Pilot Flying J Fires Two at Center of Rebate Scheme

Sales execs allegedly participated in fraud; one recorded conversations

Pilot Flying J (CSP Daily News / Convenience Stores / Diesel)

KNOXVILLE, Tenn. -- Pilot Flying J has fired two top executives who figured prominently in secretly recorded meetings at the truckstop chain under investigation for diesel fuel rebate fraud, reported The Cleveland Plain Dealer.

The company dismissed vice president of sales John "Stick" Freeman last week, a person with knowledge of Pilot Flying J's actions told the newspaper. He had been on paid administrative leave since shortly after the investigation broke.

Pilot Flying J also fired Vince Greco last week, according to the source. The former director of sales for the company's western region is believed to have been the employee wearing a wire who recorded conversations at sales meetings at Pilot Flying J headquarters in Knoxville, Tenn., and at Freeman's lake house near Rockwood, Tenn., said the report.

Defense attorneys refer to Greco as "Deuce" because they think he is "confidential human source-2" in the 120-page affidavit the FBI used as a basis for its raid on the headquarters on April 15.

Freeman supervised Greco, who worked in Bedford, Texas, according to the affidavit.

The firings bring the total to 11 Pilot Flying J employees who were either fired or left the company last week.

Although CEO Jimmy Haslam has denied any knowledge of the rebate scheme, Freeman has alleged that he told Haslam about aspects of the fraud.

Company president Mark Hazelwood, whom Freeman said was present at sales meetings where executives discussed the scheme, also has denied any knowledge of it, left the company in May. Pilot Flying J has not said whether Hazelwood was dismissed or resigned.

"As a private company, we don't comment on personnel matters," spokesperson Rachel Albright told the paper.

Click here to view the full Plain Dealer report.

On April 15, 2013, the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS) raided Pilot Flying J's Knoxville headquarters, beginning an investigation into an alleged scheme perpetrated by some members of the company's sales staff to withhold rebates owed to customers for contacted diesel fuel purchases. About a dozen participants have pleaded guilty to fraud and are cooperating with the authorities.

Pilot Flying J reached an $85 million settlement with hundreds of trucking customers who were affected by the alleged fraud. The company has agreed to repay any amounts owed plus 6% interest; however, more than a dozen companies are pursuing lawsuits outside of the settlement, and Pilot Flying J is seeking to consolidate the pretrial proceedings in several cases.

In January, a federal judge dismissed racketeering and deceptive trade practices charges against the company.

Pilot Flying J has more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America. Haslam also owns the Cleveland Brown football team.

Part of CSP's 2014 Convenience Top 101 retailers