Julie G. Tucker, a 15-year Trendset
employee who left in 2011 as director of
administration, admitted in court to
using shipper funds over a 15-month
period to finance an opulent lifestyle for
herself and her husband, James, a former
employee of the U.S. Department of
Homeland Security. On April 11, Julie
Tucker was sentenced in federal court in
North Carolina to 33 months in prison on
two counts of filing false income tax
returns and one count of wire fraud. She
was also ordered to pay more than
$590,000 as restitution to Trendset.
Tucker, who had access to Trendset’s
accounts and was authorized to write
checks and make wire transfers, testified
at her trial that she followed the leads of
CEO Gary Selvaggio and his brother
Mark, a principal of the company, according to court records. The brothers used
shipper funds to buy stocks for personal
gain; to purchase real estate and cars; to
fund country club fees and vacations; and
to pay their mother’s mortgage, according
to court records. All of this was concealed
from clients, court records show.
On May 2, Mark Selvaggio was found
dead at his home, reportedly from a self-
inflicted gunshot wound.
IS IT COMMON?
There have been more than a few cases of
scamming and stealing since third parties
began auditing and paying freight bills in
the early 1960s. Still, the scale of the
frauds, the size of the two companies
involved, and the fact that they occurred
so close together have stunned the industry. “We were shocked by this,” said Steve
Applebaum, CFO of Cass Information
Systems Inc., a Bridgeton, Mo.-based
company that handles about $22 billion
of freight payments a year and is believed
to be the largest of its kind in the nation.
Applebaum said such massive deception
is rare. Others, though, are not so sure.
Stephen Craig, managing partner at
enVista, a Carmel, Ind.-based firm that
generates about one-quarter of its revenue
from freight audit and payment services,
said that while he hoped incidents like
these were uncommon, “I suspect there is
more of it than this.”
For the dozens, perhaps hundreds, of
affected shippers, the legal ramifica-
tions are unclear. The freight audit
and payment sector is not a regulated
entity like insurance. Firms can buy
“fidelity bonds” to cover policyholders
for losses stemming from fraudulent
acts by specific individuals. But the
premiums are often too costly for an
industry that operates on thin profit
margins. Most audit and payment
specialists are smaller concerns that
handle transactions totaling hundreds
of thousands of dollars, not the bil-
lions of dollars controlled by players
like Cass, U.S. Bank, and enVista,
among others in an elite group.
