Six members of Pilot Flying J's sales team have quit or been fired and three others have been placed on administrative leave, including the vice president of sales, whose expletive-laced language is quoted extensively in a recent federal criminal court filing.
In a letter made public Monday, but dated July 12, Pilot CEO Jimmy Haslam informed his customers of the personnel changes without naming the nine employees negatively affected. He also disclosed that an initial audit has been completed of truckers who may have been shorted on promised rebates. Checks have been sent out with interest to all who were found to be owed money, according to Haslam.
The three-page letter comes amid a a federal investigation into charges that top Pilot officials devised a scheme to secretly reduce promised rebates to customers who they thought would never notice.
The allegations became public after an April 15 raid on Pilot's Knoxville headquarters and the filing of a 120-page affidavit by an FBI agent detailing the rebate skimming allegations.
Though Haslam did not identify those who have departed or were placed on leave, he did name a replacement for John Freeman, the vice president of sales. Freeman's lawyer, Roger Dickson of Chattanooga, declined to comment but did say his client was still on administrative leave.
In sales meetings that were secretly taped by an FBI informant and quoted in the affidavit, Freeman described in detail how he skimmed millions of dollars of promised rebates to Western Express, a Nashville transportation firm. When he got caught by the company, Freeman described at the secretly taped session how he had to buy a nonfunctioning airplane from the company to make up the difference.
In the letter, Haslam said that new procedures had already been put in place to eliminate the possibility of a repeat of the rebate skimming practices. He said "essentially all manually calculated diesel rebates at Pilot Flying J have been eliminated."
"It is important to note that there were numerous, manual diesel rebate accounts that had a zero balance and even some accounts that owed money to Pilot Flying J," Haslam said in the letter.
Haslam disclosed that David Hughes had been promoted to Freeman's job. He said Hughes came to Pilot last year from a Chattanooga trucking firm. Three other appointments were announced, including a vice president, Scott Nelson, and Dave Rewers, director of inside sales.
The affidavit filed in U.S. District Court in Knoxville in April lists a Vickie Borden as the director of inside sales.
"This has been a very difficult time for members of our diesel fuel sales team who remain in place," Haslam wrote, calling them "real troopers."
Five Pilot sales employees already have pleaded guilty to federal charges including mail and wire fraud. In addition 17 trucking firms have filed suit against Pilot in federal court and others are pending in state and county courts including Knoxville. The federal suits are expected to be merged when a judicial panel meets July 25 in Portland, Maine.
"We understand that Pilot Flying J still has lots of work to do to regain your trust," Haslam wrote in closing his letter.
By Walter F. Roche Jr., The Tennessean
Gannett / The Tennessean