the plea agreement calls for Lakes within 60 days to turn over to the U.S. Marshals Service $1.1 million in cash from an account with TD Ameritrade. Court documents said Lakes controlled the account, which comprised proceeds from the pair’s illegal activities.

“I think half the people they owe money to don’t even know they’re in jail,” said Karen Pelle, president of Megatrux, Rancho Cucamonga, Calif.

Megatrux lost more than $9,000 in a deal with the scammers, Pelle said.

“But the good thing about it is that at least some people are going to get their money back, and hopefully not just attorneys,” Pelle said. “Maybe there won’t be much money left over, but at least these guys are off the street.”

While he said he was happy to see that the two men were being punished, Robert Voltmann, president of the Transportation Intermediaries Association, said load-board fraud actually has been growing since the economic downturn.

“We’re very pleased that the justice system caught up with these jokesters,” Voltmann said. “But we wish the Department of Transportation did more to protect from fraud in the marketplace. But since they don’t, we’ve got to rely on the private sector to identify who the problem players are.”

“It’s a huge problem for my members, and it’s a huge problem for American Trucking Associations members,” Voltmann said.

A spokesman for the U.S. Attorney’s Office in Los Angeles said that during sentencing, prosecutors will present a list of victims to a federal judge.

To be considered for restitution, those who believe they have been victims of the two men should contact the U.S. Attorney’s victim witness office, the spokesman said.