Day 30. Armenian Ghost Fleet

How Serj Gevorgyan Allegedly Built a Multi-Million Dollar Fraud Empire From 6,000 Miles Away, And Why It Worked

Before we dive deep into Serj Gevorgyan and his alleged Armenian call center empire, before we dissect how nine fake companies stole millions through systematic double-brokering, we need to start with the question that explains why this series exists:

Where else in America can you legally get your hands on hundreds of thousands, even millions, of dollars worth of other people’s property for less than $1,500?

The answer is nowhere. Except trucking.

For about $1,500, you can register a motor carrier authority with FMCSA. No background check. No proof of operational capacity. No verification that you own a single truck or employ a single driver. Just paperwork, a fee, and a prayer that you’re telling the truth. Suddenly, you’ve got a USDOT number, you’re in the databases, and you can legally book freight worth more than most people make in a year.

Want to broker instead of haul? That’ll cost you a $75,000 bond, except you don’t actually have to come up with $75,000. You pay a bonding company a fraction of that, they issue the bond, and you’re in business. When you commit fraud and vanish, it’s the bonding company’s problem, not yours, and good luck to the carriers trying to collect from a bond that’s already been depleted by other victims.

This isn’t a bug in the system. This is the system working exactly as designed, optimized for access, speed, and minimal friction.

That’s why we spent thirty days examining fraud cases that expose just how comprehensively broken the U.S. trucking and brokerage system has become. Dirty third-party examiners selling CDL credentials. Dirty cops looking the other way. Dirty enforcement agents taking payoffs. Dirty DMV employees are processing fraudulent documents. Broken state and federal immigration programs creating identity vulnerabilities. Dirty medical examiners rubber-stamping unfit drivers. No-name corporate entities and shell companies, some based in countries we can barely reach, and a regulatory apparatus so overwhelmed that fraud has become standard practice.Even Governors were noted in as taking part in the corruption.

The American highway freight system isn’t infected with corruption. It IS the infection, and Gevorgyan’s case, the subject of today’s final installment, perfectly illustrates every single vulnerability, every systemic failure, every loophole that makes industrial-scale freight fraud not just possible, but profitable and nearly impossible to stop.

With fewer than 1,000 FMCSA employees trying to police millions of interstate freight movements across fifty state jurisdictions that each do enforcement their own way, which is seldom correct, and with new entrant programs that are a great first step but lack the follow-through needed because the 18-month monitoring window is just too long and under-resourced, the criminals don’t have to be particularly smart. They just have to understand the math.

Gevorgyan apparently understood it perfectly.

Day 30: GEVORGYAN’S NINE GHOSTS

Let’s start with the players. According to the criminal information filed January 29, 2025, by the U.S. Attorney for the Eastern District of Pennsylvania, Serj Gevorgyan (also known as Seryozha Gevorgyan) created and controlled nine motor carrier entities, what prosecutors call the “Subject Companies”:

1. SGSH Trans LLC (USDOT 3214913) Broker

2. Next Level Brokerage, Inc. (USDOT 3602905) Broker

3. Smartdrive, LLC (USDOT 3602241) Broker/Carrier

4. Key Solutions Group, Inc. (USDOT 3336195) Carrier

5. Meelemann & Co. (USDOT 3738505) Broker

6. S4S Logistics, Inc. (USDOT 3821559) Carrier

7. Yellow Elephant Corp. (USDOT 3975319) Carrier

8. Blue Joker, Inc. (USDOT 3980883) Carrier

9. Pink Donut Freight, Inc. (USDOT 3980888) Carrier

I also found some others, like Premier Capital, Lowcoster, LLC which is still active. Look at those names. The first batch sounds professional, generic, forgettable, exactly what you’d want for companies that need to blend into the background noise of legitimate freight operations. SGSH Trans. Smartdrive. Key Solutions Group. They could be anything, which means they attract no particular attention.

Then you get to Yellow Elephant Corp., Blue Joker, Inc., and Pink Donut Freight, Inc. Those are almost playful, quirky enough to be memorable but weird enough that nobody would think they’re real criminal enterprises. Who commits multi-million-dollar fraud through a company called Pink Donut Freight? Apparently, Gevorgyan did.

Each company had its own USDOT number. Each was registered with FMCSA as a legitimate motor carrier authorized to conduct interstate transportation. Each appeared in industry databases, load boards, and carrier verification systems as a real business. Shippers and brokers who checked these companies would see valid operating authority, active registration status, and all the markers of legitimacy.

Except none of it was real.

According to the complaint, Gevorgyan created these entities by filing fraudulent MCSA-1 motor carrier registration forms, the primary application submitted to obtain operating authority from the FMCSA. The forms require straightforward information: company name, business address, ownership details, principal place of business, insurance information, and what kind of freight operations you’ll conduct.

The system assumes you’re telling the truth. Gevorgyan allegedly wasn’t.

• False business addresses: The complaint alleges he listed U.S. locations that were virtual offices, mailbox services, or completely fictitious addresses. On paper, they looked like legitimate business locations. In reality, there was nobody there, no office, no staff, no operations, just a mailing address that created the appearance of domestic presence.

• Sham personnel and “name lending”: According to prosecutors, Gevorgyan used other people’s names as nominal owners, officers, or control persons when those individuals had little or no actual knowledge of or control over what the companies did. This is classic “name lending”, you put someone else’s name on the paperwork to create apparent U.S. control while hiding the real foreign operators. Sometimes the name-lenders know what they’re doing and get paid small amounts to front. Sometimes they’re unwitting victims whose identities get used without their full understanding of the fraud.

• False representations of U.S. control: The MCSA-1 forms allegedly claimed these companies had U.S.-based principal places of business and were controlled domestically, when according to the investigation, actual operational control was exercised from call centers in Armenia, 6,000 miles away and well beyond the practical reach of FMCSA enforcement.

• Fabricated operational intent: The forms stated these companies intended to engage in legitimate interstate freight transportation. The reality, prosecutors allege, was that they never intended to haul anything. The business model from day one was double-brokering fraud, accept loads at higher prices, re-broker them to legitimate carriers at lower prices, pocket the difference, and in many cases never pay the actual carriers at all.

FMCSA processes thousands of these applications every year. They don’t have the resources to independently verify every address, interview every listed officer, or investigate whether applicants actually intend to operate as claimed. The system relies on truthfulness because historically, most applicants were honest. The agency can spot obvious red flags, like an application listing a home address for a company claiming to operate 50 trucks, but sophisticated fraud that uses real addresses, real names, and plausible business structures? That sails through.

Once those USDOT numbers were issued, Gevorgyan had everything he needed, the appearance of legitimacy that would let him access freight, book loads, collect payments, and operate just long enough to steal millions before the regulatory apparatus even realized what was happening.

ARMENIAN CALL CENTERS

Here’s where Gevorgyan’s operation separates itself from typical freight fraud and enters the realm of organized criminal enterprise. According to the complaint, the actual operational control of these nine companies came from call centers located in Armenia. Not one guy with a burner phone. Not a small team working from a basement. Organized, professional call centers with staff, systems, infrastructure, and processes.

Think about what that means. A call center operation requires:

• Office facilities large enough to house multiple workstations, phone systems, computers, and staff.

• Technology infrastructure: Phone systems capable of handling high call volumes, internet connectivity, customer relationship management software, documentation systems for tracking loads, payments, and communications.

• Staff who speak English fluently enough to pass as American-based customer service, who understand freight industry terminology, who can negotiate rates, handle logistics coordination, and maintain the fraud convincingly.

• Scripts for different scenarios, training materials for new staff, quality control to ensure consistency, management oversight to coordinate across multiple fake companies, and systematic procedures for booking loads, finding carriers, managing paperwork, and collecting payments.

• Banking relationships to receive payments from shippers, mechanisms to move money internationally, methods to avoid detection through anti-money-laundering systems, and ways to keep the stolen funds accessible to the operators.

This isn’t amateur fraud. This is criminal infrastructure operating at scale.

The call centers allegedly handled every aspect of the fraud operation:

• Staff would monitor load boards, respond to freight postings, negotiate rates with shippers, and accept loads on behalf of the Subject Companies. To the shipper on the other end of the phone or email, everything seemed normal, professional communication, appropriate questions about freight specifications, standard rate negotiation, typical paperwork exchange.

• Once a load was booked at the higher “broker rate,” call center staff would immediately find legitimate carriers willing to haul the freight at lower rates. They’d post on load boards, contact carriers directly, negotiate the lower rate, and arrange pickup and delivery. The legitimate carriers had no idea they were dealing with a fraudulent operation, the USDOT numbers checked out, the paperwork looked standard, and the initial communications seemed professional.

• The call centers handled bills of lading, rate confirmations, proof of delivery, invoices, and all the paperwork that makes freight transactions work. They had to maintain this documentation convincingly enough to avoid raising red flags with shippers or carriers during the active phase of the fraud.

• When shippers paid the Subject Companies for freight services, those payments went to accounts controlled by the operation. The call centers then had to manage the second half of the fraud, not paying the carriers who actually moved the freight, or paying some while stiffing others to avoid generating too many complaints too quickly.

• The call centers maintained the appearance of legitimate U.S.-based operations. When carriers called asking about payment, they got professional-sounding excuses. “Accounting is processing your invoice.” “We’re waiting on the shipper to pay us first.” “There’s a documentation issue we’re working through.” The goal was to string carriers along long enough to steal from more victims before the complaints reached critical mass.

Why Armenia?

Gevorgyan’s choice of Armenia as a base of operations wasn’t random. It reflects sophisticated understanding of jurisdictional vulnerabilities:

Operating from Armenia places the command structure 6,000 miles from U.S. law enforcement. You can’t just raid an office in Yerevan the way you can in Philadelphia or Houston. Search warrants, subpoenas, arrests, all of it requires international cooperation, mutual legal assistance treaties, diplomatic coordination, and often months or years of bureaucratic process. By the time U.S. investigators even identify the Armenian connection, the operation has already stolen millions and can dissolve and relocate if heat builds.

Even if U.S. prosecutors build a solid criminal case and secure an indictment, actually getting the defendant back to face charges is never guaranteed. Armenia and the United States have some level of mutual legal assistance cooperation, but extradition is complicated, politically sensitive, and can be fought through foreign legal systems. Some defendants simply refuse to return, and the U.S. has limited practical options beyond sanctions and international warrants that may never be executed.

Running call centers in the United States is expensive, wages, benefits, payroll taxes, facilities, regulatory compliance. Armenia offers English-speaking labor at a fraction of American costs, which means Gevorgyan could scale the operation to handle hundreds or thousands of loads without overhead eating significantly into theft margins. When your business model is fraud, every dollar saved is a dollar stolen.

Armenia is 8-9 hours ahead of U.S. Eastern Time, but call center workers operating on evening and night shifts can seamlessly cover American business hours. A staff member working 5:00 PM to 2:00 AM in Yerevan is covering 9:00 AM to 6:00 PM Eastern Time, normal American freight industry hours. To a shipper or carrier on the phone, there’s no obvious tell that they’re speaking with someone overseas.

U.S. agencies investigating domestic fraud can coordinate relatively easily, DOT-OIG talks to FBI, who coordinates with IRS-CI, who shares information with state enforcement. Once the operation crosses into Armenia, that coordination becomes exponentially harder. Different languages, different legal systems, different investigative standards, different political considerations. Evidence that would take days to gather domestically can take months or years internationally, if it can be obtained at all.

The Armenian call centers weren’t just where the fraud happened. They were a defensive strategy that made investigation harder, prosecution more complex, and enforcement practically impossible in real-time.

THE FRAUD MECHANICS

Let’s walk through exactly how a typical Gevorgyan fraud transaction allegedly worked, because understanding the mechanics is critical to understanding why it was so effective and so devastating.

Step 1: A shipper needs freight moved

A manufacturer in Ohio has a load of consumer goods that needs to get to a distribution center in Georgia. It’s a standard freight move, 40,000 pounds, 48-foot dry van, about 600 miles. They post it on a load board or work through their normal brokerage channels. The going rate for this lane is around $2,500, which is what they’re willing to pay.

Step 2: The Subject Company books the load

Blue Joker, Inc., one of Gevorgyan’s nine companies, sees the posting and accepts the load. From the shipper’s perspective, everything looks legitimate:

• Blue Joker has a valid USDOT number (3980883)

• They’re registered with FMCSA as an active motor carrier

• They appear in industry databases and verification systems

• Their rate is competitive and their communication is professional

• They provide proper documentation, rate confirmation, insurance certificates, all standard

The shipper books them, sends over the pickup details, and considers the problem solved. They’ve hired what appears to be a legitimate carrier to move their freight.

Step 3: Blue Joker immediately re-brokers the load

Here’s where the fraud starts. Blue Joker doesn’t own any trucks. According to the complaint, none of the Subject Companies did. They were never actually motor carriers in any operational sense, they were fraudulent intermediaries posing as carriers.

So Blue Joker’s call center staff immediately turn around and post the same load on carrier boards, looking for someone to actually move the freight. They find a small trucking company, let’s call them Reliable Transport, a three-truck outfit based in Tennessee. Blue Joker offers them the load at $1,700.

From Reliable Transport’s perspective, this looks like standard brokerage:

• Blue Joker’s USDOT number checks out

• The rate is reasonable for the lane (not great, but acceptable)

• The paperwork looks normal

• They need the work

Reliable accepts the load.

Step 4: The freight moves successfully

Reliable Transport picks up the load in Ohio, hauls it 600 miles, and delivers it on time to the Georgia distribution center. They do everything right, professional service, no damages, proper paperwork, timely delivery. They’ve fulfilled their end of the contract completely.

They submit their proof of delivery and invoice Blue Joker for the agreed-upon $1,700.

Step 5: The shipper pays Blue Joker

The shipper receives their freight, verifies delivery, and pays Blue Joker the $2,500 they were invoiced. That payment goes to bank accounts controlled by Gevorgyan’s operation. The money has now entered the fraud apparatus.

Step 6: Reliable Transport never gets paid

This is where the real damage happens. Days go by. Reliable Transport’s invoice to Blue Joker remains unpaid. They call the number on file. Someone answers, remember, there’s a professional call center handling communications, and gives them standard excuses:

“Your invoice is in our accounting queue, payments go out on Fridays.”

Then Friday passes. They call again.

“We’re waiting on the shipper to pay us first, should be cleared by next week.”

Next week comes. More calls.

“There’s a documentation issue we’re working through, we’ll get it sorted out.”

The excuses continue. The payment never comes. Eventually, the phone stops getting answered. Emails bounce. The company has effectively ghosted them.

Step 7: The math of theft

Let’s add it up:

• Shipper paid Blue Joker: $2,500

• Blue Joker agreed to pay Reliable Transport: $1,700

• Blue Joker actually paid Reliable Transport: $0

• Gevorgyan’s operation stole from carrier: $1,700

• Total theft per load: $1,700 to $2,500 depending on whether they kept the full amount or just the margin

Now multiply that by hundreds of loads. Maybe thousands. Across nine different company names. Over months or potentially years of operation.

Conservative estimate: If each of the nine companies processed just 100 loads at an average theft of $2,000 per load, that’s $1.8 million stolen. If they were more prolific, say 500 loads each over the life of the operation, you’re looking at $9 million. And those numbers might be low.

Step 8: The carrier damage cascade

For Reliable Transport, that unpaid $1,700 isn’t just a loss on paper, it’s a liquidity crisis:

• They already paid for the fuel to haul the load (roughly $400-500)

• They paid their driver for the run (another $400-600)

• They’ve got ongoing fixed costs: truck payments, insurance, maintenance

• They were counting on that $1,700 to cover expenses and take the next load

One unpaid load strains their cash flow. Two or three? They can’t make payroll. They can’t pay their fuel card bill. Their credit gets declined. They can’t take new loads because they don’t have money for fuel. Their driver quits because the paycheck bounced.

For a small carrier operating on 3-5% profit margins, a few unpaid loads can mean bankruptcy. And they did nothing wrong, they verified the USDOT number, checked the registration, delivered professionally, and still got destroyed because the system they trusted to vet carriers failed completely.

THE VICTIM PROFILE

Understanding who got hurt and why they were vulnerable is critical to understanding how the fraud worked at scale.

Primary victims: Small carriers and owner-operators

The carriers Gevorgyan’s operation allegedly targeted weren’t big fleets with legal departments and credit analysts. They were:

• Owner-operators running one or two trucks

• Small family trucking companies with 3-10 trucks

• Regional carriers trying to fill backhaul capacity

• New entrants to the industry without established broker relationships

These carriers are vulnerable because:

• Most small trucking companies operate on 3-7% net profit margins. A single unpaid $2,000 load can wipe out the profit from ten successful runs. Multiple unpaid loads create existential financial crisis.

• Cash flow dependency: Unlike large carriers with lines of credit and financial reserves, small operators live week-to-week or day-to-day. They take a load, get paid, use that money for fuel for the next load. Break that cycle with an unpaid invoice, and the whole operation seizes up.

• They don’t have credit departments running comprehensive background checks on every broker. They rely on quick verification, check the USDOT number, confirm it’s active, maybe Google the company name, and make a decision. Sophisticated fraud that creates convincing legitimacy markers sails right through this basic vetting.

• When you’ve got a truck and a driver sitting idle, you’re hemorrhaging money. Fixed costs don’t stop, insurance, truck payments, driver wages. So when a load is offered at a marginal but acceptable rate, the pressure to take it is enormous, even if something feels slightly off.

• Unlike shippers who might use escrow or factoring services, carriers typically invoice and wait for payment, net 15, net 30, sometimes longer. By the time they realize they’re not getting paid, the fraudulent broker has already processed dozens more loads with other victims.

Secondary victims: Shippers

While carriers bore the direct financial loss, shippers were victims too:

• They paid “broker rates”, typically 15-30% above direct carrier rates, believing they were getting professional brokerage services: carrier vetting, insurance verification, logistics coordination, claims handling. Instead, they got fraud.

• If something had gone wrong with the freight, damage, loss, delay, contamination, there would have been no real insurance to claim against, no bond to collect from, no assets to pursue. They got lucky that the legitimate carriers Gevorgyan sub-contracted to were professional and competent.

• Had Gevorgyan’s operation been disrupted mid-shipment, authorities seizing assets, bank accounts frozen, operations shut down, shippers could have lost visibility and control of their freight with no clear path to recovery.

Tertiary victims: The industry

Every successful fraud erodes trust across the entire freight ecosystem:

• Every time a fraud case hits the news, shippers and carriers become more suspicious of all brokers, making it harder for honest companies to establish new relationships.

• More verification, more vetting, more payment protection mechanisms, all of it slows down freight matching and increases costs for everyone.

• When fraud is common, establishing credibility as a new broker or carrier becomes exponentially harder, creating barriers to entry that protect incumbents but stifle innovation and competition.

• Each major fraud case typically triggers regulatory responses, more rules, more paperwork, more compliance costs, that burden legitimate operators while criminals simply ignore or circumvent.

THE INVESTIGATION

The criminal charges against Gevorgyan represent the culmination of what was clearly an extensive, complex, multi-agency investigation. Understanding how that investigation likely unfolded helps explain both why it took so long and why prosecution of this type of fraud is so resource-intensive.

The multi-agency task force:

The DOT-OIG press release announcing the charges listed an extraordinary coalition of federal agencies:

• DOT Office of Inspector General: Lead agency for motor carrier fraud

• Homeland Security Investigations (HSI): Transnational criminal organizations, money laundering

• IRS Criminal Investigation: Tax evasion, financial crimes

• U.S. Postal Inspection Service: Mail fraud (false documents sent via USPS)

• Diplomatic Security Service: Passport/visa fraud, international operations

• Social Security Administration OIG: SSN misuse, identity theft

• Department of Labor OIG: Worker misclassification, wage violations

• Health and Human Services OIG: Healthcare fraud angles

Total estimated timeline: 3-4 years from first complaints to criminal charges.

During those 3-4 years, Gevorgyan’s operation was potentially still running, still defrauding carriers, still stealing freight payments. That’s the fundamental problem with freight fraud enforcement, by the time the regulatory and investigative apparatus catches up, the damage is already done.

THE SYSTEMIC FAILURES

Gevorgyan’s operation didn’t succeed despite the regulatory system, it succeeded because of it. Every vulnerability we’ve discussed throughout this 30-day series is on full display in this case.

FMCSA’s MCSA-1 registration process is honor-based. It assumes applicants are truthful because independently verifying every claim would require resources the agency doesn’t have. There’s no:

• Physical verification of listed business addresses

• In-person interviews with stated officers or owners

• Proof required that trucks, drivers, or operational capacity actually exist

• Systematic cross-referencing of data across applications to flag suspicious patterns

• Enhanced scrutiny for foreign-controlled entities

Gevorgyan allegedly filed false forms claiming U.S. control and domestic operations. Those forms were processed and approved. Nine times. That’s not FMCSA incompetence, that’s FMCSA operating exactly as designed, with limited verification capability.

Brokers need a $75,000 bond. Motor carriers don’t. So if you register as a motor carrier, you skip the bond entirely. Then you can immediately start brokering loads, double-brokering, which is prohibited, but unless someone catches you in real-time, you’re operating without the financial protection the bond is meant to provide.

Gevorgyan’s Subject Companies appear to have registered as motor carriers (claiming they would haul freight themselves) and then allegedly immediately started brokering. By the time anyone noticed, they’d already stolen millions and the lack of a bond meant victims had no recovery mechanism.

FMCSA has roughly 1,000 employees total to police nearly a million active motor carrier authorities across a country of 330 million people. The math doesn’t work.

The New Entrant Safety Assurance Program is supposed to catch bad actors early through enhanced monitoring during the first 18 months. But there aren’t enough investigators to audit everyone, audits can be delayed until late in the 18-month window, and sophisticated fraud can fly under radar until complaints accumulate.

Gevorgyan’s nine companies likely entered the system at different times, spreading the red flags across months or years. Each individual company might not have generated enough complaints during its new entrant period to trigger immediate investigation. By the time investigators connected them as part of a coordinated fraud network, the damage was done.

Once operations go offshore, enforcement becomes exponentially harder:

• Subpoenas to foreign entities require diplomatic process

• Physical raids require host country cooperation

• Evidence gathering crosses legal systems with different standards

• Arrests require extradition treaties and political will

• Money tracing through international banking is complex and time-consuming

Gevorgyan’s Armenian call centers put the operational command structure beyond easy reach. Even after investigators identified the international connection, building a prosecutable case required years of work coordinating across agencies and countries.

Motor carrier enforcement happens through fifty different state systems, each with different:

• Funding levels and investigative capacity

• Enforcement priorities and political leadership

• Data systems and information sharing capabilities

• Penalty structures and prosecution standards

• Coordination with federal partners

A fraudulent operation can exploit this fragmentation by operating across state lines faster than enforcement can coordinate. Complaints filed in Pennsylvania might not be visible to investigators in Georgia. Red flags in one state don’t automatically trigger scrutiny in another.

Gevorgyan’s operation allegedly moved freight across multiple states, spreading the victim pool and fragmentation detection efforts.

Most defrauded carriers never formally report to FMCSA or law enforcement. They:

• Complain directly to the company that didn’t pay them (which ignores them)

• Write it off as bad debt and move on

• Don’t realize they’re victims of organized fraud rather than just a deadbeat broker

• Don’t know there’s a central reporting mechanism for motor carrier fraud

So complaints don’t accumulate in centralized databases where patterns could be detected. Each victim thinks they’re dealing with an isolated incident. Only when investigators start connecting dots across multiple complaints does the organized fraud pattern emerge, and by then, months or years have passed.

Freight fraud today is sophisticated, using digital communication, electronic payments, online load boards, and international coordination. Enforcement tools remain largely analog:

• Manual review of registration applications

• Physical audits of carrier facilities

• Phone interviews and document verification

• Complaint-driven investigation rather than proactive pattern detection

There’s no AI analyzing registration patterns to flag suspicious commonalities. No blockchain tracking loads to prevent double-brokering. No real-time payment verification systems. No automated cross-referencing of phone numbers, emails, and addresses across applications.

Fraudsters use 21st-century technology while regulators largely rely on 20th-century methods.

WHAT NEEDS TO CHANGE (AND WHY IT WON’T)

The fixes for freight fraud are obvious. They’ve been obvious for years. They remain unimplemented because they’re expensive, politically difficult, and opposed by interests that profit from the status quo.

What should happen:

• Require physical verification of business addresses (not virtual offices)

• Implement video verification calls with stated owners/officers

• Cross-reference phone numbers, emails, addresses across all applications

• Flag multiple applications with suspicious commonalities

• Enhanced scrutiny for foreign-controlled entities

• Require proof of actual operational capacity before granting authority

• Mandatory site inspections for all new entrants within 90 days

Why it won’t happen:

• Costs money FMCSA doesn’t have

• Slows down registration process

• Creates bureaucratic burden the industry will lobby against

• Requires technology investment and staff expansion

• Political resistance to “regulatory overreach”

Broker bond reform:

What should happen:

• Increase bond from $75,000 to $250,000-$500,000

• Scale bond requirements based on freight volume

• Eliminate the motor carrier loophole (require bonds for anyone brokering)

• Create centralized bond claim process so victims can actually collect

• Require bonding companies to pay claims within 60 days

Why it won’t happen:

• Brokers will fight it as unfair barrier to entry

• Benefits large established brokers over small startups

• Bonding companies will lobby against increased exposure

• Industry argues it will reduce competition and increase costs

• Political resistance to “killing small businesses”

Enforcement staffing:

What should happen:

• Triple FMCSA’s investigative capacity

• Hire 500+ additional safety investigators and fraud specialists

• Fund state enforcement consistently across all fifty states

• Create rapid-response fraud investigation units

• Establish real-time monitoring of new entrants

• Mandatory audits of all new entrants within 6 months (not 18)

Why it won’t happen:

• Requires congressional appropriations

• Trucking enforcement doesn’t win elections

• Competing budget priorities

• Anti-government-spending political environment

• Industry lobbying against increased enforcement presence

Technology solutions:

What should happen:

• AI-powered pattern recognition across registration applications

• Blockchain-based load tracking to prevent double-brokering

• Real-time payment verification before freight release

• Automated cross-referencing of all registration data

• Central fraud reporting database with public access

• Integration with international law enforcement databases

Why it won’t happen:

• Massive upfront investment required

• Technology procurement in government is slow and difficult

• Industry fragmentation makes standardization hard

• Privacy concerns about data sharing

• Companies consider load/payment data proprietary

International cooperation:

What should happen:

• Strengthen extradition treaties with high-risk countries

• Real-time information sharing with foreign law enforcement

• Require enhanced disclosure for any foreign ownership or control

• Block registration from known fraud jurisdictions without extensive vetting

• International task forces focused on transnational freight fraud

Why it won’t happen:

• Diplomatic heavy lifting across multiple agencies and countries

• Competing foreign policy priorities

• Some countries won’t cooperate

• Political sensitivity around immigration and foreign business

• Resource-intensive with uncertain results

The fundamental problem:

Every proposed solution costs money, creates friction, slows down commerce, or faces political opposition. Meanwhile:

• The industry that gets victimized also lobbies against regulation

• Shippers want cheap, fast freight and don’t want to pay for security

• Brokers want low barriers to entry so they can start businesses easily

• Carriers want quick payment without verification delays

• Politicians don’t get votes for funding FMCSA enforcement

• The public doesn’t understand freight fraud or care until a crash kills someone

TWIC cards should be required for every person operating in the transportation industry at the owner, management, and frontline operator level. PIN ID cards tied to fingerprints with clear identities and backgrounds. So the loopholes remain open. The enforcement remains underfunded. Say you’re pulling equipment from a port or need access to a sea, rail or air port, that TWIC and SCAC tie your access and equipment interchanges to you for accountability. Why aren’t we doing this in our industry?

The technology remains outdated. International cooperation remains inconsistent, and the fraud persists.

THE SYSTEM WE’VE CHOSEN

Serj Gevorgyan allegedly created nine fake motor carrier companies, ran them from call centers in Armenia, filed fraudulent registration documents with false U.S. addresses and sham ownership, systematically double-brokered hundreds or thousands of loads, stole millions of dollars from legitimate carriers, and operated for years before federal investigators built a case strong enough to file criminal charges.

He’s now facing decades in federal prison on conspiracy, fraud, and false statement charges, assuming he can be extradited from Armenia, which is far from certain. Gevorgyan didn’t break the system. He just understood it better than most people.

He understood that FMCSA registration is honor-based and lightly verified. He understood that the broker bond could be bypassed by registering as a motor carrier. He understood that enforcement is overwhelmed and under-resourced. He understood that operating from overseas creates jurisdictional insulation. He understood that spreading fraud across multiple entities delays pattern detection. He understood that most victims never formally report. He understood that the 18-month new entrant window is too long and too lightly monitored.

Most importantly, he understood the fundamental math: for a few thousand dollars in startup costs and the willingness to lie on government forms, you can access millions of dollars worth of freight with relatively low risk of prosecution and almost zero chance of actual punishment if you operate from overseas.

That math works for criminals. It doesn’t work for the legitimate carriers who got destroyed, the shippers who paid inflated rates for fraudulent service, or the American public that shares highways with vehicles operating outside effective regulatory oversight.

After thirty days examining case after case of systematic fraud in the U.S. trucking and freight brokerage system, dirty CDL examiners, corrupt enforcement, fraudulent medical certifications, shell companies, international operations, double-brokering schemes, safety violations, and billions in theft, one truth is inescapable:

This isn’t a broken system that needs fixing. This IS the system, working exactly as designed.

It’s designed to prioritize access over accountability, speed over security, and industry convenience over public protection. It’s designed with enforcement so underfunded and fragmented that widespread fraud is mathematically inevitable. It’s designed with loopholes so obvious that even the most sophisticated criminals can easily exploit them, and it’s designed this way because there is no political will to fix it. The money to fund proper enforcement isn’t appropriated. The regulations to close loopholes aren’t passed. The international cooperation to prosecute offshore fraud isn’t prioritized. The technology to detect patterns isn’t implemented.

Every single day we don’t fix these known vulnerabilities is a choice. We’re choosing to let freight fraud continue. We’re choosing to let legitimate carriers get destroyed. We’re allowing criminals to operate with impunity. We’re allowing unsafe vehicles and unqualified drivers to operate without effective oversight.

The Gevorgyan case will probably end with a conviction, assuming extradition happens. It won’t end with victims getting their money back. It won’t end with systematic reforms that prevent the next fraud network. It won’t end with adequate enforcement funding or closed loopholes or international cooperation that actually works.

It’ll end with another headline, another DOT-OIG press release, another article like this explaining how it happened again, and another round of hand-wringing about fraud in trucking that leads to exactly zero structural changes, because the freight system we have isn’t the system that failed. It’s the system we’ve chosen. And until the political will exists to choose differently, to fund enforcement properly, close obvious loopholes, implement modern technology, and prioritize safety and accountability over industry convenience, the fraud will continue.

Gevorgyan allegedly stole millions. But the real theft is what we’ve stolen from ourselves: the regulatory protection that could prevent this, the enforcement capacity that could stop it, and the political courage to demand better.

The system works for criminals. It doesn’t work for everyone else, and that’s exactly how we’ve built it.