Red Ventures, MYMOVE agree to $2.75M settlement over allegations tied to postal service
The settlement stems from contractual agreements connected to the USPS change of address process.
CHARLOTTE, N.C. (WBTV) – Media company Red Ventures and one of its brands have agreed to pay millions to resolve allegations they violated the False Claims Act by knowingly withholding funds owed to the U.S. Postal Service, prosecutors said.
According to U.S. Attorney Dena King, who represents the western district of North Carolina, those funds were owed under contractual agreements connected to the USPS change of address process.
Court documents state that Red Ventures-owned MYMOVE connects retail companies with people who move and then shares a portion of the monies generated with the USPS.
Between April 2018 through February 2020, MYMOVE and Red Ventures kept revenue owed to the postal service by deducing costs related to the Solo Direct Mail program, “thereby changing the contractual revenue share provision from one of gross revenue to one of net revenue,” court documents allege.
MYMOVE is also accused of improperly and knowingly allocating labor costs related to the same contract, under which MYMOVE bore all of the program costs, to another contract that contained a profit-sharing agreement with the USPS, according to the U.S. attorney.
That increased MYMOVE’s profits at the postal service’s expense by improperly passing off a portion of its labor costs to USPS, prosecutors said.
Red Ventures and MYMOVE have agreed to pay the U.S.$2.75 million to resolve the allegations.
“This settlement demonstrates that those who cheat the government will be held accountable,” King said in a statement. “My office will continue to investigate and hold responsible those who seek to profit from defrauding federal agencies.”
“As always, our movers division handles relationships with our customers, partners and the U.S. government with the highest integrity. Red Ventures has chosen to reach a settlement agreement in this case so that we can resume focus of our time and resources on helping millions of people streamline and improve their moving experience,” a Red Ventures spokesperson said.
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