Auditors' report finds companies received proper pay in Pilot rebate scheme

By Clarissa Hawes, Land Line staff writer | Wednesday, June 25, 2014

As part of the class action settlement in the alleged fuel rebate scam involving Pilot Flying J, the country’s largest truck stop chain was ordered by the court to hire an independent auditor to review payments to involved trucking companies.

The auditor determined Pilot’s internal audit “is accurate.”

Pilot hired Horne LLP, an accounting firm with offices in five states, including Tennessee. The accounting firm reviewed the findings of Pilot’s internal audit, which was conducted a few months after the federal investigation into Pilot’s fuel rebate practices was launched.

Court documents state that Horne began its work in August 2013 and concluded in May. The audit included eight years of data, including daily retail diesel fuel prices for over 600 locations. The firm also reviewed the varying discount arrangements made with Pilot’s customers, as well as by store location and/or region.

Millions of emails, salesforce entries, pricing documents and other sources of information were used to establish the correct discount program arrangement, according to the report. The accounting firm spent almost 8,400 hours on the project.

Just seven months after federal investigators publicly announced a criminal investigation into Pilot Flying J’s fuel rebate program stemming back to 2005, a federal judge approved a nearly $85 million class action settlement in November 2013.

U.S. District Court Judge James M. Moody approved the settlement in which Pilot will pay more than $56.5 million to trucking companies who had a rebate or discount program with Pilot from Jan. 1, 2005, to July 15, 2013. Pilot will pay another $9.75 million in interest, which is 6 percent.

More than $18.6 million was approved to pay attorney’s fees and the court-approved accounting firm, Horne LLP.

Of the approximately 5,500 members of the class, only around 60 trucking companies opted out of the class settlement to possibly pursue their own legal action against Pilot.

Pilot still has seven cases pending in federal court in Kentucky after the U.S. Judicial Panel on Multidistrict Litigation granted Pilot Flying J’s motion to consolidate the remaining federal lawsuits in April.

Pilot had filed a motion asking that the cases be transferred to the U.S. District Court in Knoxville, Tenn.

So far, 10 former Pilot employees have pleaded guilty to their roles in the fuel rebate scheme.

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