Investigation reveals ‘chameleon carriers' are dodging DOT regulation

LIBERTY, Mo. - A 41 Action News Investigation uncovered trucking companies with a lengthy history of safety violations - some even ordered to shut down by federal agencies - are able to circumvent regulations to keep driving right beside your family.

The Department of Transportation and the Federal Motor Carrier Safety Administration (FMCSA) uses what's called a DOT number to identify every company and keep track of drivers' records, vehicle maintenance and accidents. It's an effort to keep bad drivers and companies off the road.

However, the 41 Action News Investigators uncovered companies with lengthy histories of safety violations are getting new DOT numbers and, in turn, wiping their slate clean.


Binder Singh has operated trucking companies in Olathe for more than a decade. His current company, Freight, INC, has a questionable safety rating.

The Federal Motor Carrier's Safety Administration said 96 percent of the companies on the road have better vehicle maintenance records, and 98 percent have better driver safety records.

In 2012, records obtained by the 41 Action News Investigators from the Missouri Highway Patrol show troopers issued citations on his trucks seven times. On three separate occasions, troopers found Freight, INC, trucks with brakes that were out of service.

Singh's background shows Freight, INC was not the only company he had owned. In fact, the 41 Action News Investigators discovered Singh has operated several companies, each with a different DOT number.

Some companies were found under family members' names, while others were licensed under his own name. Each company had a different DOT number, but they were easy to spot because they have one thing in common: Singh's home address in Olathe.

In 2008, the FMCSA issued a stop order to one of his companies, Royal Transport, INC, after Singh did not pay fines associated with safety violations for having accurate driver log books. That year, Singh declared bankruptcy and reopened under the new name Freight, INC using the same address. He received a new DOT number and safety history with no violations.

When the 41 Action News Investigators questioned Singh about changing DOT numbers, he said he only changed numbers because his company went out of business.

When contacted about our investigation of Singh, the FMSCA confirmed they were also looking into allegations Singh switched DOT numbers. In late January, investigators ordered his records consolidated and shut down his business accusing him of trying to avoid his negative compliance history. Singh has 21 days to appeal their findings.

We tried to speak with Singh again after the FMSCA took action. Singh said he would need to speak with his attorney.


NEXT - Chameleon Carriers shift DOT numbers

The practice of switching DOT numbers is so widely known in the trucking industry, they have a name for it. They call these companies "chameleon carriers" due to their ability to shift companies and DOT numbers seamlessly to avoid safety violations, financial obligations, and in some cases, litigation.

FMSCA declined to answer our questions about this issue on camera, but they do know about the problem. A March 2012 report by the Government Accountability Office studied the growing problem.

The report looked at applicants for DOT numbers in 2010 and red flagged 1,136 applicants with chameleon attributes, like similar addresses and company officers. The report said that number had grown significantly from 759 in 2005.

The GAO also discovered 18 percent of the companies they identified with chameleon attributes were later involved in severe crashes. The report pointed out that is three times higher than the rate of 6 percent for new applicants without chameleon characteristics.



Jennifer Smith knows how easily companies can change names and get new DOT numbers.

Smith's husband Matthew, daughter Laura, and her in-laws, Richard and Sally Smith, were driving through Napa Valley for a vacation in early June of 2010. They had slowed for congested traffic when the fatigued driver of an 18-wheeler plowed into the back of their SUV and pushed them into the path of another oncoming semi.

All four died at the scene.

"The life I had is gone," Smith said.

Kansas City attorney Tim Dollar represented Jennifer Smith. He said he was contacted by former drivers and employees of the company, KLC, who told him the company encouraged drivers to violate hours of service and falsify logs, which put them on the road longer.

The driver of the semi that rear-ended the Smith family told attorneys the same thing during a deposition — that he made a conscious decision to falsify his log to show fewer hours on duty.

The FMCSA stepped in to investigate reports that other drivers within the company were also falsifying logs to show fewer hours on duty. The owner of the company said the FMCSA found drivers were falsifying logs and the owner said he did not dispute their findings.

According to a study by the FMCSA, driver fatigue is one of the leading contributing factors to trucking accidents in the United States.

"You're impaired. Your judgment is slower. Your ability to react to others on the highway is significantly reduced thus resulting in a significantly higher probability of serious disability or death," Dollar said.

Dollar believes that played a role in the deaths of the Smith family members.

"There's no question that the driver in this case was in a fatigued and impaired condition which was a contributing factor to the crash," Dollar added.

NEXT - Company receives new DOT numbers while under investigation

While Jennifer Smith's civil case was proceeding, attorneys discovered the company had already started changing names and DOT numbers.

In fact, the very day the FMCSA notified KLC of the investigation, the owner filed paperwork with the state of California for two new business licenses. Using the same address, he applied for similar company names: KLC Logistics and KLC Resource Management.

He also applied for new DOT numbers.

"(It) stunned me because this wasn't even an attempt on behalf of KLC to disguise in any way the effort. They were blatant about it and very shortly received approval from the Department of Transportation to do so," Dollar said .

"Technically what they are doing is illegal so why isn't anybody seeming to check that, because it's happening all over the place. I just don't understand why nobody is checking," Smith said.

The flaw in the system leaves Jennifer Smith and her family still searching for justice.

"It seemed like there was virtually no penalty for any of the parties at all except for me," Smith said.

41 Action News tried contacting KLC, but the number listed was no longer working. We tracked down two numbers for the company's owner but he did not return our calls.

The FMCSA declined our request to do an on-camera interview. However, they did respond over the phone and by email to our requests for information. Agency spokesman Duane DeBruyne told us the agency has issued 15 " Operations Out-of-Service and Record Consolidation " order in the past 18 months.

DeBruyne said they don't feel companies can easily get new DOT numbers and points to the agency employing increasingly sophisticated techniques in the application vetting process. He also says the agency strengthened regulations and "raised the bar" for entry in 2009.

The companies highlighted in our report applied for new DOT numbers in 2011. The GAO study examined applicants in 2010. We asked follow up questions highlighting this, but have not yet back from FMCSA.

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