Pilot Travel Centers LLC, has entered into a Criminal Enforcement Agreement
with the United States in an effort to resolve the company's criminal liability for its employees' fraudulent conduct. The government said the company deceptively withhold millions of dollars in diesel fuel price discounts from hundreds of customers.
The majority stake in the company is owned by the Haslam family, including Governor Bill Haslam. The governor has repeatedly said that while he is Governor, he would not be directly involved in business decisions made by the company, headed by his brother, Jimmy Haslam.
Monday the government said Pilot has accepted legal responsibility for the criminal conduct of its employees, which caused more than $56 million in loss to its customers, and agreed to pay full restitution to every victim of the fraud. Pilot also agreed to pay the United States a $92 million monetary penalty.The agreement provides no protection from prosecution to any individual, and moreover, imposes a continuing obligation on Pilot to provide complete cooperation with the ongoing federal investigation of current and former Pilot employees relating to fraudulent conduct involving the sale of diesel fuel.
"The terms of this agreement, including the significant monetary penalty and the very serious consequences if Pilot fails to comply, demonstrate quite clearly that no corporation, no matter how big, influential, or wealthy, is above the law," said U.S. Attorney Bill Killian.
Since the investigation began in April 2013, 10 Pilot employees agreed to cooperate with the ongoing federal investigation and entered guilty pleas to mail and wire fraud charges as a result of their involvement in the fraudulent reduction of diesel fuel price discounts owed to Pilot customers. For example, the government siad during a November 2012, annual sales training meeting at Pilot's headquarters in Knoxville, a Pilot supervisor encouraged and taught Direct Sales employees how to deceptively reduce the rebates paid to some customers for the purpose of making targeted accounts more profitable for the company.
Pilot acknowledged that its employees emailed spreadsheets among each other that documented their fraudulent reductions, and that in some cases, its employees fabricated "back up" documentation sent to customers to justify fraudulently reduced rebate or discount amounts. CLICK HERE
to read the entire agreement