The RICO act is famous for taking down high-ranking members of organized crime institutions and was created in the 1970s to be able to hold high-ranking members of the mafia accountable for the actions of their lower-ranking members. It was used successfully against such organizations as the Latin Kings, the Gambino Crime Family, and the Chicago Outfit. Pilot Flying J has just been accused of violating the racketeering statutes by Shoreline Transportation, a fleet of around 160, who say that Pilot Flying J breached its contract and committed fraud.
Shoreline is far from the first company to file a lawsuit against Pilot Flying J over their alleged rebate fraud scheme, but they are absolutely the first to site the Racketeer Influenced and Corrupt Organizations (RICO) Act.
“Based on the facts we all now know, this is one of the most egregious cases of intentional fraud we have ever seen,” said J. Michael Bowling, an attorney for Shoreline. “What makes it particularly troubling is that Pilot admits to targeting what it considered ‘less sophisticated’ companies with the hopes [it] would never get caught.”
This isn’t the only bad news that Pilot owner Jimmy Haslam has received this week. When the initial FBI affidavit was released to the public, it cited extensively W.N. Morehouse Truck Line as an example of a company that had been woefully taken advantage of. Haslam scored a victory when the owners decided to accept the repayment that they were owed without making it a legal matter. It turns out though, the owners aren’t the only ones Pilot needed to worry about.
Paul Otto, an owner-operator who used to lease with Morehouse has filed a class-action suit on behalf of himself and the other Morehouse drivers who have not seen any of the rebate money that they lost because of the alleged scheme.
Additionally, the credibility of the in-house investigator that Pilot hired has been called in to question. The investigator, R. Brad Martin, once was the head of the department store chain Saks. Curiously enough, during his tenure, the company faced charges from the SEC that it was withholding millions of dollars from its clothing suppliers in a scheme that’s eerily similar to what Pilot Flying J is accused of. Though Martin himself was never charged with any wrongdoing, the company ended up settling the claims for $60 million.
And all of this is piled on top of the news that broke last week: that two senior staff members had suddenly agreed to plea bargains. While there has been no definitive statement to this effect, generally if someone as high up as the director of sales is offered a plea bargain, that means that the real target sits even higher… maybe even at the very top.
Next Story: $800,000 Fraud Lands Trucking Company Owners In Jail
Source: fleetowner, overdrive, landline, cleveland
craigo says
This just keeps getting better…WOW
Jeremy says
Sad thing is Pilot and Flung J stops are STILL screwing O/O on rebates and points.
I find discrepancies on almost every transaction.
Thatguy says
Pilot flying J has long been trashy. I recall them bumping prices a dollar the day before Katrina made landfall. Oh…… That was 550 miles away in lavergne Tennessee. I hope the haslam family and their co conspirators all get aids and burn on hell.
tvieno says
I wonder if this will affect my Pilot points somehow.
frank guerrant says
shoreline dont have the right to say someone cheated them out of money,they still owe my father and i for loads we pulled while leased to them back in the 90’s.
Carl says
What is most amazing to me is, trucking firms are still conducting business transactions with PILOT! These trucking companies have no problems dealing with an organization that has stolen from them in the past , have executives admitting guilt to save their own butts and yet the fuel islands and parking lots remain full.
After 37 years in the transportation industry , I’ve been conditioned to accept two beliefs, one, is that the transportation industry accepts every cull, misfit and reject from every other industry and two, that there is nothing but liars and thieves left in this industry.
There evidently are or were some honest employees at PILOT who brought this to the attention of the FEDS. They should be applauded for their honesty, however in this industry they will more than likely be labeled rats or squealers.
Matt says
Make sure to run on over there and buy their fuel though!
tankyanker says
Perhaps it’s why they pay their tank drivers a decent wage.
Figures says
Very sad to think that many companies MAY have gone out of buisness because of PFJ. What is going around is coming around. The trucking companies that have taken advantage of their drivers, and now PFJ. You can only screw the system so long before you get caught, and you eventually do. It is true, and I can see it, that PFJ would take advantage of the companies that didn’t seem to have the proper accounting system in place, be it large or small. Small, with low payed or no education in these type of transactions, and large, where it just gets “lost”. PFJ accountants and sales people would know this, they meet the people and know them who sign the contracts, and who will be easy prey. It could be the possiblity that some of these companies still have contracts with PFJ, that is why they are (or have to) get their fuel from them UNLESS there is a stipulation in the contract regarding fraud. Contracts are so well written now, even with penalities if no fuel is purchased, you still pay. I am still surprised I have not seen anything in the paper or TV news about this…someone is keeping this very tight lidded! Only word of mouth by drivers and trucking sites is the information out it seems…to me! I know going into PFJ (when I have no other choice or option) the staff so NICE!! They say thank you, and smile even!! PR (public relations) must be working overtime to clean up their image…day late, many millions dollars short.
Brian White says
I learned, just by watching their fuel prices, that Pilot AND Flying J operated in much the same way. Even though the two companies weren’t linked (as far as I know) back then.
Poor customer service. Filthy bathrooms and showering facilities. Fuel prices 10-15 cents higher than anyone else.
And still, even today, when I drive by either establishment, there is all but a line waiting to get into the fuel line and parking lot. Even with the higher priced fuel. Even with the crappy customer service. Even with the filthy restrooms and showers.
I could go on, but I won’t.
Because neither of the two companies, even after Pilot taking over Flying J, get one cent of my money.
Save for visiting the local Flying J for $2.79 DEF at the pump now and then.
Loves isn’t much better.
Matt says
No biggie pilot fuel lines are still full at every location my company still use pilot and so many others too its a shame though imo
Walter says
Many FJ drivers quit when Peelot bought them out. They cut their money big time!