Last week’s Pilot Flying J fraud scandal rocked the trucking world.  On Monday, the FBI and IRS raided Pilot Flying J’s Knoxville, Tennessee headquarters. While many in the trucking industry speculated possible reasons, the company remained tight-lipped, though the company’s public relations firm confirmed the raid was attributed to the company’s customer rebate program.

Thursday afternoon the affidavits in the case were opened to the public.

According to the affidavit, in May of 2011, a former Pilot Flying J employee contacted the FBI with claims that the company was engaging in a scheme to “withhold diesel fuel price rebates from Pilot customers…without the knowledge or approval of the customer….increasing the profitability of Pilot and increasing the diesel sales commissions of the Pilot employees.”

The affidavit includes many recorded conversations between a current Pilot employee who was was working with the FBI to help expose the scheme.  Many of the conversations are with high-ranking sales officials within the company and detail how the schemes were carried out and what a sales person should do if he or she is caught shorting the companies.  The employees were told to blame the issue on a computer glitch.

Several carriers were listed in the affidavit: Knight Transport, Raider Trucking, Western Express, Schneider, Nastic, Morris, Big Iron, Transway, Texas Freight, The U.S. Postal Service, Bee Trucking, Casson Transport, Honey Transport, Mesilla Valley Trucking and Schrock Trucking.

On Friday, the first civil lawsuit against Pilot Flying J was filed.

According to Knox News Now, Atlantic Coast Carriers, Inc., of Hazelhurst, Georgia, is seeking class-action status against Pilot Flying J.

In the lawsuit, attorneys for Atlantic Coast state that Pilot frequently understated and underpaid the rebate amount owed to Atlantic Coast and other carriers, which resulted in a profit for Pilot sales representatives and the Pilot Flying J corporation.

According to the lawsuit, “Pilot executives, directors, principals, sales agents and administrative staff conspired to manually reduce the amount of rebate payments due to Atlantic Coast, and numerous other customers, in order to increase Pilot profits and increase sales commissions of its sales agents, without the consent or knowledge of affected customers….Pilot took active steps to conceal their activities from their customers and from law enforcement officials.”

The lawsuit lists 5 counts for Cause of Action:

*Count 1  Breach of Contract

“Pilot entered into an agreement with Atlantic Coast and other consumers to provide rebate funds to its own use.”

*Count 2 Racketeering Influenced Corrupt Organizations

“Defendants received funds derived from a pattern of racketeering activity.”

*Count 3 Breach of Contract 

“Pilot entered into an agreement with Atlantic Coast and other consumers to provide rebates fro purchases of diesel fuel at a set amount.  Atlantic Coast and other consumers purchased fuel from Pilot Travel Centers rather than from Pilot’s competitors in the diesel fuel market, in reliance  on this agreement.”

*Count 4 Punitive Damages 

“Plaintiffs are entitled to punitive damages for damages sustained as a result of Defendant’s actions.”

*Count 5 Attorney’s Fees

“Defendants have acted in bad faith warranting an award of attorney’s fees to Plaintiffs in an amount to be determined by the court.”

Follow this link to the court document.