The Pilot Flying J rebate fraud scandal took another turn Monday with the revelation that one of the customers to have been allegedly defrauded may have been the U.S. Government.
According to a report in the Knoxville News Sentinel, the U.S. Postal service may have been among the thousands of customers who were promised fuel rebates that went unpaid.
The detail was found in papers filed in federal court by an attorney on behalf of former Knoxville broker John Verble, who helped to uncover the alleged scheme for federal authorities and has applied for whistleblower protection but has been denied. The case potentially could land on the docket of the United States Supreme Court.
The brief filed by Verble’s lawyer included the accusation that the U.S. Postal Service was defrauded however recordings released by the FBI appear to show the company avoided including the Postal Service in the fraud scheme according to the Knoxville News Sentinel.
Verble, a former broker at Morgan Stanley Smith Barney’s in Knoxville, claims he was fired by the brokerage firm for aiding authorities during their investigation of Pilot Flying J while the firm claims he was terminated for “taking kickbacks” according to the report published Monday.
You can read the full story here.
An attorney for Pilot Flying J has denied the claim made by Verble that the U.S. Postal Service was among the clients who were defrauded according to the paper and maintains that all affected customers have received restitution.
Federal authorities, including the FBI and internal revenue service, raided Pilot Flying J’s headquarters on April 15, 2013 and 10 former employees have since pleaded guilty to various crimes while 8 more await trial. Pilot Flying J has settled a class-action suit worth nearly $90 million while also paying a $92 million penalty as part of a settlement with the U.S. Department of Justice to avoid further prosecution.
Pilot Flying J is owned and operated by the Haslam family including Tennessee governor Bill Haslam and Browns owner Jimmy Haslam, who serves as the company’s CEO.
Jimmy Haslam has denied any wrongdoing and knowledge of the scheme, which federal officials allege began in 2008.