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Columbia, S.C. • A Utah-based company that handles moves for some military members in South Carolina and Georgia is being accused of inflating costs and overbilling the federal government, allegations that could potentially result in millions of dollars in penalties and fines.

Covan World-Wide Moving Inc., and an affiliate, Coleman American Moving Services, Inc., move soldiers to and from South Carolina's Fort Jackson and Georgia's Fort Gordon, according to the lawsuit.

The companies are paid on the weight of the shipments they handle. According to the lawsuit, initially filed in 2012 but unsealed only last month, Covan and Coleman inflated the net weight of the shipments — gross weight of the packaged belongings, minus the weight of shipping crates — then sent the exaggerated invoices to the federal government.

Relying in part on information from several Coleman employees acting as whistle-blowers, the U.S. Department of Justice said the falsified paperwork sometimes resulted in billing the government for thousands of excess pounds.

Covan is based in Ogden and works with Coleman's facilities in Augusta, Ga. Attorneys for the companies have said in court papers that the meritless claims should be dismissed and don't contain enough specifics on alleged misdeeds.

"The government's allegations are woefully lacking in particularity concerning the time, place and manner of allegedly fraudulent claims," they wrote. "Plaintiffs' plan here appears to be to attempt to 'flesh out' their claims of fraud through the process of discovery."

On Tuesday, one of the attorneys representing the companies reiterated the lack of specific allegations in the complaint.

"The company is going to vigorously oppose this thing. We just don't believe this is a case," said Jim Wyrsch, an attorney based in Kansas City, Mo. "We just don't think there is any kind of a pattern here."

The lawsuit was filed in federal court in South Carolina, but the government said the overbilling is likely happening throughout the companies' nationwide network, part of a "corporate policy designed to fraudulently increase corporate profits at the expense of the United States."

Court papers included anecdotes regarding service members' moves to Pearl Harbor, Hawaii, where government officials had also become suspicious of the accuracy of weights in the companies' shipments. Upon further review, according to the government, Covan, Coleman and their affiliates consistently overbilled the U.S. by 9 to 10 percent of a shipment's actual weight.

"Defendants' false claims scheme has resulted in a substantial loss to the United States and its taxpayers," the government wrote.

Since 2009, according to prosecutors, the companies and their affiliates have billed the federal government for $723 million worth of shipping and relocation services for members of the armed services.

If found guilty, the companies could face millions of dollars in fines for each inflated invoice. An audit found more than 430 instances of overbilling, according to the lawsuit.

A motion hearing has been scheduled for Feb. 14.

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