DATE: Friday, August 1, 1997                TAG: 9708010727

SECTION: LOCAL                   PAGE: B6   EDITION: FINAL 

SOURCE: BY STEVE STONE, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   41 lines

TRUCKING COMPANY MAKES PLEA INVOLVING FALSE MILEAGE CLAIMS

A road not taken will cost a Virginia Beach trucking firm $712,000.

The U.S. Attorney for the Eastern District of Virginia announced Thursday that it has reached a plea agreement with Canupp Trucking Inc., settling a charge that the company overbilled the federal government by fudging on mileage reports.

Between 1991 and 1994, the government chargs, Canupp filed more than 250 false mileage reports, claiming to have taken a circuitous 68-mile detour around the Chesapeake Bay Bridge-Tunnel on runs to the Northeast. An audit of company records revealed that the trucks had actually taken the shorter, more direct route up the Eastern Shore.

The government said the false mileage claims cost taxpayers more than $275,000.

The charges flow from a contract awarded to Canupp in March 1991 by the Military Traffic Management Command after bids were submitted by several transit companies. The agreement ran for three years from August 1991 to September 1994.

The contract provided shipping services between Norfolk and naval installations in the Northeast. Payment was based on a set mileage rate and a standard measure of distances - not actual odometer readings - between Norfolk and the destinations.

Normally, the set routes called for use of the Chesapeake Bay Bridge-Tunnel. However, the company said that height and weight restrictions at the tunnel would sometimes require use of alternate routes through Eastern Virginia and Maryland. In particular, the company said it could not use the tunnels when loads were light and, thus, trailers would rise too high off the ground to meet the tunnel's 13-foot-6-inch limit.

Investigators found, however, that while that had been a concern at one time, by 1991 Canupp had largely solved the problem by using trucks with low-profile tires. And an audit of company documents, including fuel records and drivers' logs, revealed that the direct route was being used even though the government was being billed for the longer route. KEYWORDS: PLEA AGREEMENT

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