A federal grand jury recently indicted a Russian trucking owner — who is already awaiting trial on charges that include a $150 million military kickback scam and a murder-for-hire plot — as well as eight other Utah-based trucking company executives in an alleged “pay-to-play” bribery scheme involving a former FedEx Ground (FXG) manager.
FXG is a subsidiary of Memphis-based shipping and logistics giant FedEx Corp. (NYSE: FDX).
Court documents allege that Leonid Teyf, 58, of Raleigh, North Carolina, and the other executives paid more than $1 million in bribes to former FedEx Ground hub manager Ryan Lee Mower, 47, of Bountiful, Utah, in exchange for lucrative contracts.
Prosecutors claim the trucking companies involved in the scheme with Mower raked in more than $280 million over a 10-year period, though FedEx Ground put that sum in context.
“The vast majority of this money was payment for work that was actually performed,” said Meredith Miller, FedEx Ground spokeswoman. “Therefore, because FedEx Ground would have paid to have that work performed in any event, the net financial loss to FedEx Ground is a small fraction of this amount and is not material.”
FedEx Ground contracts with 5,600 service providers throughout the United States and Canada, according to the company’s website.
“The deplorable behavior detailed in the indictments is shocking and does not reflect the professionalism and values we expect from FedEx employees or service providers,” Miller told FreightWaves. “We are taking this opportunity to reinforce our ethics standards, compliance programs and expectations, and reporting obligations with our employees and service providers.”
Federal prosecutors allege that Teyf and four other executives of Salt Lake Trucking Group (SLTG) paid more than $300,000 in bribes to Mower over a 10-year period to “fraudulently grow and maintain their businesses” and received preferential treatment.
Teyf is part-owner of SLTG, which consists of 10 Utah-based companies that contracted with FedEx Ground.
SLTG netted around $150 million from FedEx Ground in the decade it conspired with Mower, prosecutors claim.
Mower, Teyf and the other SLTG executives have been charged with 16 counts of wire fraud conspiracy, promotional money laundering and conspiracy of money laundering.
Other SLTG executives named in the indictment include Yevgeny Felix Tuchinsky, 59, of Salt Lake City and San Diego; Alexsander Vasiliyevich Barsukov, 52, of Salt Lake City; Konstantin Mikhaylovich Tomilin, 50, of Salt Lake City and Pennsylvania; and Felix Tsipelzon, 48, of South Jordan, Utah.
Russian-born Teyf, along with his wife, Tatyana Teyf, are awaiting trial in North Carolina for their alleged part in a $150 million kickback scheme related to Russian military contracts. From 2010 to 2012, Teyf served as an executive of a Russian military contractor, according to court filings. Prosecutors claim in the November 2018 filing that the Teyfs, among others, transferred more than $39 million in funds “derived from a specified unlawful activity” into more than 70 accounts opened at four U.S. banks from May 2014 to May 2018.
During the course of the money-laundering investigation, prosecutors also uncovered a murder-for-hire plot. Court filings claim Leonid Teyf paid a confidential source $25,000 and supplied him with an unlicensed firearm to have a man he suspected of having an affair with his wife killed.
Investigators claim he previously agreed to pay $25,000 to a Department of Homeland Security agent to have the same man deported back to Russia, but the process was taking too long.
“Mr. Teyf is not guilty of the charges in the Utah FedEx-related indictment,” Robert S. Wolf, partner of Moses & Singer LLP, told FreightWaves. Wolf said he is representing Teyf in all of his legal cases. Teyf has not appeared in the Utah case thus far, Wolf added.
Mower has been named in five federal indictments and faces 51 counts for allegedly “exploiting his position for financial gain.” He was the highest-ranking executive at the FXG hub in Utah from 2008 to October 2019 and was responsible for overseeing the shipping giant’s contract service providers. Part of his job was to ensure “that each local trucking company complied with FXG policies and regulations,” according to the United States Attorney’s Office for the District of Utah.
The former FXG manager is also accused of conspiring with Hubert Ivan Ugarte, 52, of Draper, Utah. Both are charged with four counts of wire fraud and six counts of money laundering in the alleged bribery scheme. Ugarte owned and operated several trucking companies that contracted with FedEx Ground. Prosecutors allege he received around $90 million in revenue over an eight-year period because of FXG contracts and paid Mower approximately $490,000 in bribes.
Also named in the alleged bribery scheme with Mower are Davor Kovacevic, 41, and Zlate Balulovski, 41, of West Jordan, Utah, who own and operate several trucking companies in the state. All three are charged with seven counts of wire fraud and three counts of money laundering stemming back to April 2012.
Prosecutors allege Kovacevic and Balulovski received around $21 million in FXG net revenue over a seven-year period and claim Mower was paid around $165,000 in bribes.
Mower and William Shayne Murdock, 42, of Providence, Utah, were charged in a 10-count indictment with wire fraud, promotional money laundering, concealment money laundering and money laundering, according to prosecutors.
Over a five-year period, Murdock, who owns several trucking companies in Utah, allegedly paid Mower nearly $50,000 in bribe money, according to court documents. In exchange, Murdock’s companies received about $19 million in FXG revenue.
Mower also faces five charges related to claims he filed false tax returns to the Internal Revenue Service for the 2013 to 2017 tax years.
Read more stories by FreightWaves’ Clarissa Hawes