Mon November 25, 2013
Pilot Settlement Hearing Scheduled for Today (Updated)
An Arkansas judge is expected to approve a proposed settlement package in the Pilot rebate fraud scandal. This morning, attorneys representing Pilot and the clients who agreed to settle will present their arguments to Judge James Moody.
The nation's largest truck stop chain is offering full repayment of money owed from fuel rebates, plus six percent interest and attorneys' fees. The Knoxville News Sentinel reports the total amount of the settlement is unclear. The company says total costs could be around $50 million, while the clients estimate total costs at $72 million.
No arguments have been filed in opposition to the settlement proposal, so it's likely Judge Moody will allow the settlement to proceed.
59 other Pilot clients opted out of the settlement, which allowed them to pursue their own cases against the company. Many lawsuits have already been launched. Last week, Judge Moody sealed a complete list of the clients who opted out. A Pilot attorney said the move was typical in such cases.
In April, federal authorities raided Pilot's West Knoxville headquarters. Agents with the FBI and the IRS seized documents and electronic data related to a long-running scheme in which sales staff skimmed money from promised fuel rebates with various trucking companies. Federal authorities later unsealed an affidavit containing transcripts of conversations in which Pilot employees talked about the scheme, which unfolded since at least 2008. Seven employees later pleaded guilty for their roles in the scheme.
UPDATE, 1:40 p.m. ET: Judge Moody approved the settlement package as proposed. A statement from Pilot said checks had already been sent to many clients, but that those checks included four percent interest. The company says additional checks covering the remaining two percent interest will be sent shortly. The judge's order issued today also contains a section designed to prevent Pilot from "improperly withholding rebates or discounts in the future."