KNOXVILLE, Tenn. - An executive with the European private equity firm that holds a stake in Pilot Flying J signed a registration application for an airplane that has drawn the scrutiny of federal agents.
Pilot, the Knoxville-based chain of truck stops, is facing a government investigation related to allegations of fuel rebate fraud targeting unsophisticated trucking companies. Two employees already have pleaded guilty to fraud charges.
An affidavit released in April included transcripts of secretly recorded conversations, including one in which a Pilot executive allegedly described how the company bought a private plane from Nashville-based Western Express, after that company discovered it had not received the full rebates owed to it by Pilot.
The plane deal could become a key piece of evidence if prosecutors seek to link fraud allegations to Pilot's top executives.
But records obtained from the Federal Aviation Administration show that Pilot's private equity partner also was aware of the plane acquisition.
An aircraft registration application filed with the FAA in 2009 was signed by Paul Pardue, identified as a vice president of Pilot Corp., and by Gero Wittemann, identified as the president of Propeller Corp.
Propeller Corp. is an entity affiliated with CVC Capital Partners, the London-based private equity firm that owns a substantial stake in Pilot.
According to its website, Wittemann is currently a managing director at CVC.
A CVC spokesman declined to comment for this story about the plane acquisition. In a written statement, CVC declared its full support for steps taken by Pilot in response to the federal investigation and said Pilot and the Haslam family have demonstrated integrity and strong character in their dealings with CVC.
It's not clear how much of Pilot is owned by CVC. The private equity firm has said its stake is less than 20 percent.
According to a bill of sale filed with the FAA, Pilot Travel Centers in 2009 acquired the Dassault-Breguet Falcon 20 from a company called Air 1 Inc., whose president was Wayne Wise.
Wise, who died in 2010, also was the president of Western Express.
According to secretly recorded conversations in a government affidavit, the airplane deal came about after Nashville trucking company Western Express learned it had not been getting the full rebate it was due from Pilot.
According to a transcript in the affidavit, John Freeman, Pilot's vice president of sales, described how he offered to cut the company a check, but a Western official instead suggested that Pilot buy an airplane from him.
"It was so broke, the (expletive) wasn't air-worthy, so we had to sell it in Nashville," Freeman added.
FAA records indicate that on June 11, 2010, Pilot Travel Centers sold the plane to Florida-based Flight Source International, and that company on the same day sold it to Royal Air Freight Inc., a Michigan firm.
The president of Flight Source International told the News Sentinel that his firm was in the chain of ownership because it brokered the deal.
In a de-registration request dated June 29, 2010, a Royal Air Freight official said the plane had been "scrapped and salvaged out."