Arrow Trucking Co. executives reaped lucrative payouts from two insurance companies controlled by Arrow, yet the company could not make good on a wrongful death judgment when the time came to pay, a Tulsa World investigation shows.

Former Arrow CEO Doug Pielsticker, Chairwoman Carol Pielsticker and former Executive Vice President Joseph Mowry received hundreds of thousands of dollars in paybacks after investing a small amount in one company known as Altura Insurance Group Inc., according to records obtained by the World.

Former COO Robert Fitz-gerald, former CFO Rob Morris and former Executive Vice President Jon Bergstrom also were shareholders in Altura, said its owner Sherril Roberts, who is the wife of Joe Mowry.

Doug Pielsticker, Mowry and Chief Financial Officer Jonathan Moore are defendants in a civil lawsuit brought by an Arrow lender alleging fraud and racketeering by Arrow Trucking.

Altura is a licensed insurance broker created by Arrow officials about September 2005 to oversee the company's casualty, auto and accident policies, Mowry said. One year later, Roberts bought out all the shareholders including her husband, she said. Arrow Trucking was Altura's primary customer.

In two shareholder transactions, Doug Pielsticker and Carol Pielsticker cashed in on their investment when Altura was sold to Roberts.

In September 2006, about one year after Altura was set up, Doug Pielsticker sold his 47.5 percent in the company for an estimated $500,000, while Carol Pielsticker sold her 22.5 percent for about $250,000, Roberts said.

Meanwhile, Mowry invested about $1,000 in September 2005 and sold his holdings to Roberts about one year later for $100,000, he said.

However, the proceeds were to be paid out over four years so the Pielstickers and Mowry did not receive their full amounts because Arrow Trucking collapsed on Dec. 22, said Roberts, an insurance broker for 22 years.

It is not uncommon for a business to provide its own casualty and accident insurance and to pay premiums into that business and to reward its executives financially for cutting costs and saving the company money on claims, Roberts said.

"You have to understand that there was a lot of hard work in setting these companies up properly," Roberts said. "Joe and the others worked very hard trying to save the company and to control costs. They saved Arrow millions of dollars.

"It was not uncommon for us to start at 4 a.m. and work to 7 p.m. most days, trying to help the company stay alive," Roberts said. "These (insurance) companies managed risk, cut costs while also protecting the drivers and the customer in the event of a claim."

Doug Pielsticker's attorney has declined to comment.

Carol Pielsticker's attorney, Jim Sturdivant, said his client has been lending the company money in an attempt to keep it going.

"During the past two years, Carol has loaned Arrow a substantial amount of money to help pay the bills," Sturdivant said. "She was putting money in to help out."

The World obtained documents from Mowry's divorce from his ex-wife, Gretchen Mowry. The divorce documents detail Mowry's involvement in the formation of several insurers to handle Arrow's insurance needs. Other Arrow executives were also involved

in the companies' startup, court records show

.

Roberts agreed to an interview with the Tulsa World to discuss her husband's involvement in helping establish and oversee Arrow's self-insured businesses.

Mowry declined to answer specific questions about Arrow's operations unless they were related to the insurance companies.

While Altura was a separate company, Arrow paid all its insurance premiums through Altura to be deposited in Astraea Risk Retention Group Inc. and Thureus Insurance Group, two companies owned by Arrow and its subsidiaries and registered in Arizona, records show.

Mowry and Roberts said they have been wrongly portrayed in media reports and Web blogs.

"Joe and I have done all we can to help the employees get their employee records so that they can look for jobs and get their lives back together," Roberts said. "It is heartbreaking to watch this happen to the business and the employees."

Mowry said Arrow's collapse also left him jobless.

"I have no job, no car and no paycheck just like the other employees," Mowry said. "It is terribly frustrating to sit here and read about the perception that we were doing nothing to turn things around..''

In a lawsuit filed by lender Transportation Alliance Bank Inc., the Ogden, Utah, lender alleges that Doug Pielsticker "systematically looted Arrow Trucking with unwarranted expense reimbursements, excessive salaries and benefits, and other payments to support his lavish lifestyle."

Arrow Trucking, a 61-year-old flatbed carrier, halted operations after a primary lending bank shut down its fuel cards, stranding scores of truck drivers across America just three days before Christmas.

Meanwhile, the Pielstickers faced arrest for failing to appear in court involving a wrongful death lawsuit in Cleveland County.

In October 2009, the family of Ian Upchurch won a $50,000 judgment against Arrow and its insurer, yet Arrow failed to make good on the settlement, records show. The wrongful-death lawsuit alleges that an intoxicated Arrow driver, Michael Ivan Carranza, caused an accident that resulted in the death of Upchurch in June 2006 on Interstate 35 near Norman, records show.

The judgment was against Arrow Trucking and Astraea Risk Retention Group Inc., a second Arrow insurer that rewarded executives handsomely, records show.

As executive vice president of Astraea, Mowry received $50,000 from Astraea in 2007 as part of underwriting profit, records show. Mowry said that Doug Pielsticker received a similar if not greater payment.

As part of the Arrow collapse, Astraea Risk Retention and Thureus were taken over by the state of Arizona in December due to alleged insolvency and Arrow's failure to provide audited financials to the Arizona Department of Insurance, records show.

Court records show that Astraea failed to provide 2008 reports in a timely manner. In 2009, Arizona insurance officials contacted Astraea five times for failing to provide the annual audited financial statements, records show.

While Astraea was named as a defendant in Upchurch's death, Mowry said that Astraea was not responsible for the judgment.

"The settlement amount was to be paid by Arrow and not Astraea because of the deductible,'' Mowry said.


Omer Gillham 581-8301

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