Truck News


Pilot Flying J alleged to have fraudulently shortchanged customer rebates

KNOXVILLE, Tenn. -- On Apr. 15, law enforcement officers swept down on the headquarters of Pilot Flying J, as well as the residences of several of its employees.

KNOXVILLE, Tenn. — On Apr. 15, law enforcement officers swept down on the headquarters of Pilot Flying J, as well as the residences of several of its employees.

Three days later, the FBI released a 120-page affidavit, which detailed a long-running scheme the FBI alleged saw the truck stop chain short-change customers on their agreed-upon fuel rebates. The affidavit included damning transcripts of conversations secretly recorded by an FBI informant.

In those conversations, Pilot Flying J managers openly discussed how they would reduce the rebates paid to customers without their knowledge. In one example, the company was alleged to have arbitrarily reduced a $10,000 rebate to $7,500, anticipating the carrier would be too unsophisticated to catch on.

In fact, it appeared the scheme was directed at smaller carriers that didn’t carefully monitor their fuel spending and negotiated rebates, though large fleets such as Mesilla Valley Transport and Western Express were also named as victims in the affidavit.

During a Nov. 19, 2012 sales meeting, Brian Mosher, director of sales for national accounts, said in a recorded conversation: “Some of ’em don’t know what a spreadsheet is. I’m not kiddin’. So, again, my point is this: know your customer. Know what you’re sending him. Know what his preferences are, know how sophisticated he is, okay? If the guy’s sophisticated and he truly has gone out and gotten deals from the other competitors and he’s getting daily prices from us, don’t jack with his discounts because he’s gonna know, okay?”

Mosher, who was quoted extensively in the affidavit, explained in one recorded conversation the reasoning behind the tactics.

“It’s a fair price. You’re getting a fair price,” he said to a colleague. “And I’ll tell you this: If I send this guy $21,000 instead of 25, and (his) buying hasn’t changed? Well that’s a pretty fair price. I sent the guy 21 cents a gallon, you know. And he has no earthly idea what the hell he did to get 21 cents a gallon. Has no clue. But that’s when this whole thing started for me, was back when Flying J filed for bankruptcy, that’s when we started. And I had a handful of guys on rebates. And when you put something on paper or on a computer screen in front of me that says last month you paid $278,000 in rebates, this month you’re gonna pay $798,000 in rebates, I’m goin’, ‘Oh whoa whoa, that’s not good, we’re not gonna do that.’ And that’s when we really started doin’ manual rebates and lookin’ at it and goin’, ‘Psst, here’s the real number’.”

Added Heather Jones, regional account rep, to another employee: “And to the point of them not knowing, I mean, on a percentage-wise, very few of ’em actually ask for backup. I would say less than 10%.”

To which Mosher said: “Yeah, you’re only gonna have a handful. And usually, guys, the guys that are asking for backup are the guys that are asking for pricing up front.”

Of the 35 Pilot Flying J employees named in the affidavit, two live and work in Canada: Ron Carter, director of sales for Canada and Joe Sigurdson, regional sales manager. It was unclear if any Canadian carriers were caught up in the alleged wrongdoings; none were named. The affidavit said those Pilot Flying J employees named “are or have been involved in, supervised, overseen, or supported, the direct sale of diesel fuel to Pilot customers since January 1, 2008.”

No formal charges have been laid against any of the employees.

Jimmy Haslam, CEO of the truck stop chain, was also named in the affidavit and was alleged to have been aware of the activities. He issued the following statement after the affidavit was released: I’ve read the affidavits. I now understand more clearly the questions the federal investigators are exploring. I maintain 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. We will continue to cooperate with the federal investigation and continue our own investigation in these allegations.

“I value the relationships we have with our customers, our vendors and our team members across this country and regret that they have to go through this with us, but I trust and believe their faith in this company and its principles has never been misplaced.”

The complete affidavit can be read here.

Truck News

Truck News

Truck News is Canada's leading trucking newspaper - news and information for trucking companies, owner/operators, truck drivers and logistics professionals working in the Canadian trucking industry.
All posts by

Print this page
Related Articles

3 Comments » for Pilot Flying J alleged to have fraudulently shortchanged customer rebates
  1. Steve Lennon says:

    As usual the trucking industry is being ripped off by another large corporation.We should all boycot Flying J and see how they like that,but we won’t.We will just take it up the gazzoo like we always do.

  2. Kate says:

    Used to love Flying J,but it went to hell in a handbasket when Pilot took over….now we know where Pilot got the money to buy them out….go FBI go!!!!!

  3. Abby Dave says:

    People, people, people. Where do you think Jimmy Haslam got the cash to buy his NFL team from? The tooth fairy? I am a Capitalist, and all that, but on the surface it would seem these folks have some ‘splainin to do, as Desi would say.(dating reference) The customers of the Flying Joke should be checking their numbers, and you can bet they will now. Maybe a good time to buy stock in Love’s? Sadly, I think it’s not public.

Have your say:

Your email address will not be published. Required fields are marked *