‘Architect’ of Pilot Flying J fraud scheme, two others get prison sentences

The man who prosecutors dubbed “the architect” of Pilot Flying J’s fraud scheme involving a fuel rebate program will serve 30 months in prison.

John “Stick” Freeman, the former vice president of sales at Pilot Flying J, was sentenced Wednesday in federal court in Tennessee along with two other co-conspirators. Freeman had previously entered a guilty plea last year.

Two other ex-Pilot Flying J employees – Vicki Borden, former director of direct sales, and Brian Moser, former regional sales director – also received prison sentences on Wednesday. Borden was sentenced to 30 months for her role in the conspiracy, while Mosher received a two-year sentence. Mosher was a key witness in the trial of former Pilot Flying President Mark Hazelwood and three others. Hazelwood was sentenced to more than 12 years in prison.

In addition to jail time, Freeman and Mosher were ordered to pay $100,000 in fines. Borden was ordered to pay a $75,000 fine.

The conspiracy involved fraudulent and false pretenses, promises and representations made to the targeted trucking companies, including fraudulently generated invoices and rebate amounts. The indictment alleges the conspiracy involved either or both “off-invoice fraud,” where the represented discount amount was not submitted to Pilot’s billing system for the customer’s invoices, and “rebate fraud,” where customers who received monthly rebate checks had portions of the full rebate amount “deliberately and fraudulently” withheld by various means.

Pilot Flying J previously entered into an agreement with federal prosecutors to pay $92 million in fines and another $85 million in restitution to more than 5,000 customers.

Among the evidence presented in the plea agreement are emails from Freeman’s work account that show him encouraging his subordinates to lie to customers about their rebate amounts. Other evidence presented in the agreement includes transcripts of conversations Freeman had with another employee who was serving as a confidential informant for federal investigators.

Freeman also hosted a direct sales management meeting at his lake house on Oct. 25, 2012. Among the comments recorded during that meeting were Freeman’s admonitions to his sales force to take advantage of his customers: “F*** ’em early, and f*** ’em often.”

Nineteen executives and staffers of the truck stop chain either admitted or were convicted of participating in the Pilot Flying J fraud scheme. Fourteen pleaded guilty, three were convicted, and two were granted immunity, including former executive Vincent Greco, who turned FBI informant. Pilot Flying J CEO Jimmy Haslam has not been charged in connection with the conspiracy.

Court grants ex-Pilot Flying J chief Mark Hazelwood’s request to remain free pending appeal