Pilot Flying J Fuel Rebate Scandal: What’s Going On?

Phil Cohen

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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 rebate program on fuel purchases by trucking corporations. 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 rebates owed to customers will be paid with interest by mid-July.

Pilot is the country’s biggest chain of truck stops and travel centers and the sixth-largest privately owned business in the U.S.

The search warrant affidavit that was filed in U.S. District Court in Knoxville, which numbers 120 pages, states that Pilot employees suppressed fuel price rebates and discounts from various corporations to increase the profitability of the business and improve sales commissions. The document says the FBI and IRS are investigating conspiracy charges and mail and wire fraud.

The investigation into Pilot began in May 2011 when an informant told the FBI that employees of the company were conning businesses that were too naïve to catch onto the fact that their agreement with Pilot was being altered to benefit Pilot without the awareness of the customers.

A sales meeting held in November that was recorded by an informer for the FBI revealed Brian Mosher, director of national accounts sales, advising employees on dealing with unsophisticated businesses in the con. The affidavit disclosed that Mosher would cut down rebates, giving an example of when a customer was owed a $10,000 rebate which Mosher reduced to $7,500.

Various employees’ parts in the fraud have cost customers thousands of dollars per month, and according to the affidavit, the scam has been going on for over seven years.

Several lawsuits against Pilot have already been filed; many of them seek a judge’s consent to have the case become a class-action suit, whereby other companies affected by the rebate scam can join in the litigation.

You can follow the Pilot Flying J Scandal and read more articles about the scheme here: http://topics.cleveland.com/tag/pilot-flying-j/posts.html

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Phil Cohen

Phil is the owner of PRN Funding and sister company Factor Finders. He has been an authority in the factoring industry for over 20 years, serving on the board of directors for several factoring associations.


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