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Saturday, October 10, 2015

Arrow Trucking and the Pielsticker legacy

newson6.com
Remember Arrow trucking and the sudden shutdown that left drivers stranded all over the country just before Christmas in 2009? I found this article thanks to Desiree Wood on linkedin.com. Credit to tulsaworld.com. Links provided:

14 years after plane crash kills father, son is due for sentencing

By MICHAEL OVERALL World Staff Writer

October, 2015  Swooping in for a water landing between periodic snow showers, the pontoon plane buzzed over a hunting lodge deep in the Canadian wilderness, 400 miles north of the U.S. border.
Hearing it just before sunset, the lodge manager expected the pilot to be in a hurry to get airborne again before dark. So when the plane hadn’t shown up at the dock after 20 minutes, he sent a boat to look for his missing guests.
Six wealthy Oklahomans were going to spend the night at scenic Mollet Lake after a long day of hunting caribou in northern Quebec. Exactly what went wrong has never been determined, but their single-engine plane ended up nose-down in the water with four injured passengers clinging to the fuselage in 34-degree weather.
A fifth passenger was floating face-down and lifeless, while the pilot and one more passenger were trapped inside, where they were either killed on impact or knocked unconscious before drowning, according to a Canadian accident report.
Much of the initial news coverage in October 2001 eulogized Charles Ryan, the 50-year-old president and chief operating officer of the Nordam Group. But it was the death of Jim Pielsticker, the 63-year-old chairman of Tulsa-based Arrow Trucking, that would set off a series of events that has kept the Pielsticker name on the front page for 14 years.
A tireless executive and savvy investor, Pielsticker took over the company in 1968, the same year his son, Doug Pielsticker, was born. Starting with just half a dozen rigs, he built it into a major corporation with 1,362 trucks, more than 1,400 employees and $250 million a year in revenue. Well-liked by his employees, he was known to come out of his office in shirt and tie to help load cargo, and he always made sure to ask about a co-worker’s children by name.
When news of the plane crash reached Tulsa, Arrow employees openly wept and clung to each other. But they had no idea how big a catastrophe their boss’ death was going to be for the company.
Eventually, some of those employees would be stranded hundreds of miles from home just days before Christmas in a shutdown that revealed a pattern of bank and tax fraud among top executives. Pielsticker’s son will be sentenced Thursday in federal court for his role in the company’s downfall.

‘Abandoned’

A few days before Christmas 2009, Donna Creekmore drove to work early for a scheduled meeting with upper management at Arrow headquarters, tucked away in an industrial area north of Interstate 44 on the west bank of the Arkansas River. She expected to be asked to take a pay cut, and while the sacrifice wouldn’t be easy, she had already decided to do it.
“It was family,” Creekmore says. “My blood ran green,” the color of the company’s logo, “like everyone else’s. We all loved that company.”
Instead, as she drove up to the truck yard that morning, she found a long line of wreckers at the front gate.
“They looked like vultures to me,” Creekmore says. Arrow’s entire fleet was being repossessed.
In hindsight, she should have seen it coming for months. In the summer of 2009, the company had overdue bills, and checks occasionally bounced. Several trucks sat idle, waiting for spare parts that, for some reason, nobody was authorized to order.
It was part of Creekmore’s job, as a drivers manager and executive assistant, to keep track of where all the drivers were going across the country. As far as she could tell, the company was doing plenty of business. Yet, by Dec. 22, the company had reached a $28 million credit limit.
“My biggest concern then,” Creekmore says, “was getting the drivers home. We were going to have people stranded all over the country.”
Most drivers didn’t live in Tulsa, but some had brought their rigs into the yard for maintenance. Workers frantically siphoned fuel into trash cans, then filled up any rig that was ready to leave — not to make deliveries, but to get the drivers home. Several got on the road before the wreckers came through the gate and put a stop to it, Creekmore says.
Later, inside the corporate office, she quietly printed out a list of all the drivers and where they were stranded, slipping it into her purse before casually walking past investigators. Technically, that list was Arrow property. Creekmore kept glancing in the rear-view mirror all the way home, expecting the police to pull her over.
“I was ready to go to jail for that,” she says. “There was no way I was just going to abandon those drivers.”
At home, with that list in hand, she opened a Facebook page to coordinate efforts to get drivers home for Christmas, an effort credited with helping hundreds of people.

‘Discrepancies’

Doug Pielsticker took over the company almost immediately after his father died in 2001. But more than a year went by before Creekmore laid eyes on him.
Thirty-three years old at the time, Doug Pielsticker had spent time working in various departments at Arrow, but former employees say he actually did very little. He had no experience running the business, and he would later describe his own management style as “somewhat removed,” according to court records.
That’s an understatement, Creekmore says.
“He was rarely ever seen,” she says. “And when he did come in, he looked like he had been sleeping in his clothes. If he came to a meeting, he would just sit there sniffing his nose and not say anything. I got the impression that he wasn’t even listening.”
Arrow couldn’t afford to repair trucks, Creekmore says. But when Doug Pielsticker couldn’t find a local mechanic to fix his Bentley, he spent more than $5,000 to have the luxury car towed to Dallas and back, according to court documents.
As paychecks began to bounce, Pielsticker spent $5,695.68 in one day at his favorite sushi restaurant; and in November 2009, the month before Arrow closed, he dropped $1,280.86 at a flower shop, according to court documents. He was also billing the company as much as $60,000 a month in travel expenses. And he used a portion of the company’s money to support a lavish lifestyle that included a $1.3 million mansion, expensive jewelry and one of the most extravagant weddings Tulsa has ever seen — with nearly 1,000 guests at the Philbrook Museum and a cake so tall it couldn’t fit through the door and had to be assembled inside.
He owed at least $400,000 in past-due child support and alimony to his ex-wife.
As irresponsible as that may sound, it probably wasn’t enough to drive the company into bankruptcy. The 2008 recession and a record spike in fuel costs put the entire trucking industry in a crisis. But in the summer of 2009, Arrow officials became so desperate for money that they resorted to a criminal conspiracy, federal prosecutors allege.
It began, apparently, by accident, when a clerk mistakenly overbilled the Transportation Alliance Bank of Ogden, Utah, which was basically fronting the cash for Arrow to make deliveries.
The bank didn’t notice the error and gave Arrow the money, which sparked an idea. Chief Financial Officer Jonathan Moore is accused of telling clerks to start overbilling the bank on purpose, assuming nobody would look at the invoices too closely. But the bank caught on.
In September 2009, a finance manager came to Tulsa twice to discuss “discrepancies” with Moore and General Counsel Joseph Mowry.
Arrow went out of business less than four months later, leaving Moore and Mowry, along with Doug Pielsticker, under federal investigation.

‘A long time’

On her way to Texas with a load of roof shingles, Deana Woods stopped to refuel in Matthews, Missouri, 150 miles south of St. Louis, where another Arrow driver called to warn her that “something weird is going on.” Deliveries were being canceled across the country, and drivers were being told to turn around and go back to their terminals.
Woods had just finished pumping $700 worth of diesel into her truck when she got a hold of Creekmore at the Tulsa corporate offices.
“Doug just closed the doors,” Creekmore explained, sounding as if she was on the brink of tears. “It’s over.”
Three days before Christmas 2009, Woods was suddenly unemployed and stranded 500 miles from home. Her Arrow Trucking credit card was canceled, leaving her stuck with the bill for the fuel.
“I didn’t have that kind of money,” she says. “What was I supposed to do?”
Hundreds of drivers across the country found themselves in similar situations. Some abandoned their trucks at rest areas or dropped them off at dealerships, where they could be repossessed. They hitch-hiked home or called relatives to come get them or scraped together enough cash for bus tickets. Or, in some cases, they drove their Arrow trucks home and told creditors, “If you want it, come get it.”
In Missouri, where Woods couldn’t pay for the fuel she had pumped, the truck stop called the police. She got a ticket and had to surrender her commercial driver’s license. But then the truck-stop manager, who was sympathetic after finding out why Woods couldn’t pay the bill, took her to breakfast. And as word spread that one of the biggest names in trucking had laid off its entire staff, other drivers began walking over and dropping cash on the table.
By the time she finished eating, Woods had enough money to get home to Chandler, Texas, near Dallas.
“The compassion and complete brotherhood in the driving industry started to really shine that day,” Woods says. “Doug Pielsticker, with all the money he had, didn’t care about us at all.”
She now works for another trucking company, but it took months to resolve the court case in Missouri and get her license renewed, and a long time after that to recover financially. Now, she says, it’s time for Pielsticker to pay.
“I’d like to see him go to prison,” she says. “And for a long time.”

‘Ruined’

Nearly 14 years to the day after a plane crash left him in charge of his father’s company — and six years after that company went out of business — Doug Pielsticker will face a sentencing hearing Thursday in federal court.
Most recently working as a real estate agent in Dallas, Pielsticker was indicted last year on 23 counts of conspiracy and tax evasion. A plea agreement last February reduced the list of charges to two.
Theoretically, Pielsticker could face up to 10 years in prison — five for each count. But he’s asking the court to go easy on him, saying other corporate officials were to blame. Pielsticker didn’t know about the fraud for four months, according to court records.
“Mr. Pielsticker found himself in the midst of fully developed schemes sponsored and supervised by his two most senior advisers,” according to the memorandum. “At that point, Mr. Pielsticker naively hoped that Arrow could perform its way out of the fraud” or find a way to pay back the money.
Moore, the company’s CFO, signed a plea agreement last year and will be sentenced next week. Mowry, the company’s general counsel who is accused of helping Moore orchestrate the scheme, died of natural causes in 2011.
Together, they conspired to defraud the bank and the IRS, while Pielsticker merely failed to stop the criminal activity when he found out about it, according to a sentencing memorandum.
Pielsticker told the court he has a medical condition that puts him “constantly at risk for a fatal heart attack,” offering that as another reason to be granted a light sentence or, better yet, probation or home detention.
Federal prosecutors urged the court last week to take into consideration that Pielsticker pleaded guilty and “assisted authorities in the investigation and prosecution of his own misconduct.”
Prosecutors, however, also pointed out that it’s one of the biggest federal fraud cases in recent memory, involving more than $10 million in taxes and more than $11.4 million from the bank, according to recent court documents.
“Combined, it involves a case of unprecedented scale,” prosecutors told the court, “especially in light of its relatively short duration. Few have stolen so much so quickly.”
U.S. Attorney Danny Williams is recommending six and a half to eight years in prison. Anything less than the maximum will disappoint former Arrow employees such as Thomas Packer, a 10-year driving instructor for the business.
“He ruined that company and didn’t care what happened to anybody else,” Packer says. “Whatever he gets, it won’t be enough.”


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