‘Architect’ of Pilot Flying J fuel scam strikes deal

The man dubbed by the FBI as the architect of the diesel fuel rebate scam by executives of the nation’s largest truck stop chain has struck a deal to confess, court records show.

The former Pilot Flying J vice president of sales, John “Stick” Freeman, and three other Pilot Flying J ex-employees have agreed to plead guilty in the multi-million-dollar fraud and, according to language in the documents filed Monday, cooperate with federal authorities in the ongoing probe.

Freeman has been repeatedly described in an FBI affidavit and an indictment filed by Assistant U.S. Attorneys David Lewen and Trey Hamilton as the architect of the scam in which less sophisticated trucking companies across the country were promised certain rebates but paid much less.

Freeman is providing information to the FBI about Pilot Flying J and the diesel fuel rebate scam the corporation’s own board of directors has conceded ripped trucking firms off to the tune of millions in five years, pleadings filed Monday in U.S. District Court show.

Also striking deals to confess are: John Spiewak, a regional sales manager for Pilot Flying J; Vicki Borden, director of direct sales; and Katy Bibee, an account representative who worked directly with Freeman.

All four have struck what’s known as cooperating plea agreements.

SALES PITCHMAN TURNED SNITCH

Assistant U.S. Attorneys Lewen and Hamilton make clear in the plea agreements Freeman is a key player in their effort to show the rebate scam was pervasive as was the culture of greed that spurred it – and that former Pilot Flying J President Mark Hazelwood was looking to expand it.

For instance, the plea agreement shows that when Freeman verified Pilot Flying J’s technology department could handle the expansion, Hazelwood replied via an email, “Awesome.”

Pilot Flying J CEO Jimmy Haslam has not been charged, though the FBI, indicated in testimony and court records he was a suspect. Haslam denies any knowledge of the scheme.

Hazelwood now will stand trial with the remaining Pilot Flying J employees charged in the conspiracy – former vice president of direct sales Scott “Scooter” Wombold and staffers Heather Jones and Karen Mann. Trial is set to begin Oct. 31. The chance to plead has now passed.

Monday’s plea agreements bring to 14 the number of Pilot Flying J sales staff and executives who have agreed to confess and talk.

PILOT FLYING J “SADDENED” BY PLEAS

To escape prosecution, Pilot Flying J’s board of directors entered a criminal enforcement agreement with the U.S. Attorney’s Office and agreed to pay $92 million in restitution. The corporation has paid out $85 million so far in lawsuits.

The travel-center giant issued a statement Monday, saying the firm was “saddened by the news” of more guilty pleas in the case and noted it “made whole every customer negatively affected” and admitted criminal responsibility since its downtown Knoxville headquarters was raided on tax day in 2013.