In The News
Testimony: Fuel Rebate Fraud Was Open Secret at Pilot Flying J
In the ongoing trial of four former Pilot Flying J executives for their participation in a fuel rebate scam, recent witness testimony suggests a culture of openness existed within the company about the fraud that appeared to be encouraged by top-level executives, according to numerous published reports.
The alleged fuel rebate fraud involved promising trucking companies certain amounts of money as a rebate for using Pilot Flying J fuel, but reducing the amount without the trucking companies' knowledge.
This week, Brian Mosher, a former sales director at Pilot Flying J, gave testimony in court that described conversations with top executives about withholding the full rebates and his work to train sales staff on how to do that, according to a report in the Knoxville News Sentinel.
Mosher told jurors he was so good at it that he had maxed out his commission as a salesman. At one point he said he spoke to Mark Hazelwood, former Pilot Flying J president and one of the four executives on trial, and threatened to stop defrauding customers because it no longer benefitted him personally. Hazelwood allegedly told him that it wasn’t a good idea, and Mosher was later given a promotion to director of national accounts.
Mosher has pleaded guilty for his role in the fraud scam, one of 14 former Pilot Flying J employees who have done so. His testimony directly implicated his former supervisor Hazelwood, who is one of the four employees and the highest-ranking one on trial. The other fomer employees on trial are Scott Wombold, former vice president of national accounts, and two former sales representatives, Karen Mann and Heather Jones.
Mosher also testified specifically about his dealings with Pilot Flying J customer Ryder, saying he created fake spreadsheets to show Ryder personnel, which allowed him to short the company more than $20,000 per month in rebates, according to a report in The Chattanoogan.com. Ryder was allegedly owed $100,000 a month from Pilot Flying J, but Mosher only sent them $78,870.
Former sales executive John Freeman, who has also pleaded guilty to his role in the fraud, allegedly asked Mosher to teach other members of the sales staff the rebate fraud scheme in a mandatory meeting at Pilot Flying J headquarters. That meeting was secretly recorded by Vincent Greco, a company salesman from Texas, who became a mole for the FBI’s investigation into the company.
In the meeting, Mosher told sales staff how to target unsophisticated trucking companies, cheat them of rebates, and how to get away with it.
Testimony also brought up Pilot Flying J CEO Jimmy Haslam. Mosher told jurors that he went over spreadsheets with Hazlewood and Haslam showing how much money the company was saving each month by paying trucking companies back less money than they were promised.
It is unclear to what extent, if any, that Haslam may have been aware of the fraud scam. He has not been charged in the case and has repeatedly denied any knowledge of it.
In a video update, Jamie Satterfield, who is covering the case for the Knoxville News Sentinel, said Haslam’s voice was also heard in a secret recording during a training session in which the fraud was discussed. Satterfield said it wasn’t clear from the recording which training sessions Haslam may have attended, and if he was there when the fraud was discussed. However, the reporter indicated that Haslam may have referenced an instance where Pilot was caught defrauding the trucking company Western Express, saying, “Sounds like Stick’s old deal with Western,” when speaking with Hazelwood. "Stick" was the nickname for Freeman within the company. When Western Express uncovered the differences between its promised and actual fuel rebates, it sued Pilot Flying J but later settled out of court.
In the recording, Haslam then told Hazelwood, according to the Sentinel, “We’re going to introduce them to a guy named Manuel.” According to Satterfield, “Manuel” was a term used by sales staff for the fuel rebate scam, because many of the trucking company owners targeted by the alleged fraud were Hispanic.