Trucking veterans will remember when the now infamous Arrow Trucking, Inc. shocked everyone by closing its doors and stranding hundreds of drivers three days before Christmas in 2009. Now the CEO of Arrow, James Douglas Pielsticker, has been arrested and charged with multiple counts of fraud related to his company’s spectacular demise. If he is found guilty on even a small portion of the charges, he could very easily be spending the rest of his life behind bars.
Pielsticker was arrested in Dallas and is being held for the FBI after he was indicted by a grand jury on 23 separate counts which included one count of conspiring to commit bank fraud, 15 counts of bank fraud, one count of conspiring to defraud the Internal Revenue Service, three counts of tax evasion, and three counts of failing to account for and pay over payroll taxes.
To understand where these charges come from, we have to understand the circumstances that lead to Arrow’s bankruptcy.
Everyone believed that Arrow Trucking had been doing well right up until their collapse. In fact, just a year before, they had signed a deal to replace their 1,400 truck fleet with newer models over the next five years; they were operating in the U.S., Canada, and Mexico; and they had over 1,700 employees.
Unbeknownst to anyone outside of a few higher ups however, their appearance of success was the result of taking loan after loan until they were up to their eyeballs in debt. So when their primary lender, Transportation Alliance Bank, refused to give them any more credit, the executives saw the end coming, and closed the doors that very same day. Over 1,700 people lost their jobs and hundreds of drivers were stranded all across the continent with no way to get home after their fuel cards stopped working without warning.
When they officially filed for bankruptcy in January 2010, they had $8.55 million in assets $98.97 million in liabilities. Arrow was only able to continue operating for as long as it had because it defrauded their lenders by providing them with false financial documents and cheating on their taxes.
Up until this point, Pielsticker had been the target of multiple lawsuits, but now, thanks to the grand jury and a joint FBI/IRS-CI investigation, he has been charged with multiple federal crimes. If he is convicted, he can serve up to 30 years in prison and pay fines of up to $1,000,000 for each of the 16 counts related to bank fraud; serve up to 5 years in prison and pay fines up to $250,000 for each of the 7 counts related to tax fraud; and he’ll have to pay back the $15,000,841.32 he personally earned as a result of the numerous frauds he allegedly took part in.
Arrow Trucking’s former Chief Financial Officer pled guilty to charges related to the scheme on December 4th.
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