Investigations

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Texas Trucking Companies Ordered to Repay $5.5 Million to State; Owners Jailed in Motor Fuel Tax Scheme

Bruce N. Nicholson and Bryan L. Nicholson, owners of several trucking companies and convenience stores located in the Lubbock, TX area, were sentenced in U.S. District Court in Lubbock for their involvement in a scheme to avoid paying state motor fuel excise taxes on several million gallons of fuel that they purchased and resold in Texas. Bruce Nicholson was sentenced to 42 months in prison and Bryan Nicholson was sentenced to 18 months after they pleaded guilty to mail fraud and wire fraud. Their sentencings will be followed by 36 months of supervised released. The Nicholsons’ associated companies, Allstar Trading, Inc., J & R Mercantile, Ltd., Rodgers Oil Co., and SunWest C-Stores Corp., also pleaded guilty to wire and mail fraud and were ordered to pay $5,553,176 in restitution to the State of Texas. The scheme involved the purchase of motor fuel falsely stated to be for export resale to the Navajo Indian Reservation, which is exempted from state motor fuel taxes. The Nicholsons then utilized their trucking companies to create false driver’s logs and transport manifests to make it appear as though the fuel was being transported for export. Instead the fuel was being used by their trucking companies and sold in their convenience stores without payment of the required state motor fuel taxes. OIG assisted the Texas State Comptroller’s Office and the FBI in this investigation.