Pilot Flying J agrees to $92 million criminal settlement in fraudulent fuel rebate case

| July 14, 2014

pilotPilot Flying J has entered into an agreement with the U.S. Justice Department to resolve the criminal investigation into the company’s fraudulent rebate withholding scheme, agreeing to pay a $92 million fine and full restitution to companies victimized in the scam.

The $92 million penalty is in addition to the $85 million civil settlement the company agreed to in November, in which the company signed off to pay 5,500 trucking companies the money it withheld from them in fuel rebates along with 6 percent interest, attorney’s fees and court costs.

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Pilot’s scheme came to light in April 2013, after its Knoxville, Tenn., headquarters were raided by agents from the FBI and IRS. A federal affidavit was released days after the raid detailing the accusations against the company, saying it had withheld millions of dollars from trucking company customers in a nearly decade-long period.

Pilot said the settlement also prevents the company from being prosecuted, but the Justice Department says the settlement does not prevent the prosecution of individuals.

“We, as a company, look forward to putting this whole unfortunate episode behind us, continuing our efforts to rectify the damage done, regaining our customers’ trust, and getting on with our business,” said CEO Jimmy Haslam.  “We’ve been committed from the beginning of this to doing the right thing, and that remains our commitment.”

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The Justice Department says Pilot “confirmed” its fraudulent scheme “was prevalent within its direct sales group and carried out with the knowledge and participation of employees responsible for the operation and oversight of” the sales division.

The truck stop chain and fuel provider also confirmed to investigators the two key methods it used to defraud customers: By reducing the amount it paid to carriers in monthly rebate checks or by reducing the off-invoice discounts of targeted customers.

The affidavit released in April 2013 accused the company of targeting certain customers it deemed too unsophisticated to discover the scheme.

Pilot says its agreement is “neither an indictment or finding of guilt,” according to a press release, and its agreement explicitly states the company will not be prosecuted, it says.

Per the agreement, Pilot must also give regular reports to the Justice Department about its internal compliance program and the measures it’s taking to prevent the scheme from reoccurring.

  • doug

    trying understand their thinking they could get away with the scam in the first place. I also believe they should loose their licence too operate. they are no different then the independent fuel stops out there.

  • Douglas

    So they have to pay a fine to the government of $92 million besides the the company’s they defrauded? It sure didn’t cost the government that much money to bring them to trial. So this money will go into a slush fund for our corrupt government to bribe with? Except for direct court cost the rest of the money should go into the highway fund to replace a section of our poor highways.

  • Glenn H

    I find it hard to believe that Jimmy didn’t know this was going on, heck hes the owner of the company! They were taking millions on this scam, how could have not known? and I think we have not heard the last of this story, people still have to have their day in Federal Court and I am sure many of them will have plenty to say about what really went on behind closed doors. I feel sorry for the little people who will pay the most in this deal, with their freedom!

  • Bentoverbypilot

    Jimmy your salesman sat in my office after the sales meeting you claim to have not attended and gave details about what you wanted to do with the team. Guess what, the details came true. I contend that you were there and 92 mil says the Feds think so also. I don’t think they had enough to prove it. What is that saying about a duck. Looks like, sounds like, probably is a duck….

  • Railroad

    Where’s the list of the 5,500 companies Pilot has to re-pay?

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  • Mark Hayward

    The only Crooks bigger than Pilot are the Federal Government. $92 Million that is better than any Maria Scheme. I agree with Douglas the money should go directly into Highway funds.. not what ever else the Government wastes money on.. The way things are going it will probably go to house and feed Illegal immigrants.

  • Mark Hayward

    From what I just read they are paying the fine instead of admitting any guilt. It’s a white Collar Crime we have so many in Prison maybe it’s time to put only dangerous criminals in Prison? Of course paying back all of the Customers they cheated is the same as admitting guilt in the first place.

  • George

    So, what about the owner operators and lease operators out there? These hard working men and women deserve a cut of this $92 mil.

  • tom williams

    George sorry to say but I’m in the same boat as you i won’t see one red cent from this law suit ! But bet your ass the irs will be holding out there hand wanting Demanding that i pay my un constitutional Taxes,,, Tom Williams Wichita,Ks.

  • KW

    I’m a small company with 4 trucks. Will I get my money back?

  • J Smith

    I wonder who’s gonna stay on the companies to pay owner operator’s.

  • js

    Kw why would you be getting money back? Did you get fleet discounts on fuel?

  • guest

    Yes…Pilot and Jimmy Haslam and his Governor brother did CHEAT and STEAL from Truck Drivers…..now they want to “just forget this unfortunate mess”????? These are only a FEW of the RICH MEN who prey on hard working truckers……they have no SHAME and are criminals….lots of brokers, Shippers, Trucking EXECS are identical to these CROOKS. lol

  • guest

    Absolutely NO DOUBT…he is a CROOK and probably devised the scheme himself. lol

  • guest

    He is certainly NOT the Only total PRICK that is busy STEALING from Truckers everywhere….BEWARE….everywhere you go a Crook awaits to RIP YOU OFF…..more “good neighbors”……lol

  • Mark Hayward

    How much fuel did you have to purchase before you could get a discount? Maybe one truck operations don’t use enough fuel to get a discount. I really don’t know what volume you had to purchase for a rebate?

  • terry morsett

    Really, they are still ripping us off! By fining them and not putting them in jail does nothing! One of the major strategies in business is when you have a large increase in monetary out flow, you pass the expense on to the customer. Around here, Omaha NE, Flying J and Pilot are .25-.32 cents higher than the local stations, SAMS, CASEYS, and other quick stops. And .06-.15 cents higher than the local truck stops, SAPPS, SHOEMAKERS, CENEX. It’s not hard to figure we are paying that fine! If you can remember, they used to be very competitive until this mess. I refuse to stop at their truck stops anymore. If they can do this to the big fleets, what are they doing to the little guys like me?

  • Jr

    How dumb are truck drivers knowing that this company is corupt and are cheaters, keep buying fuel from them? The day I saw that the storages tanks at the pilot of Mariana, FL were painted black, in order to attract more heat and sell hot fuel, was the day when I decided that I would not buy another gallon from these greedy cheats! The only ones to blame, are yourselves for your continued support by purchasing fuel from them!

  • david

    I’d like to know this also the company I’m leased to supposedly had a rebate program we never got our rebates ,until several of us threaten to quit we know have a rebate program but where Is our money from before

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