Eight former employees for Pilot Flying J, including the former president, were indicted on federal charges in connection with a rebate fraud scheme.
The indictment, which was unsealed Tuesday, Feb. 9, charges former president Mark Hazelwood and seven other high-ranking employees in connection with a fuel rebate scam that first came to light in 2013. Pilot owner and CEO Jimmy Haslam was not among those indicted, and has repeatedly denied any knowledge of the scam.
According to the indictment, the conspiracy began on or about Feb. 1, 2008, and continued through April 2013 when federal investigators raided the company’s corporate headquarters in Tennessee. The indictment charges Hazelwood, and fellow executives Scott “Scooter” Wombold and John “Stick” Freeman, as well as Vicki Borden, director of the direct sales division and supervisor of co-conspirators John Spiewak, Katy Bibee, Heather Jones and Karen Mann. They were charged with conspiracy to commit wire and mail fraud by “identifying trucking companies from Pilot’s pool of existing and prospective customers perceived to be unlikely to detect false pretenses, promises, and representations” regarding its fuel rebate program.
The 58-page indictment details numerous emailed and private conversations between defendants, which federal authorities allege provide the basis of the criminal conspiracy.
The alleged conspiracy involved fraudulent and false pretenses, promises and representations made to the targeted trucking companies, including fraudulently generated invoices and rebate amounts. The indictment alleges the conspiracy involved either or both “Off-Invoice Fraud” where the represented discount amount was not submitted to Pilot’s billing system for the customer’s invoices and “Rebate Fraud” where customers who received monthly rebate checks had portions of the full rebate amount “deliberately and fraudulently” withheld by various means.
The company issued a statement Tuesday that said policies and procedures have been put in place to prevent similar incidents in the future.
“The company has cooperated with the investigation since its beginning and will continue to do so,” the statement reads. “The company repaid affected customers, accepted legal responsibility, and agreed to pay a monetary penalty. The trust and confidence of Pilot Flying J’s customers continues to be of paramount importance to the company, and their continued support and loyalty is very much appreciated.”
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