, Land Line Digital Content Editor | Friday, September 22, 2017
The man who authorities say was the architect behind a multimillion-dollar scheme to bilk trucking companies out of rebates for fuel purchased at Pilot or Flying J travel centers has pleaded guilty to his role in the conspiracy.
John “Stick” Freeman, the former vice president of sales at Pilot Flying J, entered his guilty plea in federal court in Tennessee on Thursday, Sept. 21. Freeman and three other co-defendants all pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud.
The other three codefendants who struck plea deals to confess are: John Spiewak, a regional sales manager for Pilot Flying J; Vicki Borden, director of direct sales; and Katy Bibee, an account representative who worked directly with Freeman. All four defendants entered their pleas on Thursday. Sentencing hearings have been set for Jan. 24 in U.S. District Court in Chattanooga, Tenn.
Four former Pilot Flying J employees, including the company’s former president Mark Hazelwood, vice president of national sales Scott Wombold, and regional saleswomen Heather Jones and Karen Mann are scheduled to go trial later this fall. A pretrial conference is set for Oct. 16.
As part of the plea agreement, Freeman admitted to participating in a scheme with at least 17 other Pilot Flying J employees from about Feb. 1, 2008, to April 2013. Ten other employees already have pleaded guilty.
Jimmy Haslam, Pilot Flying J CEO and brother of Tennessee Gov. Bill Haslam, has not been charged in connection with the conspiracy, which involved several of the company’s highest executives in the sales division.
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.
Pilot Flying J previously entered into an agreement with federal prosecutors to pay $92 million in fines and another $85 million in restitution to more than 5,000 customers.
Among the evidence presented in the plea agreement are emails from Freeman’s work account that show him encouraging his subordinates to lie to customers about their rebate amounts. Other evidence presented in the agreement includes transcripts of conversations Freeman had with another employee who was serving as a confidential informant for federal investigators.
Freeman also hosted a direct sales management meeting at his lake house on Oct. 25, 2012. In attendance at that meeting were fellow co-defendants Hazelwood and Wombold and another mole from the FBI. Among the comments recorded during that meeting were Freeman’s admonitions to his sales force to take advantage of his customers: “F*** ’em early and f*** ’em often.”
Copyright © OOIDA