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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Pennsylvania

Monday, October 1, 2018

Former Rite Aid Vice President Pleads Guilty In $5.7 Million Vendor Kick-Back Scheme

HARRISBURG –The United States Attorney’s Office for the Middle District of Pennsylvania announced that James W. Pilsner, age 60, of Harrisburg, Pennsylvania, former Vice President of Rite Aid, pleaded guilty today before United States District Court Judge John E. Jones, III, to vendor kick-back and tax evasion charges.

According to U.S. Attorney David J. Freed, Pilsner was charged in a criminal information filed on September 20, 2018, with one count of wire fraud and one count of federal income tax evasion.  Pilsner, a former Vice President for Advertising for Rite Aid, engaged in a kick-back scheme with Larry Nuckols and Vance Taylor, the owners of Nuvision, Inc., an Atlanta, Georgia based company, between 1995 and August of 2017. 

Pilsner entered into an agreement with Nuckols and Taylor whereby Pilsner would approve Nuvision’s invoices, some of which were false and inflated, for payment.  In exchange, Nuckols and Taylor would “kick-back” a significant portion of Rite Aid’s payments to Pilsner. 

Between 2001 and August of 2017, Rite Aid paid Nuvision approximately $45.3 million dollars.  Pilsner allegedly received no less than $5,124,862 in kick-backs over that time period, with another $634,300 paid to other Rite Aid employees designated by Pilsner.

The criminal information also charged Pilsner with Income Tax Evasion for tax year 2013.  In March of 2014, Pilsner filed an income tax return with the IRS that did not report his receipt of $411,500 in kick-back money during 2013, thereby avoiding approximately $157,648, in federal income taxes.  The information also seeks the forfeiture of Pilsner’s interests in $5,743,162 and his Harrisburg residence.

Today Pilsner paid $300,000 towards his tax restitution obligation for the period 2013-2017 of approximately $592,000, and agreed to pay the balance at sentencing. 

Nuckols’ initial appearance/arraignment and guilty plea is scheduled for November 20, 2018.  Taylor was indicted on 40 counts of mail fraud, wire fraud, and money laundering on September 19, 2018, and is awaiting his initial appearance/arraignment on the charges.

The case is being investigated by the Harrisburg offices of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation.  Assistant United States Attorney Kim Douglas Daniel is prosecuting the case.

A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The maximum penalty under federal law for Mail Fraud and Wire Fraud is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum penalty for Unlawful Monetary Transactions is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum penalty for Income Tax Evasion is 5 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.


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Financial Fraud
Updated October 1, 2018