Friday, March 25, 2016

Haslam Named as Witness in Rebate Suit

By Walter F. Roche Jr.

Cleveland Browns owner James A. Haslam 3rd has been named as a witness in a civil Ohio case in which his trucking company has been charged with cheating transportation firms out of promised rebates.
The witness lists, including Haslam, were filed this week in Franklin County Ohio where FST Express and two other firms have filed suit seeking recovery of lost rebates and other damages.
The witness lists include several former Pilot employees who already have entered guilty pleas to charges that they defrauded truckers out of promised rebates.
In addition to those who have entered guilty pleas and await sentencing, the lists include several former Pilot executives who were recently indicted in a continuing federal probe of the rebate fraud. That includes former Pilot President Mark Hazelwood who was indicted on charges of wire fraud and witness tampering.
The witness lists were filed as the anniversary date of a federal raid on Pilot Flying J's Knoxville is fast approaching. The widely publicized raid by FBI and IRS agents took place on April 15, 2013.
FST Express is one of three companies that filed suit against Pilot in Ohio after rejecting a proposed civil class settlement in federal court in Arkansas.
Those who have entered guilty pleas and are on the witness lists include Janet Welch, Arnold Ralenkotter and Brian Mosher.
In addition to Hazelwood the lists include recently indicted former Pilot sales vice president John Freeman.
Also included on the witness lists are two FBI informants, identified only as CHS-1 and CHS-2, and  an FBI agent, Robert Root, who was  involved in the lengthy investigation of the nation's largest truck stop chain.
It was a lengthy affidavit by Root filed in U.S. District Court in Knoxville that provided the first detailed public disclosure of the rebate fraud charges.
Ten former Pilot employees have entered guilty pleas and await sentencing. The newly indicted former employees recently had their cases delayed for some 14 months.
Haslam, whose brother Bill is the governor of Tennessee, has repeatedly denied any knowledge of the scheme to cheat truckers out of promised rebates. Secretly recorded conversations of Pilot's former sales executives include statements asserting that Haslam was present at meetings where the scheme was discussed.
The allegations of rebate fraud already have proven costly for the Haslam family held company. The class action settlement had an $84 million price tag and a subsequent settlement with the federal government cost the Knoxville firm $92 million.

Tuesday, March 8, 2016

Pilot Criminal Trials Delayed 18 Months

By Walter F. Roche Jr.

A federal magistrate judge has agreed to delay the trials of eight former Pilot Travel executives for 18 months due to the complexity of the case.
U.S. Magistrate Bruce Guyton Tuesday set an Oct. 24, 2017 date for the former Pilot employees including its one time president and a top sales vice president.
Guyton agreed to the delay at the request of lawyers for the eight defendants who were indicted last month following a multi-year investigation. The decision followed a status hearing in U.S. District Court in Knoxville, Tenn.
The indictments stem from a probe that first became public on April 15, 2013 when federal agents raided the truck stop chain's Knoxville headquarters.
 Subsequently 10 Pilot executives and sales employees entered guilty pleas to mail and wire fraud charges related to a widespread scheme to cheat unsuspecting truckers out of promised diesel fuel rebates.
Those charged last month include former Pilot President Mark Hazelwood and Vice President John Freeman.
Not charged was the company's top executive James A. Haslam, owner of the Cleveland Browns. Haslam, brother of Tennessee Governor William Haslam, has denied any knowledge of the rebate skimming scheme.
Although it has settled civil suits with dozens of trucking firms at a cost of $84 million, Pilot is still facing suits in Alabama and Ohio filed by truckers who refused to accept a court approved settlement.
Pilot also paid $92 million to settle claims with the federal government.
Still other suits have been filed against Pilot in Florida and Tennessee recently charging that the company routinely placed excessive holds on trucking company credit cards.