KNOXVILLE, Tenn. -- Pilot Flying J is expected to spend $72 million to settle a federal class-action lawsuit over alleged fuel rebate fraud, according to a report by NewsNet5. Court documents filed Monday in U.S. District Court in Little Rock, Ark., revealed new details involving the extent of the alleged fraud.
Since the FBI and IRS raided Pilot Flying J headquarters in Knoxville, Tenn., on April 15 to investigate the alleged scheme to cheat trucking companies out of rebates for diesel fuel purchased at the chain's more than 650 truckstops, seven Pilot Flying J employees have pleaded guilty in federal court to fraud-related crimes and nearly 30 trucking companies have filed lawsuits. At least 11 former employees already are cooperating with the FBI and offering evidence. Seven of them have entered guilty pleas to fraud charges, and four have obtained immunity from prosecution in return for their cooperation.
The filings were in advance of a Nov. 25 fairness hearing where a proposed settlement is scheduled for final approval.
According to documents filed on behalf of 10 trucking companies that filed the lawsuit, Pilot Flying J's cash offer was described as "an extraordinarily good settlement" on behalf of trucking companies that are owed fuel rebates.
The total value, according to court documents cited by the news outlet, is approximately $72 million and includes interest, costs of audits, administration, attorney fee and additional $10,000 for each trucking company in "incentive awards." Also, attorney fees are expected to reach $14 million as well as more than $52,000 in attorney expenses.
Trucking companies taking part in the settlement must agree not to sue Pilot Flying J at a later date.
Pilot Flying J estimates that of 7,000 trucking company accounts it has audited, the company says it found nearly 2,500 accounts that had "discrepancies" regarding fuel rebates.
Not all trucking companies that did business with Pilot Flying J are willing to take part in the proposed settlement deal, however. The company estimated that at least 150 firms have opted out of the settlement and may continue a legal fight to recover what they claim is owed them, said the report.
Pilot Flying J is the largest operator of travel centers and travel plazas in North America. Its network provides customers with access to more than 60,000 parking spaces for trucks, more than 4,400 showers and more than 4,000 diesel lanes. Pilot Logistics Services is one of the largest independent energy logistics companies in North America, selling and distributing more than 1.3 billion gallons of refined petroleum products and serving more than 15,000 customers. Together, Pilot Flying J and Pilot Logistics Services generate sales of approximately nine billion gallons of petroleum annually.
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