Pilot Flying J fraudulently withheld millions in rebates for years, documents allege

By James Jaillet on

Pilot-TN1Pilot Flying J has been defrauding customers out of tens of millions of dollars in rebates over nearly a decade-long period, according to a federal document released Thursday, April 18.

The affidavit — used by the court to grant search warrants to the FBI and IRS — was released late Thursday and also accuses Pilot Flying J CEO Jimmy Haslam of knowing about the alleged scheme and sitting in meetings in which it was discussed by Pilot salespersons.

The document alleges that Pilot Flying J salespeople would essentially take advantage of carriers who were “too unsophisticated to catch” the errors.

Some carriers were not receiving nearly $100,000 a month in owed rebates, the affidavit says, and salespeople were withholding them in order to earn bigger commissions and boost company profits, according to the document.

PFJ-affidavitClick here to see the full 120-page affidavit — or click the image to the right.

Haslam is majority owner of the NFL’s Cleveland Browns, and his brother, Bill, is the governor of Tennessee. Pilot Flying J’s headquarters in Knoxville were raided Monday and placed on lockdown by FBI and IRS agents while they retrieved paper and electronic documents.

Haslam issued a statement Thursday evening in which he says he “maintain(s) that the foundation of this company is built on its integrity and that any willful wrongdoing by any employee of this company at any time is intolerable.”

Haslam also made a statement to the media Friday, April 19, in which he said that the FBI and IRS investigation is focused on “a very narrow band of a very large company.” CCJ sister site Overdrive has the full report on Haslam’s Friday press conference — Click here to see it. 

James Jaillet

James Jaillet is the News Editor for CCJ and Overdrive. Reach him at jjaillet@randallreilly.com.

16 comments
Financial Man
Financial Man

I believe Pilot is attempting to grow by buying up independents on traffic routes that will give them better pricing power on specific high truck traffic lanes.  I noticed that following the purchase of Flying J, the average price of diesel, in our market,  increased more than five cents per gallon.  This is the same principal put forth by Wal Mart.  Locate a store in a smaller community and drive the small competitors, independents, out of business.  Then they are able to raise their prices and make a ton of money.  Think about how many former small business owners now work for Wal Mart or other big box retailers.

ChiefTrucker
ChiefTrucker

Join NASTC - National Association of Small Trucking Companies. The fuel discounts are tremendous!

 

DeanFrink
DeanFrink

any idiot could figure them out. 8cents off the pump rebate but there price is 15 cents higher than any other truck stop. there is no rebate you just think there was.

RICHG001
RICHG001

Got news for you, the IRS does not raid a business unless they are sure of the facts before hand. When the Criminal Investigation unit of the IRS gets involved it's all over but the crying. I informed my drivers to use who they want to for fuel as well, It upsets me we had to give Pilot any of our money. This is not about how they treat drivers, this is about "Greed" . The common denominator is how they treated their own customers, drivers, fleet accounts, so it does not surprise me that they conspired to defraud everyone they could. Now its time for the attorney's to collect a few million in defense and lawsuits. Regardless of their guilt, once the IRS opened the door, this will be a long and costly matter to resolve. Since the bad economy has injured so many people, public opinion is extremely negative concerning corporate greed, I would not want to have to defend myself in front of a jury in our current public atmosphere.

I expect that the Governor, Mr. Haslam is disturbed over all this negative publicity, especially since he became a Billionaire by bilking his customers out of millions.  I think he should resign now as Governor and save Tennessee the embarrassment !!!!!!!!!!!!!!!  

JIm G
JIm G

I have dealt with the governmrnt before myself.  One thing I learned, you are not guilty until a jury says so.  Just because "Uncle's" IRS Gestapo unit has raided Pilot does not make them guilty.  I am not a Pilot customer myself. However, it I felt like RICHG001 I would not go back.  I hate to listen to people complain about a company they use every day.  You have a choice, vote with your feet and go somewhere else.  That's as bad as someone that complains about his employer.  If you don't like the job, QUIT, but stop complaining about, do something about it. 

Danny
Danny

And with all that extra profit they can't keep paper towels stocked at the fuel island.

GayleG
GayleG

We are a small company, and eagerly signed up with Pilot's program years ago, encouragine (but not requiring) our drivers to use them.  After a while we noticed that other fees ( check cashing, showers, etc.) were rising....and some things that originally were free we were suddenly having to pay for.  My opinion was that they lured you into their stops with the fuel rebates, and made it back on the higher fees.  We've since then told our drivers they can, but don't have to, use Pilot stops.  I have no idea if our rebates have been correct or not - accounting deals with that portion.

Knoxvillian
Knoxvillian

Pilot Fuel Drivers...we are in Indianapolis and are a fuel and lubricant company. We are GROWING and looking for fuel drivers with clean records.

 

We will treat you with RESPECT!

 

Robin Nelson

President

Nelson Oil Company, Inc.

www.nelsonoil.com

317-783-3165

dispatch@nelsonoil.com

RICHG001
RICHG001

PILOT HAS TAKEN ADVANTAGE OF TRUCKERS ANYWAY THEY COULD, ITS GREED GREED GREED. THIS IS NO SURPRISE TO ME. PILOT MAKES AN EFFORT TO OVER CHARGE FOR ANYTHING THEY COULD , WHILE THEY WERE MAKING MILLIONS AND DRIVERS WERE SUFFERING THEY DID NOT CARE. I HOPE THEY ALL GO TO PRISON, THE GOVERNOR AS WELL. I HOPE THEY HAVE TO SELL THEIR STORES OFF AND END UP POOR, JUST LIKE THEY TREATED EVERY DRIVER THAT PASSED THROUGH THEIR DOORS. I HOPE THEY HAVE TO EAT SUBWAY SANDWICHES EVERYDAY, JUST LIKE THE GARBAGE THEY THOUGHT THEY WOULD FEED TO TRUCK DRIVERS. I ALWAYS SAID THEY THINK THE WHOLE WORLD CAN SURVIVE ON A SUBWAY SANDWICH. PILOT HAS BEEN KNOWN FOR NO PARKING, THE REASON IS SIMPLE, GREED!!!! COME IN THE TRUCKSTOP, BUY YOUR FUEL, GET A SUBWAY ,THAN SEND THEM ON THEIR WAY AS FAST AS THEY CAN. THEY MADE THEIR PROFIT AND COULD CARE LESS ABOUT THE CUSTOMER!!! A MANAGER OF PILOT TOLD ME, HE HATED HIS JOB, YES THEY PAID HIM WELL, BUT TREATED THEIR EMPLOYEE'S LIKE UNDERPAID SLAVES WHILE THEY MADE MILLIONS.

Coach O
Coach O

Good-bye Pilot Flying J...have a nice flight!!

Dirty
Dirty

I've thought for a long time that something was amiss with Pilot, and I've often said so, but this proves out. What do they plant to do? Offer bigger incentives to offset the fraud, or close Pilot/J down.......interesting we shall see!

 

ColonelRadar
ColonelRadar

Flying J made the wrong move merging with Pilot, they got greedy and look where it took them !!! After the probable fall of Pilot, they may be able to buy out Pilot ? I certainly hope something good comes out of this for J ... 

DeanFrink
DeanFrink

jb hunt 8 to 10 cents off pump not rack. you get a fuel report each month shows price and gallons. you want rack go to trhe TA. you buy from them you are an idiot.

GayleG
GayleG

Totally agree with you, Jim, which is why we left it up to the drivers.

GayleG
GayleG

 @JonBecker We've asked - but that's a whole different department, and we've basically been told it's not our problem....  From what I understand, our rebate is based on gallons purchased per month,  and they may have been auditing it on a month-by month basis all along. 

Must Clicks

Events