FBI Locks Down Pilot Flying J Headquarters

daaaaAAAAnnnnng....

I wonder how much of a fall out there is going to be on them for this.....

 

You know, thats the problem with thieves, is that they never get enough and never know when to stop. Until they get caught, haha, it really does pay to be honest, now doesn't ?

 

Quote Originally Posted by 'olhand View Post
Wow what world r u livin in?

SUPER SENSE OF HUMOR!

 

I think more companies should do their audits on these truck stop companies!

 

Well, if it turns out the top guys knew about this , I hope they pay dearly. Losing the NFL franchise would be a good first step, though I feel sorry for Browns fans.

 

unreal scamming on fuel
like that...but you sure gotta buy 6 cups of coffee to get a free one....
I keep giving my business to Love's they have a better rewards program anyway

 

They should be jailed for the crap they pawn off as pizza. And their healthy green salad that is 70% cheese. lol

 

/The court document has a lot of interesting stuff in it, but at a 120 pages it is going to take awhile to read. It sure sounds like they are going to have the goods to nail them, what with a wire and actual live information. One person mentioned had somewhere around 68 accounts he kept up with, now times that with however many sales people they had. It does sound like they will be able to track some of the paperwork down, and hopefully those who were gypped will be paid back.

It is hard to believe something this big going on, but look at Madoff and all the others that bilked people out of their money. They should just take away all the rebates and lower the prices of fuel back where they belong so truckers could afford to get a paycheck.

 

how many got major rebates for the fact that they jacked the price of fuel for all the other customers to cover the rebate.

 

FBI: PILOT ENGAGED IN FRAUD

By Josh Flory
Published Thursday, April 18, 2013

Photo by J. Miles Cary
A Knoxville business and political empire five decades in the making was shaken to its core on Thursday by government allegations of a multi-million-dollar fraud that reached to the top of Pilot Flying J.

Three days after federal agents raided the company's headquarters, the government released documents in which recorded conversations and information from unnamed informants were used to allege that the company for years preyed on trucking companies that bought diesel fuel from Pilot, which withheld millions of dollars in rebates.

In an affidavit, FBI special agent Robert H. Root said based on information obtained in the investigation, there is probable cause to believe certain Pilot employees have conspired and schemed to engage in rebate fraud for many years, targeting customers that were deemed to be too unsophisticated to notice their agreed-upon discount with Pilot was being changed.

According to the affidavit, a current sales employee identified as CHS-2 ' shorthand for "confidential human source" ' alleged that the fraud has occurred with the knowledge of Pilot CEO Jimmy Haslam and president Mark Hazelwood. Specifically, the person said rebate fraud-related activities have been discussed during sales meetings in Knoxville at which Hazelwood and Haslam were present.

In a statement issued Thursday evening, Haslam said he had read the affidavits, and "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," the statement said. "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."

The affidavit said that in May of 2011 a source referred to as CHS-1 contacted the FBI to report knowledge of fraudulent activity by Pilot employees.

The affidavit said a current sales employee, CHS-2, had confided to CHS-1 that employees had been intentionally charging certain customers a higher price than the contractually agreed upon price, then concealing that fact.

The affidavit said CHS-2, a current regional director of sales, was contacted by agents in October and confirmed the existence of the fraud.

The affidavit said that in October, federal agents interviewed Cathy Giesick ' identified as a former regional sales manager who sold diesel fuel to trucking companies ' at her home in Temple, Texas.

According to the affidavit, Giesick told agents that one reason she left Pilot was because of her discomfort with its practice of intentionally lowering customer rebate amounts.

The affidavit said Giesick stated that while working for Brian Mosher ' identified in the affidavit as the director of sales for national accounts ' she discovered he was intentionally lowering the agreed-upon discount rate for diesel fuel purchases.

The affidavit said Giesick alleged that Mosher cut the rebates to customers because it made more money for Pilot and increased the commission he and any other sales person responsible for the customer would receive.

According to the affidavit, she also said that approximately three to four years ago she was in a meeting at Pilot headquarters which also included Mosher, Hazelwood, Haslam and Jonathan Duvall, a Pilot employee identified as the son-in-law of CFO Mitch Steenrod.

The affidavit said Giesick recalled that Mosher told Hazelwood, and Hazelwood acknowledged, that other employees were being promoted and that Mosher was making more money for Pilot by reducing customer rebates.

According to the affidavit, she also said that Mosher taught her that if a customer caught that she was deceptively cutting a rebate amount, she should blame the error on a computer glitch.

Duvall, Mosher, Giesick and Hazelwood could not be reached for comment.

The affidavit said that since Oct. 5, 2012, the FBI and IRS secured numerous recorded conversations involving Pilot employees.

During a meeting on Oct. 25, Pilot Vice President of Sales John Freeman allegedly described a situation with Nashville-based trucking firm Western Express in which Western discovered that they were not getting all the money they were due.

"And I said, alright, I'm gonna get you a check," Freeman recalled, according to a transcript. "And he said, 'Nah, I've got this airplane over here on the books for $7 million, I owe $1 million bucks on it, why don't you just buy this airplane?' And I'm like, 'What....' So I bought the (expletive) airplane."

According to the transcript, Freeman went on to say that the plane wasn't airworthy, so the company sold it in Nashville.

During a recorded conversation in February with CHS-2, Freeman allegedly made reference to buying an airplane, and was asked what "Mark and Jimmy" say about such events.

Freeman recalled telling "Jimmy" that "I got busted at Western Express."

"I mean, he knew all along that I was cost-plussin' this guy," Freeman said, according to the transcript. "He knew it all along. Loved it. We were makin' $450,000 a month on him. ... Why wouldn't he love it?"

Freeman went on to say that the situation cost Pilot $1 million, but added that "we made $6 million on the guy, cost us a million bucks."

Jimmy Haslam last year purchased the Cleveland Browns for more than a billion dollars, and has taken a highly visible role in that city. Greg Aiello, a spokesman for the National Football League, said Thursday that "We are going to respect the process of a federal investigation and decline comment."

http://m.knoxnews.com/news/2013/apr/18/fbi-haslam-knew-of-fraud/