Authored by John Paul Hampstead via FreightWaves.com,
Joseph Lipsey III, CEO of Chattanooga-based transportation companies Lipsey Logistics and Lipsey Trucking, was arrested on Tuesday in Aspen, CO, for distribution of cocaine to a minor, three counts of serving alcohol to a minor, possession of drug paraphernalia, and providing nicotine to minors. Lipsey’s wife Shira and son, Joseph Lipsey IV, were arrested Monday on similar counts.
Under Colorado law, if convicted of the distribution charge, the Lipsey parents would each face a mandatory sentence of between eight and 32 years in prison.
The Lipseys were each released on $100,000 cash-only bonds. In January, Joseph Lipsey IV was charged with two counts of vehicular assault after a Tesla SUV he was alleged to have been driving careened off the road, injuring himself and four other teens in the car.
The Lipseys saw an opportunity in freight brokerage when the second Bush administration began privatizing and outsourcing disaster relief, where previously the federal government had leaned on the military.
A small water company in the family’s portfolio helped the Lipseys secure an award to provide bottled water for hurricane relief.
In 2003, Lipsey had engaged UPS for Federal Emergency Management Agency (FEMA) logistics and transportation support for disaster relief, but almost immediately Hurricane Isabel hit the global logistics conglomerate realized that the task of providing disaster relief logistics was more realistic with an asset-based truckload provider than through independent brokerage capacity. UPS handed over the business to US Xpress, which managed relief logistics on behalf of Lipsey.
Joe Lipsey soon realized that there was a lot of money to be made in using brokerage capacity and by the 2005 hurricane season, the Lipseys had launched their own brokerage to move water and ice on a cost-plus basis for the government.
Lipsey Logistics has been investigated on numerous occasions for failure to comply with federal rules around deadlines, botched paperwork, and according to a government investigation, in billing more than $800,000 in unsupported Federal payments.
On September 5, 2017, Lipsey Water was awarded a $143 million FEMA contract to provide bottled water. As of October 2017, Bloomberg reported that Lipsey won at least $215 million in FEMA relief services since Hurricane Harvey.
“Lipsey Logistics’ sister company, Lipsey Water, has numerous State and Federal emergency contracts providing Disaster Relief Services to communities affected by disasters, both natural and manmade. While working with thousands of carriers for FEMA relief, …read more