There are now allegations that fraud at Pilot Flying J went beyond the fuel rebate program.
A plaintiff in the case against Pilot Flying J and its executives, including owner Jimmy Haslam, over the fuel rebate program has filed court papers alleging that the company lied about more than just the amount of money patrons should have received via rebate.
According to a May 8 amended complaint filing by attorneys on behalf of Wright Transportation of Mobile, Ala., Haslam and others at the nation’s largest truck stop chain lied to customers about the wholesale price the company paid for its diesel fuel. The plaintiff seeks to add a charge of fraudulent inducement against the defendants, including Haslam.
The 13-page motion filed in U.S. District Court for the Eastern District of Kentucky states that the fuel rebate program was designed so that the rates companies paid for fuel were based on Pilot Flying J’s costs, plus or minus a few cents per gallon.
The motion alleges that Pilot misrepresented its wholesale gas costs to consumers, and that rather than using the amount it actually paid for fuel, the price the company used in calculating the rebate was an industry average, plus various fees and taxes. The motion alleges that Pilot representatives met with representatives of Wright Transportation on multiple occasions beginning in 2007 and indicated to them that the fuel discount was based on Pilot’s actual cost for fuels, with no additional fees, charges or costs.
“Following each representation, Pilot fraudulently and deceptively withheld the agreed upon discounts to Wright, did not utilize Pilot’s actual fuel cost, utilized an artificial number or index, including OPIS (Oil Price Information Service), that is considerably higher than Pilot’s actual cost, led Wright to believe the artificial number or index, including OPIS, was Pilot’s actual cost, altered the agreed upon amount to be added or subtracted from “cost,” did not disclose certain fees, charges or costs and made inaccurate representations regarding fees, charges or costs,” Wright’s attorney, Stephen M. Tunstall wrote in the motion.
“Pilot’s representations were false and intended to induce Wright into entering and continuing fuel discount agreement(s) and fuel purchases, as well as facilitate Pilot withholding discounts, Wright overpaying, and Wright paying additional undisclosed fees, charges or costs.”
The motion further alleges that Haslam would have had knowledge of the deception, both through statements gathered by FBI affidavit and via sales force reports.
In March, Pilot Flying J settled with three of the seven remaining plaintiffs who opted out of a $85 million class-action settlement. So far, 10 former PFJ employees have pleaded guilty to fraud-related charges involving the fuel rebate scheme last year and are cooperating with authorities.
Pilot agreed to pay $92 million in fines and accept responsibility for the criminal conduct of employees in exchange for an agreement with federal prosecutors to avoid prosecution. The agreement does not prevent individual employees of the company from being prosecuted, however.
Copyright © OOIDA