The former President of Pilot Flying J and seven other executives at the company have been indicted following an investigation by the FBI. To be fair, they did warn him.
All 8 executives have been charged with conspiracy to commit mail fraud and wire fraud in connection with the now famous fuel rebate scam perpetrated at Pilot Flying J. Mark Hazelwood, former President of PFJ, is facing an additional charge of witness tampering after he allegedly told some employees to mislead or refuse to cooperate with the federal investigators.
Hazelwood allegedly not only knew that the illegal scheme was going on, but was actually involved in training salespeople how to take advantage of customers. During the FBI investigation, he was recorded apparently counselling employees on which customers to target saying, “customer A, looks (at) every orifice. You have Customer B, who doesn’t even know you have an orifice.”
Already 10 former employees have pled guilty to charges related to the scam, following three former employees who received immunity for cooperating with the FBI investigation early on, which was started when a lone unnamed whistleblower approached federal officials.
Conspicuously absent from the list of indicted individuals is the CEO of the company, Jimmy Haslam, who is the owner of the Cleveland Browns and brother to Tennessee Governor Bill Haslam. Haslam continues to claim that he was not aware of the fuel rebate scheme that was being run. His absence from the list does not however mean that he’s in the clear. Some sources have mused that if Hazelwood takes a plea deal, that may put Haslam in the crosshairs.
The last round of indictments led to a wave of guilty pleas and promises to cooperate with investigators. This new round snatched up people higher up the chain than the last. Investigators haven’t shared yet whether they plan on targeting anyone else at the company for indictments.
The company allegedly defrauded trucking companies out of more than $56 million worth of fuel rebates and ended up paying $85 million to companies involved in a class action suit against them. They also paid $92 million to authorities and promised to help with the ongoing investigation.
Source: gobytrucknews, knoxnews, truckinginfo, fleetowner, northcoast, wcbe, ohio
Image Source: Depositphotos
BV says
Well at least something’s being done to punish these guys but I don’t believe for a minute Haslam didn’t know what was going on, he probably didn’t know the mechanics of the scam, but he was aware. I just hope the guys see some jail time I’m tired of the less fortunate guy going away let the so called “elite” get his salad tossed in jail.
Jim says
I don’t buy it, either. These so-called “patsies” are in it up to their necks and then when they get thrown under the bus they cry foul. Nice try, but you still have to suffer the consequences.
Helen says
You really need to read their blogs. The atrocious thing they say about commercial drivers. Then there is just how many owner operaters lost everything because of them. My husband and I refuse to but anything for these thieves.
Mike Danaher says
I agree.
R.B. Barnby says
I do not understand what the scam was all about?
Rocky says
Pilot was suppose to give everyone rebates based on the amount of fuel they paid for. They didn’t keep their word. A fraud; greed is never satisfied.
EZmule says
They promise to give $ back to the carriers for the fuel they buy. Like a frequent buyer program. Then they scam the carriers out of the $.
supertrucking101 says
Ex: if u spend $100 with my company, I will in return $15 to u at the end of the week/month whatever the agreement is..This wasn’t happening and trucking companies buy 1000’s of gallons of fuel per year…And their money/rebate wasn’t being given back as promised.
Bill says
All carriers have fuel networks with the major truck stop chains .The ddiscount changes daily so PFJ was tracking companies who don’t closely track their discounts and were shaving pennies on the dollar off the discount. This went on for years. Pennies doesn’t sound like much but in the end was worth 10s of millions to executives .I personally don’t think Halsam knew. He’s got tons of money already. Why risk it .This was greedy executives in the PFJ organization operating under his nose I think .
BV says
Yep, fractionalized denomination I believe it’s called. That is exactly how money is made in pennies not dollars. Also that is how high frequency trading is done on Wall Street & just one of the tools used in rigging the stock market…
Kelly says
Correct that pennies add up to dollars, etc. Wall Street doesn’t participate in HFT. These are boutique firms with quants that wrote algos to make incremental profits on a volume of transactions.
The size and volume that Wall Street, mutual funds, pensions, and endowments do when transacting is where the liquidity comes from for HFTs.
This doesn’t impact the retail investor as much as it would a retail daytrader. If your time horizon is weeks, months, or years it’s non existant. Use of limit orders to buy and sell gets you the price you want when ready, doesn’t matter what they do. The volume peaked in HFTs several years ago and now is around 49%.
I manage my own 401k, our two Roth IRAs, and I have a futures account for daytrading and short term swing trades. It’s like anything education about what you’re doing and start slow to build over time. There are so many resources available to help for little or no cost. Plus we have the advantage of being small and nimble with access to information that used to be exclusive to the so called experts. The experts who collect a fee whether they make you money or lose it, and the majority generate average returns.
ripp says
Agreed. 56 million is grocery money to Halsam. The top execs on the other hand…….motive motive motive.
EZmule says
I remember back in the 90s when drivers accused Flying J of selling heated fuel. I always thought that they were crooks. If the CEO is in on it; I hope that he goes down with them all.
Douglas Kirk says
Fuel is generally warm from the refinery. I don’t know of any body that would go to the trouble of heating it in an underground tank- that’s a potential bomb in the making
Cherokee says
Not necessarily. You have to remember that diesel is combustible not flammable and the tank vents prevent it from building up enoughp pressure. There was several fuel stops that had been charged with heating fuel by using electric heat wrap on their tanks. Their excuse was they didn’t want it to gel up. If the load was picked up from the refinery the temp would be elevated but not always the case it’s normal only at outside temp. Heat the fuel it expands we buy it drive down the road it cools down and we lose an 1/8 tank, big ripoff.
Joe Bartman says
He meant heating fuel, not heated lol
Max says
The fact that they are being charged with conspiracy to commit mail fraud and wire fraud, and the length of time they investigated these guys tells me the government has a very thin case and the FBI investigation turned up no hard evidence. Their indictment is a last resort catch all in federal cases.
This does not mean their innocent. I personally think they are guilty, but I’ll be a cup of coffee this whole matter never sees the court room and is settled with plea bargins. They will see very little if any jail time.
Charles says
Any email, fax or snail mail is a single count of mail fraud. So if they sent ANY OF THESE out with fraudulent info that pertains to fraud…it qualifies! Weak or not, I would assume the government has thousands of counts if other millions.
matthew brown says
They were made to reimburse Landstar ,for this scam, millions of dollars. Yet, Landstar never passed that money back to the drivers. The companies that got paid back just ended up screwing the dri ers/owner operators. Go figure. Rich man gets richer.
Anthony says
Well that means PFJ will probably go out of business which will be a boom for T/A-Petro.
EZmule says
How much PFJ has; even if they do go down for this; they’ll still be in business. Maybe many carriers will switch.
Rissa says
No, these fines don’t even touch Pilot’s profit. They’re a privately owned company with a family that is pretty well known in politics, they can buy their way out of anything, always have, always will. At the end of the day they’ll still be buying up stores as fast as the FTC will let them. Other than this issue the company is extremely stable and well connected. They have their hands in so many areas this is just a drop in the bucket. Sad but true.
jack johnson says
Pfj isnt going anywhere. No matter what the outcome is. My company might of but i didnt get any refund/rebate.
Driver Supporter says
I wonder which companies filed the class action law suit? I wouldn’t be surprised if it where some of the larger carriers. The thing that gets me is that they cry over a fuel price scam ripping them off, but they don’t mind ripping off the small truck driver that works for them. If only the FBI would go after them, but I guess it’s not criminal for companies to pay outrageously low income to those poor drivers who give up more than 70 percent of their lives so they can make money (how ironic). I mean come on, .29-.36 cents per mile, “really?!!!”
Emanuel says
I just wonder if anybody hath considered if o/o get back any money,I’m pretty sure they have lost out on many benifits too,not just fleet owners.??
JJ says
Why do we put up with so much that goes on in this job as drivers? We must all be crazy to some degree. Lol, just saying. The DOT, Shippers, Truck Stops, Trucking Companies,etc all take advantage of us. There seems no end in sight!
Bob T says
Because the gov broke up the Teamsters many years ago so just this sort of thing could be done to us.
Wayne says
The average truck driver has the IQ of a snail…….
Steven Jackson says
Sounds to me like truckers, o/of and company drivers need to organize.
Bill says
I haven’t bought more than a cup of coffee from PFJ in years .I don’t even have a card anymore .
Tony says
Pled? ummm, past tense of Plead is Pleaded.
Mark says
This is the tip of the iceberg considering the rest of the scamming that goes on in this industry and it all trickles down to the driver.
Juan Robledo says
The buck stop him, but he got his scape goats, probably already set up accounts to pay up, so his name doesn’t come up, this is why companies like end up like they do, he knew all about the scheme he is only trying to keep his sorry behind out of prison
Tony says
I stopped trading with them over 3 years ago after feeling like I wasn’t getting my rewards. For three years now I’ve used Loves exclusively and it’s worth $140 to $150 each month plus unlimited coffee and free showers.
Doug says
When I stopped getting discounts I stopped buying fuel at PFJ. If the company got reimbursed they certainly didn’t give any of it to me. I’ve since left the company and got my own authority. And I only buy fuel at Loves now.
Andrew says
So that’s possibly why Werner made a dramatic shift from Pilot/Flying J to Loves in the last fuel book update…
Cherokee says
Nice to see something being done, I’m sure the FBI is playing politics to a degree but if Hazelwood pleas down or rolls over on Haslam tuatara when the sparks will fly, other than that they’ve paid back the money so they’ll just get a slap on wrist. Let normal people do something like that and they’ll be in prison 20yrs
Chris says
I’m still lost at the “orifice” comment made by the CEO.
Bruce Campbell says
I hope they learned their lessons and cool it with the tom foolery. We’ve all goofed around before.
Michael M Nelson says
Can you imagine the ‘jail’ these scumbags will go to?