KNOXVILLE, Tenn. -- Approaching the fifth anniversary of the FBI raid on its Knoxville, Tenn., headquarters in April 2013, and with all the perpetrators of the diesel fuel rebate fraud scheme gone and the guilty verdicts in, truckstop retailer and fuel seller Pilot Flying J can get some closure on a difficult period in its otherwise venerable history.
As reported in a CSP Daily News Flash, the company is taking the end of the trial, which closed Feb. 15, as an opportunity to reaffirm its commitment to its customers and its business going forward.
"Our focus has been on the customers. Nearly five years ago upon learning of the improper transactions, we made whole every customer negatively affected, entered into a Criminal Enforcement Agreement with the government, cooperated fully with the government’s investigation and made policy, procedure and staff changes to make certain nothing like this ever happens again,” Pilot Flying J said in a statement provided to CSP Daily News. “At Pilot Flying J, we remain committed to being a great partner to trucking companies across North America and serving our customers, team members and business partners.”
In one testament to Pilot Flying J’s forward-looking focus, as well as the strength of the operation, Warren Buffett’s Berkshire Hathaway Inc. in October 2017 made a significant minority investment in Pilot Flying J. Omaha, Neb.-based Berkshire Hathaway acquired a 38.6% equity stake in the travel-center company, and in 2023, Berkshire Hathaway will become the majority shareholder by acquiring an additional 41.4% equity stake.
Buffett said the case had no effect on the deal.
After four days of deliberation that included being temporarily deadlocked over one charge against one defendant, jurors in U.S. District Court in Chattanooga, Tenn., on Feb. 15, 2018, reached a unanimous verdict in the federal trial of four former Pilot Flying J employees accused of taking part in the multimillion-dollar scheme.
Mark Hazelwood, former Pilot Flying J president; Scott Wombold, a former vice president; and Heather Jones and Karen Mann, who worked in direct sales, were indicted by a Knoxville, Tenn., grand jury in February 2016 on multiple counts.
According to court documents, the jury found Hazelwood guilty of wire fraud, conspiracy to commit wire and mail fraud and witness tampering; Wombold guilty of mail fraud; and Jones guilty of conspiracy to commit wire and mail fraud. Wombold and Mann were found not guilty of making false statements to federal agents.
The judge set a sentencing date for June 27 for Hazelwood, Wombold and Jones.
Fourteen former Pilot Flying J employees pleaded guilty earlier, and some testified during the trial. They are awaiting sentencing, said an Associated Press report.
Pilot Flying J CEO and Cleveland Browns football team owner Jimmy Haslam has denied any knowledge of the scheme and has not been charged with any crime. “As we have said from the outset, Jimmy Haslam was not aware of any wrongdoing,” Pilot Flying J said in a statement also provided to CSP Daily News.
His brother, Tennessee Gov. Bill Haslam, has not been involved in the company’s operations and also has not been charged with any wrongdoing.
In July 2014, Pilot Flying J agreed to pay $92 million in fines and accept responsibility for the criminal conduct of its employees while the government agreed not to prosecute the company. The agreement required Pilot Flying J to comply with several conditions, including cooperation in the investigation of people who may have been involved in the fraud. It did not protect any individual from prosecution.
Most of the lawsuits against Pilot Flying J were resolved by a class-action settlement, in which the company agreed in November 2013 to pay out nearly $85 million to 5,500 customers.
Based in Knoxville, Tenn., Pilot Flying J has more than 750 retail locations in 43 states.