Pilot/Flying J to pay $92 million to avoid prosecution

Courtesy Weekly Business News

The national travel center chain Pilot Flying J has has agreed to pay a $92 million fine as part of an agreement with the federal government that will mean the company won’t be prosecuted amid a probe into the company’s diesel fuel rebate fraud charges.

According to the agreement with the U. S. Attorney’s office and the U. S. Department of Justice announced Monday, Pilot accepted legal responsibility for the criminal conduct of its employees, which cost its customers more than $56 million dollars, and agreed to pay full restitution to every victim of the fraud.

“The terms of this agreement, including the significant monetary penalty and the very serious consequences if Pilot fails to comply, demonstrate quite clearly that no corporation, no matter how big, influential, or wealthy, is above the law,” U.S. Attorney Bill Killian said in a news release announcing the agreement.

The agreement stems from a raid on Pilot headquarters more than 15 months ago, where investigators were looking for evidence that Pilot was involved in an ongoing scheme to short some commercial customers of rebates on fuel purchases.

Since then, 10 former Pilot employees have pleaded guilty to taking part in the scheme.

Brian Mosher, former director of sales for national accounts and the executive accused of holding “breakout” sessions, pleaded guilty to conspiracy to commit wire and mail fraud. He is the highest ranked executive to plead.

All agreed to testify against others in the case.

The agreement does not mean other former or current Pilot employees could not face charges.

The deal does not affect civil suits against Pilot from customers who claim the company withheld rebates they were owed. It also does not end the criminal investigation into individuals within the company, which has 23,000 employees and 650 retail locations nationwide.

“The company has cooperated fully with the government and will continue to do so,” said Aubrey Harwell, its attorney.

Pilot must also continue to provide “complete cooperation with the ongoing federal investigation of current and former Pilot employees relating to fraudulent conduct involving the sale of diesel fuel.” They must also keep the government updated on their internal efforts to prevent this from happening again.

If Pilot doesn’t meet the terms of the agreement, they have agreed that the government would file charges.

“We, as a company, look forward to putting this whole unfortunate episode behind us, continuing our efforts to rectify the damage done, regaining our customers’ trust, and getting on with our business,” said CEO Jimmy Haslam, who also owns the Cleveland Browns, in the news release. “We’ve been committed from the beginning of this to doing the right thing, and that remains our commitment.”

“The past 15 months, since the federal government served a search warrant on the company’s headquarters, have been very trying for all involved,” said Pilot Flying J’s attorney Aubrey Harwell in the news release. “The company has cooperated fully with the government and will continue to do so. As to its customers, the company has gone to extraordinary lengths to understand and identify any wrongdoing and make it right.”

“Under the terms of the agreement,” Harwell added, “the company has certain obligations, which it fully intends to fulfill. We appreciate the diligence the U. S. Attorney’s office has shown in this matter.”