"The jury's verdict reflects a significant and well-deserved rebuke to SunMart's fraudulent pump calibration scheme," Abbott said. "After carefully considering the evidence [image-nocss] during an eight-week trial, the jury concluded the defendant illegally set its gasoline pumps to deliver less than a full gallon of fuel."
From July 18 to 20, 2008, dozens of inspectors with the Texas Department of Agriculture conducted Operation Spotlight, a multi-county effort to inspect and test 1,701 gasoline pumps at 86 SunMart stores. After testing 1,701 SunMart pumps, TDA investigators determined that 985 were dispensing less than a full gallon of fuel. According to court documents filed by the state, 58% of SunMart's pumps were calibrated to dispense less than a full gallon of fuel. While Operation Spotlight was still ongoing, Petroleum Wholesale attempted to cover up its improper calibration scheme by dispatching company personnel and third-party contractors to recalibrate pumps before inspectors could reach all 86 SunMart locations.
Texas Department of Agriculture (TDA) commissioner Todd Staples launched Operation Spotlight after he learned that Petroleum Wholesale routinely failed TDA inspections. Under Texas law, the agriculture commissioner is charged with regulating weights and measures, including gasoline pumps. Later, TDA referred their findings to the Texas Attorney General's Office, which charged Petroleum Wholesale with violating the Texas Deceptive Trade Practices Act (DTPA). The state's enforcement action indicates Petroleum Wholesale illegally calibrated and maintained their fuel pumps in a manner that defrauded customers.
During the eight-week trial, a team of four assistant attorneys general provided jurors 48 boxes of fuel receipts, which covered 5,766,243 gallons of gasoline and 727,339 fraudulent sales transactions. The jury's $30 million verdict was based upon consumer transactions and penalties per violation of the DTPA. The jury found Petroleum Wholesale liable for $18,765,411 in restitution, $8,494,212 in civil penalties and more than $2.7 million in fees to the state.
With the conclusion of the trial phase and the jury's determination that Petroleum Wholesale violated the law, the state will now seek a permanent injunction prohibiting the company from calibrating its own gasoline pumps. The state will also ask the court to bar it from using unlicensed calibrators to serve its pumps in the future. At this time, enforcement actions are still pending against Billy Wigginton, owner of KT Fuel Services Inc., Arthur Ramirez and Daniel Miller. All three are charged with calibrating Petroleum Wholesale's pumps when they were not properly licensed to do so.
Petroleum Wholesale is a full-service petroleum company offering retail convenience store products, branded and wholesale gasoline, on- and off-road diesel, lubricants and common-carrier transportation services. It services more than 350 retail locations throughout 10 states: Texas, Oklahoma, Kansas, New Mexico, Colorado, Arizona, Nevada, Utah, Wyoming, and California. It also operates a pipeline-fed terminal in Houston. Petroleum Wholesale and Sun Development own properties comprised of company-operated retail, leased retail and land. Select locations also offer Elite Cigars, branded restaurants such as Subway, Quiznos, Noble Roman's Pizza, Sonic, and their own food concepts.
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