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Major Shipping Companies Accused of RICO Violations in New Suit

December 12, 2024 Michelle Casady

A lawsuit filed in federal court in Dallas Thursday by a family-owned logistics company accuses some of its biggest competitors of “illicitly” building a multibillion-dollar business by “systematically defrauding consumers and small business owners” in violation of the Racketeer Influenced and Corrupt Organizations Act. 

Florida-based Freight Essentials and its founder and CEO Dylan Admire filed a 61-page lawsuit that names a group of competitors that allegedly comprise the “fourth largest U.S. logistics brokerage organization,” with $4.9 billion in annual revenue, as defendants. They are: WWEX UNI TopCo Holdings, Worldwide Express, GlobalTranz Enterprises, Unishippers Holdings, Accord Topco, Redcon1, Revive MD Supplement Company and five individual defendants. 

Rogge Dunn of Rogge Dunn Group, who represents Freight Essentials, called the lawsuit a “classic David versus Goliath case” in a statement. 

“Our lawsuit shines a light on the defendants’ practices and is important to consumers everywhere to ensure transparency and fair trade in the country’s shipping industry,” he said. “This is a clear and simple case of corporate greed versus market integrity. Small business owners like Dylan are fighting a difficult but crucial battle as they take on corporate giants.” 

Freight Essentials alleges the defendants squeeze out small competitors like it, which it calls business development companies, by charging “hidden fees.” 

“In fact, the WWEX entities’ executives went so far as to joke that they included specific hidden fees in order to ‘juice’ their margins,” the lawsuit alleges. “To falsely pump its [earnings before interest, taxes, depreciation and amortization], GlobalTranz intentionally misrepresented its true transportation costs by including hidden fees and defrauding BDCs out of their portion of ‘gross margin splits,” which were the commission payments to which they were contractually entitled.”

As the lawsuit lays it out, Freight Essentials partnered with GlobalTranz in January 2020 to broker shipping services in exchange for a percentage of the gross margin of the revenue generated. Three years later, Freight Essentials alleges, it was the largest business development company working with GlobalTranz, generating more than $60 million in revenue and shared earnings. 

The company’s CEO, Admire, allegedly confronted WWEX (which in 2021 combined with GlobalTranz) when he realized GlobalTranz was “improperly misrepresenting costs to its BDCs by over 15%, and even 30% in some instances.”

“When he confronted WWEX with questions regarding those irregularities, WWEX retaliated against him by inducing GlobalTranz to terminate Freight Essentials’ contract, repeatedly defaming plaintiffs, and stealing their customers,” the lawsuit alleges. 

In addition to bringing three claims alleging RICO violations, the lawsuit also alleges fraud and conspiracy and fraudulent concealment. 

“Freight Essentials refuses to be run out of business or silenced,” the lawsuit alleges. “Accordingly, plaintiffs filed this lawsuit to put a stop to defendants’ scheme of charging hidden fees to BDCs, stealing revenues from BDCs, and hiring BDCs under false pretenses and then terminating them without cause to steal the clients they had found, nurtured, and did business with.”

The case has been assigned to Chief U.S. District Judge David C. Godbey. 

Freight Essentials is also represented by Lane Webster of Rogge Dunn Group, Andrew C. Whitaker of Figari + Davenport and Michael K. Hurst and Ted Ibarguen of Lynn Pinker Hurst & Schwegmann. 

Counsel information for the defendants was not available Thursday. Messages left with WWEX Group, GlobalTranz and Worldwide Express seeking comment were not immediately returned Thursday.  The case number is 3:24-cv-03104.

Michelle Casady

Michelle Casady is based in Houston and covers litigation and appeals — including trials, breaking news and industry trends — for The Texas Lawbook.

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