Pilot Flying J executive says senior management knew of scheme

3:20 PM, Jun 21, 2013   |    comments
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By Nate Rau / The Tennessean

Pilot Flying J executive Jay Stinnett began cooperating with the federal investigation into the nation's largest truck stop chain the same day federal agents raided the company's corporate headquarters, according to a plea agreement recently unsealed.

Stinnett, who worked as a senior sales director for the Knoxville-based chain, told investigators he knew he was being dishonest when he directed staff to fraudulently reduce fuel rebates due Pilot's trucking customers.

Stinnett also pointed the finger at members of Pilot's senior management, telling investigators they were aware of the rebate scheme.

He admitted to his own role in the fraud scheme on April 15, the same day FBI and IRS agents conducted a raid of Pilot's headquarters. On Monday, Stinnett pleaded guilty to conspiracy to commit mail fraud. He faces up to 20 years in prison and a possible fine of up to $150,000 plus restitution.

As part of the plea, he agreed to cooperate with federal investigators and testify at any court proceeding and turn over any documents or evidence that could be used in the case.

Stinnett, previously a regional sales manager in the southeastern region for Pilot, had been promoted in 2011 to a new position to advise senior management on operations of the direct sales division, according to the plea agreement.

Stinnett's claim that senior management, who were not named individually, knew of the scheme is the latest evidence that crimes might have been committed at the top levels of the company. A warrant affidavit filed in the days after the raid showed Vice President of Sales John Freeman talking openly about how to carry out the scheme and placed President Mark Hazelwood in the middle of such conversations.

"(Stinnett) knew his actions were dishonest, his actions were done out of loyalty to Pilot for the purpose of increasing the company's profitability and members of Pilot senior management were aware of the rebate reduction scheme," the plea agreement states.

Stinnett is not the first sales manager to reach a plea agreement. Earlier this month, Arnold Ralenkotter, in charge of direct sales for Pilot in the northeast region, pleaded guilty to conspiracy to commit mail fraud and wire fraud. Three other sales staff have also reached plea deals.

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