As the federal investigation into Pilot Flying J rebate fraud continues, last week’s settlement of more than a dozen lawsuits has been rolled back to issues dating back to 2005. According to reports, more than 4,000 customers of Pilot and Pilot Travel Centers could qualify for compensation based on the settlement in U.S. District Court in Arkansas.
The lawsuits are the result of accusations that the company shortchanged its customers, trucking clients, on the fuel rebates they had been promised. Federal agents raided the company’s headquarters in Knoxville, Tennessee, on April 15, where boxes of evidence were seized. Pilot is the nation’s largest truck stop owner. Raids have been conducted by the Federal Bureau of Investigation and the Internal Revenue Service.
Five people who were Pilot employees have already entered guilty pleas to fraud charges in regards to handling rebates. Those have agreed to assist in future prosecutions. According to reports, six sales employees have either resigned or been terminated since the probe began. More than a dozen lawsuits have been filed against Pilot since the raid.
Pilot attorneys and various customers have worked to reach an agreement dating back to Jan. 1, 2005 as the date where rebate deficiencies began. Federal court records had previously indicated that date to be 2008.
Any rebate agreements that had been made with Flying J prior to its merger with Pilot on July 1, 2010 would be exempt under the settlement. U.S. District Judge James Moody gave the settlement his primary approval on Wednesday afternoon. Before reaching the settlement, Pilot said it had made up the rebates difference to about 250 clients.
Pilot CEO Jimmy Haslam has continuously denied knowing about the alleged fraud, and said the company admits no wrongdoing under the settlement. He said the company is cooperating with the investigation. Court documents show the settlement does not affect any federal criminal proceedings.
Pilot attorneys indicate the settlements could cost as much as $35 million. Pilot was founded by the Haslam family 50 years ago. CEO Jimmy Haslam is the brother of Tennessee Gov. Bill Haslam, who still owns significant, but undisclosed, interest in the company. Gov. Haslam has said he trusts his brother completely in handling the situation.
Nov. 25 is the date that has been set in U.S. District Court in Little Rock, Ark., to determine whether the judge gives the settlement final approval. Some customers say they are continuing with their individual law suits against Pilot Flying J.
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