A federal judge sentenced James “Doug” Pielsticker, former Arrow Trucking’s chief executive officer and president, to seven-and-a-half years in prison on fraud and tax evasion charges in a Tulsa courtroom on Friday, Oct. 9. Pielsticker was facing up to 10 years in prison.
U.S. District Court Chief Judge Gregory Frizzell also ordered Pielsticker to pay $21 million in restitution and ordered three years of supervised release for both counts of fraud and tax evasion.
The original sentencing hearing for Pielsticker was set for Thursday, Oct. 8, but Judge Frizzell delayed it a day to review new testimony in the case before making his ruling.
Before his sentencing, Pielsticker apologized for his actions in the Tulsa courtroom, saying “I’m sorry to my family … to the people of Arrow. … I am devastated. … I’m a much different person that I was then,” Fox 23 News reported.
The defense also reportedly told the court that Pielsticker faces “unjustified animosity” and is the “most despised person in Tulsa,” according to Tweets from The Tulsa World and Fox 23.
Defense attorneys made a play for a reduced sentence for Pielsticker because of a heart condition. The judge did not appear to have much sympathy. According to Fox 23, Judge Frizzell said Pielsticker had nine months to get surgery for defribillator lead replacement and had not done it – missing two surgery dates in the meantime.
The defense said that Pielsticker was working as an Uber driver and could not afford his medical care, receiving it only after a life-threatening event and his family stepped in to pay. The fact he still smokes was also brought out in court, according to the Tulsa World.
As an accommodation for his heart condition, he will serve his sentence in a medical prison facility.
During the hearing, Judge Frizzell stated on Friday that the evidence clearly proved that Pielsticker conspired with Jonathan L. Moore, former chief financial officer for Arrow Trucking, to defraud the Transportation Alliance Bank out of nearly $11 million in an elaborate invoice inflating scheme.
On Thursday, Moore, former chief financial officer, testified that Pielsticker instructed him and Joseph Mowry, former secretary and general counsel, to create a fraudulent billing scheme by inflating invoices to defraud TAB out of millions. Moore, who pleaded guilty to conspiracy, is scheduled to be sentenced on Oct. 15. Mowry, who was never charged, died of natural causes at his home in 2011.
In his testimony on Thursday, Moore said Pielsticker instructed him to pay his own personal bills first before company expenses. According to the Tulsa World, Moore said Pielsticker said “f--- the drivers and f--- fuel” even though the company was clearly in serious financial trouble.
The Federal Bureau of Investigation alleged that Pielsticker and Moore conspired “to defraud the United States by, among other things, failing to account for and pay more than $9 million in payroll taxes, including federal income tax, Medicare and Social Security taxes for Arrow Trucking employees.” Prosecutors also alleged that Pielsticker failed to pay personal income taxes during the years 2007 to 2009.”
Despite the company’s dire financial situation leading up to its collapse in December 2009, investigators claim company money was used to pay for Pielsticker’s wedding, his Bentley and Maserati cars. Company money was also used to lease a private jet for personal trips and vacations, among other personal bills.
On Friday, Judge Frizzell denied Pielsticker’s request for a sentence variance, stating that “he will get adequate health care while incarcerated,” the Tulsa World is reporting. Attorneys for Pielsticker filed a motion petitioning the court for a light sentence in late September, citing a “precarious heart condition” known as viral myocarditis nonischemic cardiomyopathy. In his motion for a sentence variance, Pielsticker requested that Judge Frizzell impose “home confinement without imposing any period of incarceration.”
In February, Pielsticker pleaded guilty to one count of conspiracy to commit bank fraud and one count of tax evasion after being indicted on 23 counts by a grand jury in December 2014.
Former Arrow Trucking drivers and employees have been waiting nearly six years for Pielsticker to see the inside of a prison cell. Pielsticker was at the helm of Arrow Trucking when the “Nightmare before Christmas” occurred. Hundreds of truck drivers were left stranded all over the country, many under loads, with no working fuel cards or paychecks just three days before Christmas in 2009. Meanwhile, former Arrow employees, as well as many in the trucking industry, banded together to get the stranded drivers home.
Pielstickers maintained presence in trucking industry after Arrow collapse
After moving to Dallas following Arrow Trucking’s well-publicized collapse, Doug Pielsticker and his wife, Jessica Turkovich Pielsticker, continued to find work in the trucking industry.
According to court documents, Jessica Pielsticker is listed as the manager of two trucking companies, Cruz Transportation LLC, and Grey Transportation LLC in the Dallas area. The Federal Motor Carrier Safety Administration has since revoked the authority for both companies after the insurance policies for the companies were canceled.
After Arrow, Doug Pielsticker found work at Greatwide Truckload Management in Dallas. There he worked with David Miller, who left in July 2014, to become the executive vice president for Principle Transport Group in Willow Park, Texas. In a statement provided to Land Line by Miller’s attorney, Michael Hutchens, he confirms that Miller hired Pielsticker to come work for PTG as an independent sales agent shortly after they both left Greatwide.
“Shortly after Mr. Miller came to PTG, Mr. Pielsticker contacted him and inquired about a job or business relationship with PTG,” Hutchens said in the statement. “At the time, Mr. Miller had no knowledge that Mr. Pielsticker was the subject of an ongoing criminal investigation. PTG decided to give Mr. Pielsticker a limited opportunity by engaging him as an independent sales agent.”
Hutchens stated the agreement with Mr. Pielsticker was executed on July 22, 2014, and terminated at the end of the following month in August 2014. During that brief time, Miller claims that Pielsticker moved only one load through PTG “for which he was paid $123.75.” Miller told Land Line on Oct. 6 that he “fired Pielsticker in August 2014.”