KNOXVILLE, Tenn. -- A former vice president of sales at truckstop chain Pilot Flying J, John “Stick” Freeman, and three other former Pilot Flying J employees have agreed to plea deals in the company's diesel-fuel rebate fraud case and will cooperate with federal authorities in the ongoing investigation, according to court documents obtained by CSP Daily News.
Freeman has pleaded guilty to conspiracy to commit mail fraud and wire fraud. He faces up to 20 years in prison, a fine of not more than $250,000 and more.
Court documents identify Freeman as the mastermind of the scam, by which trucking companies were promised higher rebates than they received. At his lake house in Rockwood, Tenn., Freeman conducted “breakout sessions” to instruct other Pilot Flying J employees on how to handle the multitiered rebate scam, according to an affidavit.
The other defendants who signed plea agreements, according to the court documents, are John Spiewak, regional sales manager; Vicki Borden, director of direct sales; and Katy Bibee, an account representative who worked directly with Freeman.
“We are saddened by news of the pleas of four people who worked for Pilot Flying J acknowledging that they participated in defrauding some of our diesel fuel customers,” a Pilot Flying J spokesperson said in a statement provided to CSP Daily News. “After learning of such improper activities more than four years ago, we made whole every customer negatively affected; entered into a criminal enforcement agreement with the government, which included a $92 million penalty; continued to cooperate with the investigation; and made policy, procedure and staff changes to make certain nothing like this happens again.
"It is Pilot Flying J’s commitment to be a great partner to trucking companies across North America, always focusing our undivided attention on the best interests of our customers, team members and business.”
Trial is set for Oct. 31 in Chattanooga, Tenn., for former Pilot Flying J President Mark Hazelwood, former Vice President Scott "Scooter" Wombold and Heather Jones and Karen Mann, former members of the sales team.
Ten other employees have pleaded guilty to a scheme to defraud interstate trucking-company clients by delivering less-than-agreed-upon diesel-fuel rebates since federal agents raided Pilot Flying J's headquarters in Knoxville, Tenn., in April 2013.
Pilot Flying J CEO and Cleveland Browns football team owner Jimmy Haslam has not been charged with any crime.
Pilot Flying J agreed to pay $92 million in fines and accept responsibility for the criminal conduct of its employees while the government agreed not to prosecute the company. The agreement required Pilot Flying J to comply with several conditions, including cooperation in the investigation of people who may have been involved in the fraud. It did not protect any individual from prosecution.
Most of the lawsuits against Pilot Flying J were resolved by a class-action settlement, in which the company agreed to pay out nearly $85 million to 5,500 customers.
Based in Knoxville, Tenn., Pilot Flying J has more than 750 retail locations in 43 states.