Deep Dive
Shownotes Transcript
Falcon Transport was initiated in 1903. It started with two horses and a buggy, and now we're about a thousand trucks. The trucking company I worked for previous treated me like a piece of equipment. Coming over to Falcon Transport, they care about their employees. You're not just a number. They do take very good care of you. My future at Falcon looks like me being a hundred years old and still driving down the road in a Falcon Transport truck.
Nicole Rupert was enjoying a nice relaxing night at home on Saturday, April 27th, 2019 when she received an unexpected email from her employer, Falcon Transport. The email read, "We regret to inform you that Falcon Transport Company is not able to continue operations and will be shutting down effective today. Please stop any work you are doing for the company immediately. You are not expected to return to work. Please be on the lookout for further information we will be sending regarding this situation."
Just like that, without warning, the 116-year-old Youngstown, Ohio-based trucking company that employed more than 550 people was out of business. And Nicole, who had been working as a dispatcher for Falcon for over four years,
found herself without a way to provide for her family, literally overnight. My fiance worked there as well, so we're both out of work. My best friend worked there. My future mother-in-law worked there. So we're all kind of just in the same boat. The same boat, floating up shit creek without a paddle. And if that wasn't bad enough, many of the Falcon truck drivers found themselves stranded in shit holes without a working fuel card. I am in Tom's Brook, Virginia.
The closure of Falcon Transport took everyone by surprise, but really it shouldn't have. About a year and a half earlier, the company had been purchased by CounterPoint Capital Partners of Los Angeles.
the kind of private investment firm that acquires successful businesses, saddles them with debt, bleeds them dry, and then closes the door just so a few rich people can keep getting richer at the expense of the working class. It's the same practice that former presidential candidate Mitt Romney has used to make hundreds of millions of dollars with Bain Capital. One can presume that this was Counterpoint's plan for Falcon Transport all along. However, that process was probably expedited when this happened.
It is the end of the line for the General Motors plant in Lordstown, Ohio. Today, that plant will assemble their last Chevy Cruze before closing their doors for good on Friday. This is the first of five North American facilities GM will idle this year, leaving thousands of workers without a job. In March 2019, the General Motors plant in neighboring Lordstown, Ohio, one of Falcon Transport's largest customers, laid off more than 1,500 workers and shut its doors for good.
In a company restructure, GM decided to eliminate the models that were produced at the Lordstown factory in order to save $6 billion. It was a tough pill to swallow for the Ohioans that worked at the plant, considering GM had received $13 billion in government assistance in 2009 alone. Not to mention all of the promises and the pandering the American autoworker was subjected to during the 2016 campaign.
As if a candidate only needed to win over the populace of a few key states to overrule the popular vote. What a stupid system that would be. But instead of the new factories and steady work that was promised, what the American autoworker received was asinine tariffs on steel and aluminum that made cars too expensive to build stateside. Instead, production shifted to the same countries that the current administration had spent so much time and effort and money trying to punish. Bravo.
As a result, all of the adjacent companies like Falcon Transport that depend on being included in the auto industry's massive supply chain, now they're suffering too. Is that what they mean when they talk about trickle-down economics? This is Tim Ryan, a US representative from Ohio. Mr. Speaker, the workers of the United States of America are tired of being pawns in this big corporate game. President Trump came to my community and said, "Don't sell your house!"
Don't sell your house. We're going to get these houses' price costs back up, prices back up. And since that time, we lost the second shift at our General Motors plant. And General Motors, on that same day that the workers were walking out, announced they're building a new factory in Mexico. President Trump said, don't sell your house. A few months later, General Motors lays off the first shift. They tell the workers two days after Thanksgiving,
And just a couple of days ago, a trucking company, Falcon Transport, just outside of Youngstown, Ohio, their workers get a text message. 600 workers get a text message at 8 o'clock on a Saturday night. You lost your job.
In the meantime, the workers will have to help themselves.
A few weeks after Falcon Transport was shuttered, in order to recover their unpaid wages and accrued benefits, a group of employees filed a class action lawsuit against the company for violating the Federal Worker Adjustment and Retraining Notification Act of 1988, better known as the WARN Act. According to the WARN Act, companies with 100 or more employees are required to notify their staff within 60 days of a mass layoff, something that the executives of Falcon Transport failed to do.
Truck drivers have become familiar with the law because at least 10 trucking companies have violated the Warren Act in recent years. Companies like New England Motor Freight, who filed for bankruptcy on February 11th, 2019 and laid off its employees four days later. Companies like Consolidated Freightways in Vancouver, Washington, who shut down and immediately terminated more than 15,000 jobs in 2002. And companies like Arrow Trucking in Tulsa, Oklahoma,
who locked its doors and fired all of its staff without prior notice in December 2009. Although Aero Trucking had suffered the same fate as so many trucking companies before and after, Aero Trucking's demise was not the result of bad policy, economic downturns, or even automation, which spells doom for the entire industry. Aero Trucking was torn apart from the inside by nepotism, greed, and incompetence. A timely American tale, if I've ever heard one.
A spoiled rich kid takes the wheel of his father's successful trucking business and crashes it straight into the ground on this episode of Swindled.
They bribed government officials. Clear violations of federal state law. Paid a plague of taxpayer dollars that were wasted. Paid tens of millions of dollars or a billion dollars. By falsifying its books, records, and in control of some kind of swing, etc.
In the middle of the United States, in the state of Oklahoma, is one of the key cities of America. Tulsa, built in a generation and still growing. Jim Pillsticker hated his job as a corporate attorney. He valued the experience, but the minutiae of the legal profession bored him. Jim had worked hard to get where he was at, but he craved something a little more challenging.
Something that he could watch grow the harder he worked. Jim had always dreamed of owning and operating his own business. He just needed to find the right idea and the right opportunity. Both of which presented themselves to him one day in 1965.
Jim Pillsticker quit his legal job suddenly, moved back to Tulsa, Oklahoma where he was born and raised, and with a business partner, purchased six pre-owned single axle trucks that would be used to haul freight, construction materials, and oil field equipment across the country. And with that, the Aero Trucking Company was born. The company grew exponentially over the next 30 years. In 1972, Aero Trucking employed only a handful of people and operated about 20 trucks.
By 1997, the company had more than 4,000 vehicles in operation and boasted a workforce of more than 1,400 people, generating annual revenues of more than $250 million. Arrow Trucking had become a recognized leader in the flatbed trucking industry. The company won a multitude of awards for its outstanding safety record, including Best Overall Safety Program, as well as Safest Motor Carrier in the nation.
The maintenance policy for its fleet was second to none, as Aero Trucking's vehicles were always in impeccable mechanical condition, experiencing very little downtime. And the savvy financial management of the company allowed it to survive the booms and busts of an industry that is susceptible to fluctuating gas prices and economic uncertainty. Trucking industry insiders attributed most of Aero Trucking's success to its owner, Jim Pilsticker. Jim was a fantastic leader and everybody that met him sang his praises.
He was charismatic and energetic, he had a terrific sense of humor, and he had a work ethic that was unmatched by his peers. People that worked for Jim would often use words like honesty, integrity, and fair when describing him. Jim's employees also admired the fact that he was not afraid to get his hands dirty. There are stories of Jim coming out of his office in a suit and tie, rolling up his sleeves and helping the dock workers load a shipment of freight onto a truck.
Jim Pilsticker's willingness to join the front lines of the operation only strengthened the loyalty that the employees of Arrow Trucking felt for the company and to the man who had built it. And in return, Jim Pilsticker was loyal to them. Arrow employees were paid as well as anybody in the industry, not to mention the generous health benefits and cash incentives that were offered.
Jim was even known to pay out of pocket for the funeral costs of long-time employees that had passed away. Mr. Pillsticker is one of the greatest men I've ever met. He's like a father figure in a lot of ways. To Jim Pillsticker, the employees of his company were an extension of his family. A family that included his wife Carol, whom he had met on a blind date while attending law school at the University of Oklahoma after he graduated and joined the army.
Jim maintained a long-distance relationship with Carol while he was stationed in Germany. The two were married after Jim was honorably discharged. Together, the couple raised two children, both of whom were young adults during Errol Trucking's peak in the 80s and 90s. Melissa, the oldest, was as intelligent as she was attractive and successful. She attended Baylor University, graduated with a degree in accounting, passed the CPA exam, and moved to Houston to begin working for a major public accounting firm.
By all appearances, Melissa Peelsticker had inherited her father's work ethic and desire to achieve. Melissa's younger brother Doug, on the other hand, was considered the black sheep of the family and had a very different approach to life. Doug Peelsticker was born around the same time as Errol Trucking, and he was the polar opposite of his father. Whereas Jim Peelsticker was kind and modest, his son Doug was smug and arrogant. Jim was hardworking and respected.
Doug was a slacker who rarely got out of bed before noon. Jim was in the business of flatbeds, but Doug was more interested in tanning beds. The Pillsticker men never shared a very close relationship, possibly due in part to Jim's long hours at the office and intense focus on his business, but also in part to the two of them not having very much in common to begin with. Jim Pillsticker was an avid hunter who loved the outdoors.
He would travel to remote destinations in search of exotic animals and spend his time and money on wildlife conservation and research. And he gave back to the community by being active with local businesses and charities. Doug Peelsticker liked to party. His only concerns in life involved women or his wardrobe. He was obsessed with his appearance on a narcissistic level, often spending thousands of dollars at a time on clothes and shoes. And of course, Doug's shopping habits were entirely funded by his father's business.
Many people close to the family have claimed that Carol Pillsticker enabled her son's personality and lifestyle. Doug was his mother's pride and joy, and he could get away with anything on her watch. Although somehow, in the late 1980s, Carol convinced her son to give college a try. Doug moved a few hours southwest of Tulsa to Norman, Oklahoma to attend his parents' alma mater, but he was not enrolled for long. Doug returned to Tulsa before the school year ended, but only because he had a different plan.
Assuming he was much more handsome and charming than he actually was, Doug Pilsticker decided to move to Hollywood to pursue a career in modeling and acting. Once he arrived in Los Angeles, the youngest Pilsticker began auditioning for jobs on a regular basis. He was landing parts and making a name for himself in the industry. Just kidding. Doug failed miserably. Most of his time in California was spent getting drunk and buying clothes.
In fact, on one particular shopping trip, Doug lost consciousness and collapsed in an elevator. Dude literally shopped until he dropped. After his health scare, Doug returned to Tulsa to be examined by his doctor, who then sent him to the Cleveland Heart Clinic where he was implanted with a heart defibrillator. Doug's career in Hollywood was over. While recovering in Tulsa, Doug would often visit the aero trucking offices, not to work or to learn but to collect his weekly allowance from his father.
Arrow employees would share unflattering nicknames about him between themselves as they watched him pull into the parking lot driving a different and newer vehicle every time. It's common knowledge that no matter where you work, nobody likes the boss's son. Although Doug's heart problems were real, proven by the fact that he had agreed to give up drinking and smoking for the time being, Doug made sure to milk his disability for everything that it was worth.
He used his father's money to hire help that would polish his shoes or organize his closet. He hired another person just to change the light bulbs in his room. Time flies when you're having fun. It is now 1998. Doug Pillsticker had dropped out of college a decade earlier, and at 29 years old, he was finally ready for his first real job. So naturally, Doug took the path of least resistance and started working for his father's company.
but not on the ground floor, as a truck driver. Years of collecting reckless driving tickets, speeding citations, and suspended licenses ensured that Doug's driving record would not allow for any position behind the wheel. Jim Pillsticker recognized that hazard and decided to place his son as far away from the vehicles as possible. He offered Doug a job behind a desk in the operations department. After only three months of showing up late and leaving early, Doug decided that he was ready for bigger and better things at Arrow.
He approached his father about taking on a different role. Doug's wish was granted. He was reassigned to vice president of the van division, and coworkers in his former department could not have been happier to see him leave. But Doug's new gig did raise a few eyebrows within the company. Doug was now a member of the executive team, for seemingly no other reason than having the last name "Pillsticker." It was classic nepotism. Now that Doug had the security and purpose of a career, he decided that maybe it was time to settle down and start a family.
So Doug began a search for a soulmate in the most obvious location, a strip club in Dallas, Texas. As soon as Doug walked through the door, he spotted something that he liked, a tall, blonde dancer named Susan. Doug began courting Susan in the most traditional way possible. He bought her a Porsche and had it delivered to her house on one of Errol Trucking's flatbeds. Doug's grand romantic gesture must have impressed Susan because they were engaged within months.
Jim and Carol Pilsticker were said to have been embarrassed that their son was marrying an exotic dancer. They told their friends that Doug and Susan met at a Blockbuster video store instead. Doug and Susan were married at the Holy Family Catholic Church in Tulsa, where the couple even received a special blessing from the Pope himself. As a wedding gift, Jim Pilsticker purchased the newlyweds a $1.3 million mansion on prime real estate near the Tulsa Philbrook Art Museum. A few months later, Susan was pregnant with twins.
All the excitement must have been a little too much for little Dougie's heart to handle. Because his health issues resurfaced in a big way, Doug had collapsed again and remained unconscious for a significant period of time. He almost died. Doctors were concerned about these new developments and informed Doug that he would no longer be able to drive, forcing him to hire a chauffeur to deliver him to and from work. Yes, Doug was still expected to work, much to his dismay. Maybe one day, when I own the company, he thought to himself,
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Jim Pilsticker and 10 of his closest friends and business associates from around Tulsa traveled to northern Canada on an expedition to hunt wild caribou. After a long first day of hunting in the snow and wind, the party of 11 decided it was time to head back to the lodge where they were staying near Hudson Bay in Quebec. The lodge was only accessible by airplane, so the group split up among two small single-engine six-seater airplanes and prepared for takeoff. Five men in the first plane, six in the second.
The first plane began its journey with the second only minutes behind. Once the lead plane reached its destination, it landed in the lake near the lodge and steered toward the dock where the hunters unloaded. The first group were basking in the warmth of a wood-burning stove when they heard the second plane touch down on the water outside. A few minutes passed and the men in the lodge realized that the second group of men had not yet joined them inside. Curious about the delay, a few of the hunters exited the cabin and journeyed outside to investigate.
They immediately spotted the second plane, but it was not parked at the dock like they assumed it would be. No, the second plane was in the middle of the lake, upside down and shattered into pieces, and there were bodies in the freezing water, but most of them were moving and appeared to be alive. Two of the men were hanging onto floating parts of the plane trying to keep their heads above water. Two others were hanging onto one another, with one keeping his injured friend from submerging while calling out for help.
The fifth body was lying face down in the water, motionless and unresponsive. The men on the shore helplessly observed the wreckage. There were supposed to be six men on the plane, seven including the pilot, but the men on the shore could only spot five, and it wasn't until rescue crews arrived that the sixth body and the pilot were found. They had been trapped inside of the cockpit, where they were either killed during the crash or had drowned.
Out of the six businessmen on the plane, Jamie Hagen, who worked for Nordum Group, an aerospace company, was the most fortunate. His only injury was a sprained ankle. Otherwise, he escaped the accident virtually unscathed. Hagen's boss Robin Siegfried, the president of Nordum's Enterprise Division, was on the plane as well. He had suffered two broken legs and was flown to Montreal for emergency surgery. Weirdly enough, this was not Robin's first experience being in an aircraft accident.
He and his brother were aboard a helicopter that went down during a hunting trip in Canada about five years earlier. Robin broke his back in that accident and was dragged from the flaming wreckage by two teenage boys who had witnessed the crash. Another passenger, Vince Westbrook, the director of tennis at the University of Tulsa, suffered a fractured ankle and multiple lacerations on his body. So did Mike Case, the president of Case and Associates.
It was reported that Case, despite his injuries, was the man who kept the others afloat while they waited to be rescued. The man found floating face down and lifeless in the water belonged to 50-year-old Charles Ryan, the president and chief operating officer of the Nordham Group, and the body found trapped in the cockpit, still wearing its seatbelt, belonged to Jim Pilsticker, the president and chief executive of Arrow Trucking Company. He was 63 years old.
Although most assumed the accident was weather related, there was never an official determination on why the plane had crashed. But one thing was certain, the Pilsticker family and the Aero Trucking Company were going to miss Jim dearly. A few weeks after Jim's death, Carol Pilsticker held a press conference to address the future of the company she had inherited from her husband. She explained that she had no intention of selling Aero Trucking and that she would assume the role of owner and chairwoman.
which was a good decision whether she realized it or not. As a minority or woman owned business, Arrow Trucking would receive many state and federal tax incentives that had been previously unavailable to the company. Carol's reign as head of Arrow Trucking was off to a good start. She was saving the business money already. But Carol followed that good decision with an absolutely horrific one. Carol announced that she would be a completely hands-off owner. She wanted nothing to do with managing the actual business part of the business.
Instead, Carol announced that she would leave the daily operations of the company to the new CEO, her 32-year-old son, Doug Pilsticker. The same 32-year-old son who had only been working at Arrow in a limited role for less than three years. The same 32-year-old son who in those three years couldn't be bothered to show up on time, if he even bothered to show up at all. The same son that Arrow employees made fun of as soon as he left the room. That guy was in charge now.
and the fate of 1,400 employees rested in his hands. The only person confident in Doug was Doug himself. When sharing the news, he reportedly told friends that he could finally run the company the way it should be run. The employees of Arrow Trucking were a bit concerned to say the least.
They were relieved that the company was not being sold, but considering how beloved the elder pill sticker had been, Doug had some very big shoes to fill. But really, how far could the apple fall from the tree? As it turns out, the answer to that question is pretty far actually. To her credit, Carol Pill Sticker did enlist some help and guidance for her son. She appointed two successful Tulsa businessmen to the company's board.
She also begged longtime employee Gary Jones to stay on at Arrow as the chief operating officer. Gary Jones had been Jim Pilsticker's best friend and right-hand man for years and had served as the company's vice president of operations during his tenure. Doug was not thrilled about his mother's appointments because he had his own plans for the company's executive staff. As CEO, Doug immediately fired many of his father's managers, many of which had worked at Arrow for decades.
Others were forced to retire. Some voluntarily quit. Doug quickly replaced them with long-term friends and acquaintances, none of which had any experience in the trucking industry. Joe Mowry was selected by Doug to be the executive vice president of Arrow Trucking. Joe had previously worked for Thrifty Rent-A-Car, where he served as the chief general counsel.
Doug also hired and fired two chief financial officers in a matter of weeks before finally settling on Jonathan Moore, Aero Trucking's controller at the time. Unlike the previous CFOs, Doug felt like he could control Jonathan, and Jonathan would tell Doug what he wanted to hear rather than what he needed to hear. The trio of Doug Pilsticker, Joe Mowry, and Jonathan Moore formed the brains, or lack thereof, behind the future of Aero Trucking.
Every major decision regarding the company's operations and finances would flow through them. And to their credit, by all appearances, the three of them appeared to be working hard. It was reported that they would spend almost every workday together in closed-door meetings. However, it was later reported by an unnamed Arrow employee that what the three men were actually doing huddled in an office all day together was watching porn. A literal circle jerk.
But those rumors were never substantiated. Which is fine by me. The new board members appointed by Carol Pilsticker could see the writing on the wall. Or what they hoped was writing on the wall and not something else, and promptly vacated their positions. Gary Jones, the newly appointed COO, was uncomfortable with the direction of the company as well. He retired less than a year into Doug's tenure. Doug Pilsticker spent his first year as CEO, completely erasing his father's legacy.
In addition to gutting the former staff, Doug removed every family photo and piece of memorabilia from his father's old office that he was now occupying. And with his mother's blessing, he sold the ranching, hunting, and conservation lands that his father owned, which netted about $6 million. Doug also decided to completely and unnecessarily renovate the executive office's reception area and front exterior of Arrow Trucking's headquarters.
He hired one of Tulsa's most renowned interior decorators for the project, which was rumored to have cost hundreds of thousands of dollars. The first red flag of many that suggested that maybe Doug did not know or did not care how to properly manage a company's finances. And before the paint had even dried on the remodeled offices,
Doug decided that since he was a hands-off type of manager, and he rarely interacted with employees or customers, there was really no need for his office to be near the loud trucks and equipment. So he leased an office space for himself in downtown Tulsa. Doug did not see any reason why he couldn't delegate from there. And for his trouble, Doug set his own salary at $1 million a year after taxes.
In fact, Doug did not want to bother with taxes at all, so he tasked the company's finance department with paying his personal taxes on his behalf. Doug would also receive compensation bonuses in addition to his salary, and he had access to the company's American Express card, which he would use very liberally for personal expenses. Although he expressed very little interest in the daily activities of the business, Doug had an intense interest in the daily activities of his wife Susan.
So much so, that he hired a private investigator to follow her around and provide daily surveillance reports on her movements. Susan's cell phone was bugged, and a GPS tracking unit was attached to her car. Doug was obviously a very jealous husband, and he suspected that Susan had been cheating on him while he was at work, and in perhaps the only example of Doug possessing any intuition or awareness whatsoever. His suspicions were confirmed.
The private investigator discovered that Susan was having an affair with a woman. Doug was infuriated and quickly filed for divorce. He used the surveillance reports and recorded phone calls in court to win full custody of their children. Having no other choice, Susan left her kids behind and returned to Dallas. After his divorce, Doug did not have to travel far to find a new partner. In fact, he never even had to leave his house.
Doug began courting the caretaker of his children, Jessica Turkovich, with a similar approach he had used on his ex-wife, expensive gifts and vacations. The new couple traveled to Aspen, Costa Rica, Miami, and St. Barts, courtesy of the Aero Trucking Company jet. Doug married Jessica in April 2008, down the street from his house at the Fieldbrook, in an extravagant event with almost a thousand attendees. The wedding cake was so large that it had to be transported to the building in pieces.
In the end, nobody's sure how much the wedding actually cost, but it didn't matter anyway because Errol Trucking was footing the bill. Immediately after the wedding, the couple moved into a 6,800 square foot mansion and spent an additional $200,000 remodeling it. They purchased multiple luxury vehicles, including a Bentley that required regular maintenance that was not available in Tulsa, so the car was hauled to Dallas every now and then using a wrecker service for $5,000 per trip.
The payments for the Bentley alone were $10,000 a month. Doug's new wife, Jessica, joined in on the spending frenzy as well. She received a breast enhancement as a wedding gift from her new husband, paid for by Aero Trucking, of course. In return, Jessica bought Doug a Ducati motorcycle, which she charged to the Aero Trucking company credit card. It's no coincidence that Aero Trucking had begun to experience major cash flow problems around this time. The company's vendors and suppliers were not being paid on time,
Some of them even started to require cash on deliveries, cash that Arrow Trucking did not have readily available. In response, the executives at Arrow instituted a rob to replace maintenance policy for its fleet. Equipment technicians would remove parts from non-operational trucks and use them to replace parts on functioning trucks. One major problem with this method is that there is no record of inventory for the parts that are removed or replaced, and the employees knew that.
It is estimated that more than $1 million worth of truck parts simply disappeared. But no need to worry, because Doug found another way to cut costs. He eliminated the monthly stipend that his sister Melissa received from the company, since she had never actually worked there. And he stopped paying alimony to his ex-wife. The 2008 recession, combined with rising fuel costs, put a strain on the entire trucking industry. A strain that veterans of the industry were quite familiar with.
Doug's father had navigated times like these masterfully during his tenure. It remained to be seen how Doug's team would fare. But they did discover a way to improve their cash position by accident. Arrow Trucking participated in what is known as "invoice discounting" or "factoring." Instead of waiting on their customers to pay their bills, Arrow would sell the debt owed to them to Transportation Alliance Bank at a discounted rate and collect cash immediately.
For example, if a customer owed Arrow Trucking $1,000, Arrow would sell that $1,000 receivable to the bank for $900. Arrow would receive $900 in cash upfront from the bank, and the bank would collect the $1,000 that it was owed from the customer at a later date. This is a totally legal practice. Many companies prefer to have the cash on hand to invest.
But in July 2009, an invoice with an overstated amount was erroneously sent to Transportation Alliance Bank. The bank paid the overstated invoice as it normally would without verifying the amount. And when the executives of Arrow realized what had happened and what could keep happening, they sprung into action. Jonathan Moore and Joe Mowry hired computer programmers to design a program that could create double invoices. The first invoice would reflect actual amounts and be kept in-house for the company books.
The second invoice would be inflated and sent to Transportation Alliance Bank to be exchanged for cash. Cash that the company had not actually earned. The bank caught on to the scheme fairly quickly and called Arrow's customers to verify the amounts. To the bank's surprise, the customers they spoke with confirmed that the invoices were legitimate and assured them that there were no issues. What the bank did not know, and would not find out until much later, was that they were not talking to actual customers.
They were talking to Aero employees who had been tasked to pose as customers. The bank had been given fake phone numbers by members of the Aero financial staff, all of whom had recently and coincidentally received raises in pay. Aero executives told the bank that there was no reason to worry, that the billing errors were made by a clerk who had since been fired.
Arrow Trucking's inflated invoice scheme continued for another six months, but the company still somehow exceeded its bank-imposed credit limit of $28 million. When Carol Pillsticker was given the news, she was shocked. She knew the company was having cash flow issues, but she did not know to what extent. Carol might not have been the most experienced business owner, but she knew that reaching the debt limit was a major problem. In an attempt to get the company back on track, Carol rehired her late husband's best friend, Gary Jones.
She also enlisted the help of her new husband, Larry Bump, who was a highly respected businessman in Tulsa. But most importantly, Carol fired her son. On his way out the door, Doug released a statement addressing his involvement with the company. It read, quote,
Doug's statement was laughed off by Arrow employees.
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Yesterday, Arrow Trucking went out of business, told all their drivers to park their trucks at the nearest Freightliner and go home. They had no truck, no job left three days before Christmas. And I just woke up at this quick trip truck stop and look at all these Arrow Trucks out here parked. There's a wrecker. Just dropped one off. Merry Christmas, Arrow Trucking assholes.
A few days before Christmas in 2009, 900 of Aerotrucking's 1,000 truck drivers were scattered across the country when they received a message on their in-cab messaging system. They read, quote, Company operations have been suspended indefinitely. There is no money for fuel or for repairs or expenses. Get home the best way you can.
One of Errol's drivers, Charles Lynch, was thousands of miles from home when he received the news. I was in shock. I was in total shock. I mean, I had no idea it was even coming. And I didn't know what I was going to do. I was listening to it on the radio and they say, oh, anybody that puts fuel in the truck is stupid and this and that. But stupid or not, I mean, it cost me $200, but at least I made it home. Fortunately for Charles, he had the means to make it home. But some of the other drivers were not as lucky.
Many of them were unable to afford the fuel for the trip home because their paychecks had bounced just days prior. Some of them abandoned their trucks at rest areas and hitchhiked home. Others dropped their rigs off at dealerships to be repossessed and tried to scrape up enough cash for a bus ticket to make it home in time for Christmas. And in a show of solidarity, once the news of Aero Trucking's demise had spread throughout the trucking community,
rival companies spring into action to take care of their fellow drivers by providing fuel, rides, hot meals, laundry services, and places to stay. I was very angry. I just can't believe that any company would treat their drivers this way. This company had to have known...
weeks ago this writing was on the wall and they just let it keep going. I don't have words to describe it, to describe the way I actually feel about it because it's just wrong.
We picked up aero drivers all over the country, helped transport them, trying to get them home for Christmas. There were a number of customers that had loads that they couldn't find. And so we spent several weeks locating loads and getting those transported to destination for customers as well. Back in Tulsa, the invoices had continued to increase both in quantity and dollars to the point where Transportation Alliance Bank decided to send auditors to the aero offices
The dual invoicing system was discovered, the bank filed a lawsuit, and the doors to Arrow Trucking Company were closed and locked permanently. As accountants, lawyers, and FBI swarmed the Arrow offices, Gary Jones was forced to deliver the bad news to the company's loyal employees. The wheels of every Arrow truck stopped rolling as Jim Pilsticker rolled in his grave.
Jim had spent 34 years building Arrow Trucking into a multi-million dollar industry-leading organization. It only took his son eight years to destroy it. I went to work for Arrow in '99 when Daddy was still alive. So he knew what he did. I hope him and his second wife are very happy. I got a few short words I can say. I should worry about his mom. That was her company, not his, what he did it to.
He'll get what's coming to him. Doug Peelsticker did get what's coming to him, but not immediately. He fled to Dallas after Arrow went bankrupt and his abandoned Tulsa mansion became overgrown with weeds. Within 30 days of being unemployed, he was already bouncing checks. But even at rock bottom, Doug continued to fall upwards. He accepted a six-figure position as the vice president of sales at True Pint Logistics.
the job that was offered to him after he claimed to have a relationship with all of Arrow's former customers, even though he had only met a few on occasion, and only by accident. Even though Tulsa, Oklahoma was in his rear view, Doug's problems were not going away. Transportation Alliance Bank wanted their money back. The bank's lawsuit alleged that Doug Pilsticker, Jonathan Moore, and Joe Mowry were responsible for defrauding them out of $12.5 million through the inflated invoice scheme.
and it was discovered that another nine million dollars which had been earmarked to pay federal income tax withholdings for arrow employees had simply vanished so had 13.5 million that had been loaned to the company by doug's mother carol and her new husband larry it's been a very very difficult case we had no schedules of assets and liabilities we didn't have records
In January 2012, the bank reached settlements with all of the defendants. Doug Pilsticker settled the $15.1 million claim against him for just $500,000. A slap on the wrist. And that was that. The bankruptcy case was closed, and Doug was ready to begin the next chapter of his life.
Not so fast.
On December 1st, 2014, nearly five years since Aero Trucking closed its doors, Doug Pilsticker and Jonathan Moore were indicted on federal charges. Joe Mowry was spared because Joe Mowry was dead. His body was found in his Houston home on December 14th, 2011.
Although the official cause of death is listed as a heart attack, some have suggested that Joe committed suicide as a way to avoid the repercussions related to the insurance fraud scheme he was involved in with his wife that fell apart at the same time as aero trucking. Who knows? Who cares? Jonathan Moore eventually pleaded guilty to one count of conspiracy to defraud the United States and one count of conspiracy to commit bank fraud.
He was sentenced to 35 months in prison and ordered to pay more than $21 million to the IRS and did one last slap to the face of aero trucking employees. Moore's reporting date was delayed so that he could spend the holidays with his family. Doug Pilsticker ultimately pleaded guilty to one count of tax evasion and one count of fraud. He admitted to misappropriating funds for personal use and claimed that he was aware of the phony invoicing scheme but did nothing to correct it.
Doug Pillsticker was sentenced to seven and a half years in prison and ordered to pay the IRS more than $21 million in restitution. This is Doug's attorney, Paul DeMuro.
We have a different view of the facts, but we respect Judge Purcell's decision. He had a very difficult case in front of him and we certainly respect it. We hope that this signals a new chapter in Doug's life and the end of an old chapter. And we hope that you and the media and the public can find a way in your heart to forgive and move on.
Doug Pilsticker's request for reduced sentence has been denied. He is scheduled for release on August 18, 2022.
Don't get lulled into a false sense of security, I guess, would be the biggest thing. We just all felt like Arrow had always been there, would always be there, and somehow it was going to work out, but it didn't. Swindled is written, researched, produced, and hosted by me, a concerned citizen, with original music by Trevor Howard. For more information about the show, you can visit swindledpodcast.com and follow us on Instagram, Facebook, and Twitter at swindledpodcast.
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