News Column

Pilot Flying J Top Executive, Six Others After Investigation

July 16, 2013

A top executive at Pilot Flying J who has been linked to a fuel-rebate fraud scandal has been replaced.

In a recent letter to customers, Pilot CEO Jimmy Haslam said the company has named a new vice president of sales.

Related document: A customer letter from Pilot Flying J CEO Jimmy Haslam outlines changes at the company

The letter was dated July 12, and outlines new details about the company's response to an ongoing federal investigation that has already netted guilty pleas from five employees.

Haslam's letter said six members of the company's sales team have resigned or were terminated, while three more are on administrative leave.

The letter didn't name those employees but Pilot's former vice president of sales, John Freeman, was featured prominently in a government affidavit made public in April after agents from the FBI and Internal Revenue Service raided the company's West Knoxville headquarters and other sites.

Transcripts filed with the affidavit showed Freeman discussing the alleged scheme, often in profane language, including a situation in which Nashville trucking company Western Express learned it had not been getting the full rebate it was due from Pilot.

According to the transcripts, which were secretly recorded by a "confidential human source," Freeman described how he offered to cut the company a check, but a Western official instead suggested that Pilot buy an airplane from him.

An attorney for Freeman could not immediately be reached for comment.

Map: Locations of companies that have filed lawsuits against Pilot Flying J

Haslam's letter said David Hughes has been named the new vice president of sales. Hughes joined Pilot last year and previously worked for Covenant Transportation Group in Chattanooga.

The letter also said that Scott Nelson, formerly the president and CEO of Premier Trailer Leasing Solutions, has been hired as a vice president and that Dave Rewers will be in charge of the inside sales department. The letter said Rewers until recently was group vice president for fleet sales at Fleet One LLC, in Nashville.

The letter said Steve Vanderink has moved from his role as a division director of operations to Northeast/Midwest director of sales.

The letter said Pilot's audit team completed an initial manual diesel rebate review on June 30, and that the company has sent letters to all of its manual diesel rebate customers.

"Those accounts who had a discrepancy in the customer's favor received checks for the amounts of the discrepancies, plus interest," the letter said, adding that "numerous" accounts had a zero balance and some accounts owed money to Pilot.

The letter said Pilot's efforts to hire a Chief Compliance Officer have taken more time than expected, but that the company hopes to fill the position within the next several months.

It also said the company is "proactively confirming all of its pricing relationships with its diesel customers."

In an interview this month, Nebraska trucking executive Curt Morehouse said he had received a written letter from Pilot outlining the terms of their fuel agreement.

Morehouse said that previously Pilot had confirmed such deals in an email, although those emails didn't always specify the terms of the deal.

"(Now) I can say for sure there are no questions as to what our deal is and when it started and how long it exists for," Morehouse said.

According to the federal affidavit, W.N. Morehouse discovered last year that it had been shorted rebates totaling $146,565 over seven years.



Source: Copyright 2013 News Sentinel 2013


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