Pilot Agrees to $92 Million Penalty

PilotFlyingJThe company avoids criminal prosecution with agreement.

Pilot Flying J has reached a settlement with federal prosecutors in which it will accept responsibility for the criminal conduct of its employees and agreed to pay $92 million in penalties.

The Knoxville, Tenn.-based company had been accused of defrauding its trucking customers on fuel rebates. The settlement, called a “criminal enforcement agreement,” may help to resolve questions about Pilot’s exposure but doesn’t exempt anyone, including top executives, from possible prosecution in the future, the Wall Street Journal reported.

The agreement however, will not end the probe into Pilot from the Federal Bureau of Investigation and the Internal Revenue Service, which first descended on its headquarters in April 2013. As part of the settlement, Pilot agreed “to cooperate fully and actively” with federal law enforcement “in any and all matters relating to its investigation of fraudulent conduct involving the sale of diesel fuel,” according to the agreement. This includes disclosing “truthfully and completely” any activities of its present and former officers and employees that might be related to the fraud, the agreement states.

The deal with the U.S. Department of Justice will not end civil litigation filed by customers, and it also won’t prevent prosecutors from bringing charges against employees of the company. But it does mean that Pilot won’t be prosecuted as long as it continues to comply with the terms of the agreement.

Chief Executive Jimmy Haslam, who is also a majority owner of the Cleveland Browns football team, issued a statement saying: “We, as a company, look forward to putting this whole unfortunate episode behind us, continuing our efforts to rectify the damage done, regaining our customers’ trust, and getting on with our business.”

Since the case began, 10 people have pleaded guilty to various charges relating to the investigation, according to Pilot spokesman Tom Ingram. Twenty-four people have been fired or left the company and another six are on administrative leave as a result of the investigation, he said.

Haslam has stated repeatedly he’s done nothing wrong and knew nothing of the scheme.


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