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Haslam-owned truck-stop chain won’t be charged

By WTOP Staff

TRAVIS LOLLER
Associated Press

NASHVILLE, Tenn. (AP) — The truck-stop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam may have put the worst behind it after federal attorneys agreed not to prosecute Pilot Flying J for cheating customers.

In an agreement with prosecutors, the nation’s largest diesel retailer acknowledges that employees cheated trucking companies out of promised fuel rebates and discounts. Pilot has agreed to pay a $92 million penalty, which is within the range of what the company would be expected to pay if convicted at trial.

Nashville criminal defense attorney and former prosecutor David Raybin, who is not involved but has followed the case, said the agreement most likely signals that Knoxville-based Pilot’s CEO Jimmy Haslam, who has said he had no knowledge of the scheme, will not face charges.

“No prosecutor would enter into an agreement like this, ask for this kind of sanction, unless they didn’t have enough evidence to indict Haslam,” he said. “Also, Pilot would not agree to pay unless they felt the government would not prosecute him.”

Gov. Bill Haslam holds an undisclosed ownership share in the company but has said he is not involved in Pilot’s day-to-day operations. Pilot has annual revenues of around $30 billion.

The agreement is good for the company, Raybin said, because, “if a company gets indicted, that’s ruinous, even if they’re not convicted.”

But although the worst may be over for Pilot, there could still be further prosecutions of current and former employees.

The agreement signed by U.S. Attorney for the Eastern District of Tennessee Bill Killian requires Pilot to comply with several conditions, including cooperation with the ongoing investigation of people who may have been involved in the fraud. The agreement does not protect any individual at Pilot from prosecution.

Also, several individual trucking companies are suing Pilot for fraudulently withholding discounts and rebates, although the majority of customers participated in a class-action settlement in which Pilot agreed to pay out nearly $85 million last November.

Since federal agents raided Pilot’s Knoxville headquarters in April 2013, 10 former employees have pleaded guilty to the scheme, which was known by a variety of euphemisms including “manual rebates.”

FBI special agent Robert H. Root said in an affidavit filed in federal court last year that the scheme involved sales team members reducing the amount of money that was due to trucking company customers they deemed too unsophisticated to notice. The scheme was widely known in the sales department, according to court documents, with supervisors teaching other employees how to do it.

Court records said the scheme lasted from at least 2007 until an FBI raid in April 2013.

In May, several top executives abruptly left the company. Pilot officials have not said why the employees left, but the agreement with prosecutors acknowledges that the company has terminated or placed on leave employees who violated company policies. It also acknowledges that Pilot acted quickly to investigate problems with the rebate program and repay cheated customers with interest.

Through a spokesman, Jimmy Haslam declined to comment on the agreement with prosecutors, but issued a statement.

“We, as a company, look forward to putting this whole unfortunate episode behind us, continuing our efforts to rectify the damage done, regaining our customers’ trust, and getting on with our business,” it said.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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