Judge sentences former Arrow Trucking CEO in multi-million dollar fraud case

Chief U.S. District Court Judge Gregory K. Frizzel sentenced former chief executive James Douglas Pielsticker to serve seven and one-half years in prison and pay a fine of $21 million for conspiracy to defraud the United States, bank fraud and tax evasion.    The former chief executive officer and president of Arrow Trucking Company has been sentenced to serve seven and one-half years in prison for conspiracy to defraud the United States, bank fraud and tax evasion.
   The Department of Justice said in a statement James Douglas Pielsticker, 47, was sentenced last week after pleading guilty earlier this year to a two‑count superseding information charging him with one count of a dual-object conspiracy to defraud the United States and to commit bank fraud and one count of willfully attempting to evade his individual income taxes for the year 2009.
   Chief U.S. District Court Judge Gregory K. Frizzell of the Northern District of Oklahoma also sentenced Pielsticker to serve three years of supervised release following his 90-month prison term and ordered him to pay $21 million in restitution to the Internal Revenue Service (IRS) and the Transportation Alliance Bank (TAB).
   “Corporate officers who willfully fail to report and pay over employment taxes and use that money for their own benefit are violating their obligations to their employees and the United States, stealing from the U.S. Treasury, and giving their companies an unfair advantage over competitors that comply with the law,” said Caroline D. Ciraolo, acting assistant attorney general of the Justice Department’s Tax Division. “Today’s sentence is a warning to those individuals who refuse to carry out their fiduciary duties that the United States will investigate them, prosecute them, and seek lengthy prison sentences for their crimes.”
   “Today’s sentencing reflects the Northern District’s strong commitment to ensuring that justice is served,” said Danny C. Williams Sr., a U.S. attorney for the Northern District of Oklahoma.“Along with our law enforcement partners we will aggressively pursue financial crimes. Mr. Pielsticker conspired to defraud millions of dollars in part for his personal benefit including a wedding and Bentley and Maserati automobiles.”
   According to the plea agreement and other court records, Pielsticker and others in 2009 conspired to defraud the United States by failing to account for and pay federal withholding taxes on behalf of Arrow Trucking Company and by making payments to Pielsticker outside the payroll system. Pielsticker and others withheld Arrow Trucking Company employees’ federal income tax withholdings, Medicare and social security taxes, but did not report or pay over these taxes to the IRS, despite knowing they had a duty to do so.
   The conspirators paid for Pielsticker’s personal expenses with money from Arrow Trucking Company and submitted fraudulent invoices to TAB to induce the bank to pay funds to Arrow Trucking Company that were not warranted. In total, the conspiracy caused a loss to the United States totaling more than $9.562 million.
    The government also said Pielsticker tried to evade his and his wife’s 2009 income taxes by causing Arrow Trucking Company to pay personal expenses on his behalf, causing his employer to under report his wages and other compensation on his W-2 form, and by preparing a fraudulent draft joint 2009 U.S. Individual Income Tax Return.