Household goods movers indicted for extorting customers
November 6, 2019
Owners of several household goods moving companies have been indicted in a New York federal court for their role in a fraud scheme that involved extorting customers.
On Oct. 25, Michel Nadel and Yarin Nadel of New York were charged with several counts in a U.S. District Court. Criminal counts include conspiracy to defraud the U.S., false statements and conspiracy to commit wire fraud.
According to the indictment, the Nadels owned State to State Moving NY, Around the Clock Moving Services, Direct Van Line Services, Green Peace Transportation, and other similar moving companies. From February 2018 to July 2019, the two men allegedly defrauded customers by misrepresenting estimated charges for their services, according to charges brought by federal prosecutors.
The Nadels, along with others involved, allegedly would register household goods companies using fictitious names and addresses. In addition to quoting charges they had no intention of honoring, the two men allegedly misrepresented the number, ownership and U.S. Department of Transportation registration of their trucks, according to the indictment.
Furthermore, the Nadels also allegedly misrepresented the number of movers involved in the transport of goods. They also allegedly lied about quality control measures to be used during transport.
Employees of the moving companies would show up to a customer’s residence with either rental trucks that were too small or too few to carry the amount of household goods to be transported.
Once the household goods were completely loaded, the Nadels allegedly would either call or email the customer to inform them that additional fees were due as a result of unforeseen circumstances. Those fees often resulted in an increase of 10% from the original quote. Federal regulations restrict additional fees to exceed a 10% increase for nonbinding estimates.
If customers refused to pay, company representatives allegedly would threaten to keep the household goods in storage. Adding insult to injury, the company would charge and remit additional storage fees to the customers.
Even if customers submitted to the demands, their belongings would not be delivered until weeks or months after the scheduled delivery date. Furthermore, valuable items were often damaged or missing.
Court documents claim that the Nadels received at least $100,000 in additional fees from dozens of customers. That does not include the costs of damaged household goods.
Although charges stem from incidents in 2018 and 2019, the alleged scheme may have gone back even further. According to the indictment, from November 2015 to July 2019, the Nadels failed to disclose affiliations with trucking companies whose operating authority has been revoked or suspended when filling out registration paperwork.
The company Around the Clock Moving Services had its authority revoked in October 2016. However, the Nadels allegedly continued to do business under various entities, commonly known as reincarnated motor carriers or chameleon carriers.
Additional household goods carriers were granted authority after the Nadels allegedly used false names and addresses to hide their identity. Consequently, authorities would be blind to the Nadel’s affiliation with out-of-service carriers.
Michael and Yarin Nadel each face four counts, including one count of conspiracy to defraud the U.S., two counts of false statements and one count of conspiracy to commit wire fraud. Both men have pleaded not guilty on all counts.