KANSAS CITY, Mo. — Yellow Corporation, formerly known as YRC Worldwide Inc., of Overland Park has caught the eyes of government officials after discrepancies were discovered in its claims under the Coronavirus Aid, Relief and Economic Security Act (CARES Act).
The U.S. House Select Subcommittee on the Coronavirus Crisis began investigating waste, fraud and abuse in pandemic relief programs implemented by the Department of Treasury, according to a news release.
Such investigation led a subcommittee focusing on the CARES Act loan to be concerned by the program’s administration.
Yellow Corporation received 95% of the program’s funds and allegedly “made misleading representations to government officials in the course of its efforts to obtain a loan under the CARES Act,” according to the release.
Set up as a national security loan program to combat strain due to pandemic-related loss, the subcommittee received email communication where one Yellow Corporation executive revealed they had other ideas.
Email correspondence includes the executive stating the loan could be used to “catch up” capital investment while the company “had its hand in the cookie jar.”
Additional alleged misleading representations include Yellow Corporation reporting twice the share of trucking services to the Department of Defense than the DOD assessed.
Based on such misleading representations, Select Subcommittee on the Coronavirus Crisis Chairman James E. Clyburn wrote Wednesday to request the Office of Inspector General investigate if the errors were intentional.
“I write today to request that the Office of Inspector General (OIG) investigate whether any of the misleading representations the company made in applying for its $700 million loan constitute knowing false claims and false statements within the meaning of the False Claims Act, or otherwise violate federal law. I request that OIG refer any evidence or assessment that the company violated the False Claims Act or any other laws to the Department of Justice,” Clyburn wrote to Deputy Inspector General Richard Delmar.
In response to the allegations, a Yellow Corporation spokesperson told KSHB 41 the "unsubstantiated assertions" against it are "baseless."
The spokesperson also shared the government owns 30% of the company as part of the agreement with the Department of Treasury, the company has paid more than $25 million in interest on the loan and CEO Darren Hawkins "has repeatedly said that the loan would be paid back."
"... Yellow was completely transparent and forthright with Treasury throughout the loan procurement process," the spokesperson said.
In regard to providing information and requested documents throughout initial investigation, the spokesperson maintains Yellow Corporation has "fully cooperated with the committee and will continue to do so."
