Pilot Flying J engaged in years of rebate fraud, feds say

| April 18, 2013

pilotFederal documents released April 18 allege that Pilot Flying J has been engaged for years in a fraudulent scheme of withholding rebates owed to customers on fuel purchases.

The documents further allege that Pilot Flying J CEO Jimmy Haslam — the majority owner of the Cleveland Browns — knew about the scheme.

A statement from Haslam did not directly dispute the affidavit, but said “any willful wrongdoing by any employee of this company at any time is intolerable.”

The affidavit says that the company and certain Pilot Flying J salespersons withheld the rebates in order to receive larger commissions on fuel sales and increase PFJ profits.

PFJ affidavitAccording to the affidavit, some customers didn’t receive tens of thousands of dollars a month in rebates, and during the years the fraud allegedly occurred, tens of millions of dollars owed to customers went unpaid.

The company’s headquarters were raided on Monday by dozens of agents from the FBI and from the IRS — all said to be connected to the company’s fuel rebate program.

Linked to the right — and here — is the full 120-page document released by a federal court, which say that Haslam was in on meetings in which the tactics of charging certain clients higher than agreed upon prices, concealing that information and then pocketing extra money were discussed.

Much of the affidavit includes conversations between an informant (a Pilot employee the FBI refers to in the affidavit as Confidential Human Source) and Pilot Flying J salespeople, where some of the more blatant knowledge of fraud appears to be exposed.

A few highlights from the affidavit include one carrier realizing they were owed $1 million in rebates, a salesperson telling the informant that his scheme was costing another carrier $70,000-$90,000 a month and even another carrier being shorted $146,564 over a 7-year period.

Haslam’s statement was released after the affidavit was made public. Here it is in its entirety:

“I’ve read the affidavits.  I now understand more clearly the questions the federal investigators are exploring.

I maintain that the foundation of this company is built on its integrity and that any willful wrongdoing by any employee of this company at any time is intolerable.

We will continue to cooperate with the federal investigation and continue our own investigation in these allegations.

I value the relationships we have with our customers, our vendors and our team members across this country and regret that they have to go through this with us, but I trust and believe their faith in this company and its principles has never been misplaced.”

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  • http://www.facebook.com/james.deboard.98 James Deboard

    This is not a big shock. Just about every segment of the trucking industry is crooked. Owner Operators have been screwed for years when it comes to companies that say they are paying 100% on fuel surcharge. They all lie about it and keep mot of the fuel surcharge. Do they report this to the IRS as taxable income??? I doubt it so if Pilot/Flying J is guilty of doing this then the trucking companies are getting a taste of there own medicine. When will the federal government start raiding trucking companies for there undisclosed income from keeping the fuels surcharge. Pilot Flying J will get there due punishment…

  • Diesel Dog

    I think we (as the trucking community) should do whats Right to Pilot. Boycott them, Dont buy into their BS, and watch their scamming company go down the tubes just like their crappy football team…

  • Gambler

    Hopefully they will lock the bastard up for years, but I am sure he will get off to screw some more truckers in the future. I haven’t traded with either one in years because of their high prices at the pump.

  • gary d

    pride is before a fall.you can see through the owners comments, just follow the money…..

  • http://www.facebook.com/ken.nilsen Ken Nilsen

    Typical billy big rigger, all accusation and no proof.

  • http://twitter.com/tad2155 tad2155

    not all of us are that way i give all my o/o’s their fsc
    but we are a small carrier

  • Joshua G

    It’s about time they uncover their stupid shit. Yeah I have boycotted them, I fuel @ Mom & Pops, myself. We most definately need to start sticking together and Stand up for ourselves !
    I have lost 500k since December do to their vigurous regs and watch Dogs that report false information on the web. I have been relutant to get OOIDA to call me back on this situation. but I have found that the FMCSA is in a lawsuit thru overdrive about all of the CSA. Look at overdrive.com for full details.
    We need to stand up !
    Currently looking for partners…

  • Ron

    As an O/O I’ve noticed that over the last 10 to 15 years Pilot has gotten mighty large in a short span of time. Williams went large quickly and we see what happened to those guys. Does anyone remember Imron? Of course Pilot bought out williams and became even larger. Then, pilot profited from the sudden turn in oil prices when Flying J got caught up on the down side of that mess. It seems to me that the beginning of Pilot’s fall from grace began when they started charging for coffee. I’m sure a few old timers like myself remember when a man could walk into any truck stop and get a free cup of coffee not to mention a free meal. It seems Pilot has done all they can to nickel and dime the trucker for so long that this business practice is pervasive in that company. For this reason I don’t buy fuel at Pilot. I will however piss on their parking lot.

  • gary d

    i wanna know who the russian mafia guy is on page 52 section 66 of the afadavit. he had some balls…. to read the afadavit in its entirety is like a hollywood movie…

  • bigred

    Ken,,,,who the hell are you, not a driver,,get the hell out here you piece of crap,,,

  • John Scott

    Well, it does not surprise me. I am sure a lot of big companies who got ripped off from basically kick backs but call them “rebates” if you must. Probably complained to the feds enough to warrant the investigation.

  • Bill

    I think it’s funny how some guys think they are talking about the reward points….. FYI they are talking about fuel discounts given to large trucking companies as incentive to buy fuel from them.

  • http://www.facebook.com/william.mckelvie William McKelvie

    Well maybe now the big companies will lose this advantage and can no longer operate for what guys like me pay for fuel!! Boycott PILOT!!

  • http://twitter.com/michaelstruckin michael bechara

    to be quite honest i think we the truckers should all have to pay the same for fuel weather you are one truck or 10,0000 trucks . keep it fare this kick back shit gotta stop . and whats funny is the most trucks out there is the owner operators if anyone needs a rebate it’s us . so a simple sulation would be to stop buying fuel at pilot and flying j for a month and let them beg for our forgiveness by giving us the rebates.

  • http://www.facebook.com/dave.nichols.75 Dave Nichols

    where i lease we get hit with a 6% charge (6% of the fsc) for “administrating it. haha

  • http://www.facebook.com/james.rogers.104855 James Rogers

    They need to check into them charging o/o .06 a gal for using a credit or debit card for fuel but when I pull up in my rv and use the same card I don’t have to pay the .o6 more just another rip off

  • ghostrider

    I’m no longer a driver, After being in it for 33 years “I QUIT” because of all the B/S like drug testing (hair. I will not give my DNA to no one) The new EOBR that I love and HATE, The Police and DOT officers and there is more but I will rest it. Oh one more thing the new breed of dum a** drivers. michael bechara I don’t here to many drivers that post a commet on here that makes any since, But you my friend hit it out of the ball park. That is all it would take for most all of the drivers ( company and I/C and O/O) to stop for one month. This would do more then make Pilot beg you would see after the first week watch the fule price’s drop so fast, free coffee come back ect ect…….

  • MIND GAMES

    Ron I do not blame them for charging for everything it takes money to clean up after the huge pigs who drives trucks. Just the other day I saw a man pour a gallon of piss right out the window of his truck right next ro my truck in the Dallas fly n J in broad daylight! I called his company they refused to pick up the
    phone and even have pictures of him doing it.
    We including trucking company owners are our worst enemy not the truck stops!
    The managers are not dumping piss and s**t bags on the ground the drivers are and I have a picture of a driver who dumped a bag of empty bottles in the T/A too.
    People if you see something say something if you don’t then it is you who are e problem not the truck stop.
    Remeber the holes that gay drivers used to drill in the restrooms?
    Only in our industry does this garbage take place!!! 
    No where else!!!

  • MIND GAMES

    Ken I don’t thing the FBI and IRS is your typical Billy Big Rigger as you so kindly put it. If they owe then they should pay only the people they owe not a cent more! Nobody owes any of us anything that includes a free shower that is and should be your boss man’s issue not the fault of the truck stops. If we had to pay true cost for everything you would get true pay for everything and rate cutting would be a thing of the past.

  • MIND GAMES

    Ron I missed the last part of your message I just want you to know we all have cameras I plan to install many all over my truck running full time and I don’t have a problem handing any evidence over to the police.
    The cost about $100.00 I’d think twice if I were you I’m not the only one I have plenty of freinds who are doing it right now.

  • Wynn

    I retired after 42 years as O/O and let me tell you this crap has been going on for a long time. I sent my Senator e-mails complaining of this 10 years ago and all I got back was they would check into it. In case any of you are interested only 9% of the trucks on the road are O/O’s and they get the worst screwing of anyone.The big companies are complaining O/O’s trucks run to fast so it’s hard for them to compete,what a joke!! Do you remember CF and how Jerry Detter and his father-in-law lied about the stock of CF and they went bankrupt,but they never once were charged with a crime.No wonder things are what they are everyone is corrupt! There is one more point,do you think all these foreigners are here by mistake and are in the trucking business? There is a lot of dirt in the milk but the honest person doesn’t stand a chance against the likes of the Koch brothers and corrupt congressmen!!

  • Trucker8

    We have quit stopping at Pilot long ago. The small O/O does not get this huge rebate. That is partly why big companies can undercut O/O. We have brokers that do not give us all of the fuel surcharge, brokers wanting to pay less than they did when fuel was less than $2 a gallon, and we also have to pay the illegal charge of unloading and loading at some places. Trucking is THE BIGGEST business in America—nothing happens without being touched by it–yet all the “big” minds in power do is come up with more ways to make it more difficult. And how does it get overlooked that someone owes you a million dollars? If this has been going on for years, does that mean Governor Haslam was or is involved?

  • Dan

    THIS IS AMAZING!!!.. It is time as an o/o to find and attorney and get on this band wagon. Any lawsuit probably ends up as a class action. My hope is it could hurt Pilot bad enough that the rest of the thieves bring back fair fuel pricing to o/o and small fleets. It might be the only way to compete in the future. Cost minus 3 cents WHAT THE HELL.

  • http://www.facebook.com/vaughn.canter Vaughn Canter

    does that mean we have to stick together,good luck with that.ha.ha

  • http://www.facebook.com/vaughn.canter Vaughn Canter

    that would not work,the big trucking companys tell u where to fuel,the driver is to stupid to figure it out his self.

  • http://www.facebook.com/roger.rommelfaenger Roger Rommelfaenger Rmachobbie

    I figured Pilot would do something like that, After the way They Stold Flying J ans well as alot of the other Truckstops they Aquired, I sure am Glad I stoped Buying anything from that Thief.

  • No Reform

    The BROTHER Gov. Haslam is probably up to his NECK in his OWN criminal actvites…maybe dint have time to HELP OUT with the PILOT SCAM???? It Run inthe Family no doubt!!!! CRIMINALS……

  • No Reform

    SO TRUE…corrupt is a way of life in trucking.

  • http://www.facebook.com/john.forker.79 John Forker

    sounds like we need to boycott this crook and put him out of business

  • AL

    Also an O/O with five trucks, and have seen my rebate go from $70/80 a month to 3 or $4.00. Some times go six months without one. It won’t make or break me, but fair is fair. If your going to give a rebate, than give one. Don’t pick and choose who gets it and who your going to short change. And whats the deal with having two different rewards cards??

  • Hans Witt

    Looks like they are using the same accounting methods the government uses! I wander how many of the ” customers were all “owner operator” outfits that could care less if the rebate was handed down? I actually leased once, to a trucking company out of Fargo, for 6 weeks. They have a lot of red Macks, but I won’t mention their name. This company claimed they got cash price and rebates with their fuel card. How ever I was always charged credit price, and never seen a rebate. it was just one of the many things that contributed to the .50 cent a mile difference from what I actually made verses what they promised!

    I think that some companies find it easier to run on share holder money, and squeeze the margin out of leasers. I just find it funny, that the complaints come from Pilot employs, not the companies that being screwed.

  • Nick

    Back in the day before Pilot took over FLYING J it used to be a great place to stop and fuel, and you could be assured of quality fuel at a competitive price . I have a super old frequent fueler card, its so old its got 7 zeros before the numbers start. Not anymore they rip you on prices I avoid fueling at them as much as possible now. They have authority to take money out of my bank account for my fuel bill. In December they sent me a threating e-mail that if I didn’t pay my bill immediately they were going to cut my credit off. They sent me an invoice and then failed to withdraw the money that was sitting there , like that’s my fault? They apologised and took their money then just last week I got another threating e-mail from them that my card would be cut off if I didn’t pay up. I haven’t fueled there on my card in quite some time and my last invoice was paid in full. I owe them Nothing ! I sent them a reply and got no response. I think I might beat them to the punch and call the bank and cut them off from the ability to withdraw funds from my bank account. It looks like they are a bunch of shysters.

  • martymarsh

    Ok Ken, what rock did you crawl out from under? Anything a driver says you are always knocking down, so it would be apparent to anyone that you are not a driver. What is also apparent, is you think anyone really cares what you think? Go back to truckers report or any other low life place you hang out at.

  • Jeanine

    My partner and I were running 12 trucks two years ago and now down to 4. I can agree with the ones talking about corruption in the transportation industry. “BIG” business is eating our lunch (breakfast and dinner) and we are left at the mercy of these companies because the federal government is in on it to! Oil companies, fuel stops, parts houses, steamship lines, intermodal equipment providers (who do not have much any regulation), brokers (don’t have to name any, do I?) and uncle sam. List goes on! I received a fuel bill from a local fuel company stating same type discounts for our gallons and saw a TAX called “FEDERAL OIL SPILL CLEAN UP TAX”. Really?? What are the taxes at the pump for (with already paying ridiculous fuel cost)or IFTA (including the states you pay taxes to 2 or 3 times on their own separate returns) road use tax, heavy weight tax, tolls, permits and so on?? Most of these cover the same allocations. I have to go now, I am pissed and sick to my stomach.

  • http://www.facebook.com/buddy.blanton.75 Buddy Blanton

    i agree with james rogers…and have experienced the same… only with the difference of a 80,000 lb truck and a diesel p/up…Pilot has been taking advantage of trucking by price gouging the industry for years now… i no longer fuel there

  • http://www.facebook.com/buddy.blanton.75 Buddy Blanton

    I have been in this industry since birth and am the third generation in it….My wife was a columnist ( article is called “From the Homefront” ) for “Landline” magazine a few years back…We own a company called Aegis Transportation. I am taking the time to type this because we have experienced the lack of the Pilot / Flying J truck stops appreciation to the industry and the legitimacy of the complaints about the Pilot / Flying J fuel centers…it is worth while for any trucking company, no matter how big or small, to check into these claims… Thanks for reading,,, Buddy Blanton, Aegis Transport

  • http://www.facebook.com/george.cochran1 George Cochran

    I’m looking for some more lead plaintiffs. Please call me asap at 330-607-2187 for confidential conversation. Thanks.

  • http://www.facebook.com/george.cochran1 George Cochran

    I’m looking for some more lead plaintiffs. Please call me asap at 330-607-2187 for confidential conversation. Thanks.

  • Shaun

    Anyone affected by this can call me at 949 290 4648. I can get you set up with the attorneys that will get you your money back plus some. I’m retired and essentially work with causes such as this. I’d be happy to help anyone. I’ll be closing the enrollees by noon pst tomorrow. You are owed money. We can’t allow things like this to continue to hurt the heart of america. The working class.

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