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Pilot Flying J has finished auditing the accounts of its manual fuel rebate customers and sent out checks to each trucking company in the program that was owed money, according to CEO Jimmy Haslam.
Pilot Flying J Fuel Rebate Shortage
Pilot is continuing its internal review of each of the roughly 5,000 diesel fuel accounts associated with truckers, from 2008 to date.
“We understand that Pilot Flying J still has lots of work to do to regain your trust,” Haslam said in a three-page letter updating customers on steps he promised to take after the release of the affidavit the FBI used to back its raid on Pilot offices.
In April, federal agents stormed the business of Jimmy Haslam, Cleveland Browns owner and CEO of Pilot Flying J in Knoxville, Tenn., seizing records, files, emails, and other documents pertaining to the company’s fuel rebate program on fuel purchases by trucking companies. Since then, documents filed in federal court have shown that Pilot Flying J used a fraud scheme to retain millions of dollars owed to customers as gas rebates. The documents allege that Haslam knew about the scam that top sales associates perpetrated. Haslam has denied knowing about the scheme and has stated that all fuel rebates owed to customers will be paid with interest by mid-July.
The Letter
In his letter, Haslam wrote that six members of Pilot’s sales team have resigned or been fired, while three sales employees were put on administrative leave.
To date, regional sales managers Kevin Clark and James Stinnett, and regional account representative Holly Radford, have all pleaded guilty to charges of mail fraud and conspiracy while sales director Arnold Ralenkotter has pleaded guilty to one count of mail fraud as well conspiracy to commit wire fraud and account representative Ashley Judd has entered a plea of guilty to a charge of conspiracy to commit mail fraud. Stinnett signed a plea agreement last month in a U.S. District Court in Knoxville, Tennessee, that says senior management at the company was aware of the fuel rebate scam Pilot allegedly conducted for a seven-year-period and agreed to testify when called upon.
While no names were given for the employees who have left the company in the letter, Haslam named John Freeman as the new vice president of sales.
This week, Pilot Flying J settled with eight trucking firms that had filed federal suits on charges that they were scammed out of millions of dollars in diesel fuel rebates in an attempt to avoid millions of dollars in punitive damages. U.S. District Judge Joseph Moody of Little Rock, Arkansas, gave preliminary approval to the 36-page class action settlement proposal by Pilot, which doesn’t admit any wrongdoing by the company but does state Pilot will repay the companies for any rebate amounts they are owed, plus six percent annual interest.
Around 20 trucking firms have sued in federal or state courts; the suits are likely to be consolidated during a judicial hearing July 25 in Portland, Maine.
