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.