Truckers Seek Pilot Fraud "Paper Trail"

By Walter F. Roche Jr.

Ohio trucking companies want a judge to order Pilot Flying J to turn over computer files they claim will provide a "paper trail" of fraudulent transactions used to cheat them out of millions of dollars in promised diesel fuel rebates.
In a motion filed this week in Franklin County court, lawyers for the three firms are asking the judge to compel Pilot to turn over the records of a computer software program called "SalesForce," which provides details on the handling of Pilot's rebates.
"SalesForce entries expressly detail the fraud scheme," the motion states.
The motion to compel is one of the latest developments in the handful of remaining civil cases against the truck stop firm stemming from a federal investigation that already has produced guilty pleas from 10 former Pilot sales staffers.
Pilot, meanwhile, is asking the same Ohio judge to deny another motion by the trucking firms to depose Pilot's top executive James A. Haslam 3rd.
In the motion to force the disclosure of computer records, the trucking firms, HB Logistics, FST Express and Dick Lavy Trucking, argue that the data will show the specific involvement of two former Pilot executives, John Freeman and John Spiewak, who dealt with their accounts.
"Sales Force contains a paper trail of the fraudulent statements Pilot employees made to customers," the motion states.
"With so many Pilot employees telling so many lies to so many customers, Pilot needed an up-to-date tool to track the lies," the motion adds.
Thus far, according to court documents, Pilot has refused to provide the data contending that it contains information not relevant to the three companies and that compliance would be overly burdensome.
The truckers contend that the damages suffered from the fraud claims alone total an estimated $1.9 million.
In addition to the Ohio cases, Pilot is facing a suit in Alabama filed by Wright Transportation. In that case a judge in Mobile is scheduled to hear arguments on May 13 on Pilot motions to end the suit.
The judge, however, has denied a motion by Haslam's attorneys to rescind an order that he undergo a deposition.
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Browns' Owner Fights Deposition in Ohio Rebate Suits

By Walter F. Roche Jr.

Having won a temporary reprieve from a deposition ordered by an Alabama judge, Cleveland Browns owner James A. Haslam 3rd is asking an Ohio judge to deny a motion to force his testimony in a separate suit brought by three other trucking companies.
Lawyers for Haslam this week filed a motion to block a deposition requested by three trucking firms that have charged that Haslam's Pilot Flying J truck stop firm routinely cheated them out of promised rebates.
In the suit in Franklin County Ohio the truckers last week said Haslam's testimony was essential and they asked for an order that would require Haslam's appearance at a deposition on May 11 in Knoxville, Tenn.
Haslam's lawyers responded by arguing that Haslam had no personal knowledge of the alleged rebate fraud scheme and that requiring his testimony would be unduly burdensome.
Just last week an Alabama judge rejected an appeal by Haslam of an earlier order requiring his appearance at the May 11 deposition. The judge did, however, agree to hear additional arguments on May 13 by Pilot's lawyers in the suit brought by Wright Transportation and to put off the scheduled deposition temporarily.
In the Ohio case brought by HB Logistics, FST Express and Dick Lavy Trucking, Haslam's lawyers stated that the May 11 deposition "has been deferred by the court in Alabama and it is unclear when or if that deposition will be rescheduled."
Haslam, the motion continues, "had no involvement with plaintiffs' accounts and he is a third party to the lawsuit."
Haslam's lawyers also argued that any deposition of him would be premature because there are pending motions before the court that could end the suit.
"Plaintiffs should not be permitted to depose Pilot's most senior executive when it is clear he does not possess unique firsthand knowledge regarding plaintiff's allegations," the motion states.
The deposition battle is the latest development in a handful of remaining civil suits stemming from charges that Pilot sales executives oversaw a longtime scheme to cheat truckers out of promised rebates.
The allegations already have cost Pilot more than $175 million to settle claims by other truckers and the federal government.
Ten former Pilot executives already have entered guilty pleas to mail and wire fraud charges and more than a half dozen others, including former President Mark Hazelwood, have been indicted and await trial.

Haslam Still Must Testify on Rebates

By Walter F. Roche Jr.

Cleveland Browns owner James A. Haslam 3rd still must undergo sworn questioning about his truck stop firm's rebate practices and the questions may come from four truckers, not just one.
Alabama Judge Sarah Hicks Stewart Friday denied Haslam's request to halt a scheduled May deposition on charges from Wright Transportation that Pilot Flying J routinely cheated truckers out of promised rebates. Meanwhile an Ohio judge is considering a motion that would allow lawyers for three other trucking firms to question Haslam at the same time.
The action comes in the four remaining civil cases filed against Pilot by trucking firms who opted out of a class action settlement with the truck stop chain with an $84 million price tag.
The suits stem from the disclosure of a federal grand jury investigation of charges that Pilot sales executives routinely shaved millions of dollars in rebates promised to high volume diesel fuel purchasers.
Haslam, who has repeatedly denied any knowledge of the rebate scheme, had sought to have the May deposition called off, contending his testimony was not required.
In Franklin County Ohio, FST Express, HB Logistics and Dick Lavy Trucking have asked a judge to order Haslam's testimony on their parallel claims of rebate fraud. The motion was filed this week.
Ten former Pilot sales staffers already have entered guilty pleas to mail and wire fraud charges stemming from the federal probe. Another eight were indicted earlier this year and await trial. They have all entered not guilty pleas.
In addition to the $84 million paid to settle the class action suit, Pilot has paid $92 million to settle related charges with the federal government.

Three More Truckers Want in on Haslam Deposition

By Walter F. Roche Jr.

Lawyers for three trucking firms, who have charged Pilot Flying J with cheating on promised rebates, are asking an Ohio judge to let them join in on a deposition of Pilot chief and Cleveland Browns owner James A. Haslam 3rd.
In a motion filed this week in Franklin County Court in Ohio, the three trucking firms are seeking to participate in a Haslam deposition scheduled for May 11 in Knoxville, Tenn,
Citing an affidavit filed in U.S. District Court in Knoxville, lawyers for FST Express, HB Logistics and Dick Lavy Trucking state that Haslam "has information relevant to plaintiffs' claims."
The motion comes in one of the few remaining civil suits stemming from allegations that Pilot routinely cheated on rebates promised to truckers. The allegations already have cost Pilot $175 million to settle claims from other truckers and the federal government.
In the eight-page motion, FST lawyers cite the transcripts of secretly recorded Pilot sales meetings in which sales executives discuss Haslam's awareness of the rebate skimming scheme.
The transcript includes a conversation in which then Pilot Vice President John Freeman states, "Oh he (Haslam) knew it. I called Jimmy and told him I got busted at Western Express."
Freeman was referring to a case in which a Nashville, Tenn. firm learned that it had been cheated on promised rebates.
The action in the Ohio case comes as Haslam already has been ordered to testify in a parallel case brought by an Alabama trucking firm.
"Haslam's deposition is already scheduled to take place that day (May 11) in Knoxville pursuant to an order issued by an Alabama court in a similar action," the motion states.
Lawyers for Haslam are fighting that order and have asked the Alabama judge to reverse the decision.
Wright's attorneys have responded by charging that Haslam has been dodging a deposition and that his testimony is critical in establishing a case against Hazelwood, the former president who reported to Haslam. Wright also cites the Freeman comments about Haslam's involvement in the federal affidavit,
Haslam has repeatedly insisted that he was unaware of the scheme to cheat on promised rebates.
Ten former Pilot sales staffers already have entered guilty pleas to mail and wire fraud charges and await sentencing. An additional eight former employees, including former President Mark Hazelwood, have been indicted and have entered not guilty pleas.
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Haslam Deposition Ordered in Rebate Case

By Walter F. Roche Jr.

An Alabama judge has ordered Pilot Flying J President James A. Haslam 3rd to be deposed in a suit brought by a trucking company charging that the truck stop firm cheated on promised rebates.
The deposition order, which Haslam already is appealing, comes in one of four remaining civil suits against Pilot stemming from a federal investigation that has already brought guilty pleas from 10 former Pilot sales staffers. An additional eight former Pilot officials, including President Mark Hazelwood, were recently indicted.
Under the order by Judge Sarah Hicks Stewart Haslam, who is also the owner of the Cleveland Browns, will be deposed in Knoxville, Tenn. on May 11 by lawyers for Wright Transportation.
Lawyers for Haslam have filed a motion asking the judge to reconsider her order.
In all four remaining civil suits, trucking firms are charging that Pilot secretly reduced promised rebates targeting firms that were unlikely to notice the discrepancies.
The other three suits are being heard in Franklin County Ohio.
In those cases lawyers for Haslam and Pilot are fighting to have notice of the recent indictments eliminated from the court record.
A notice of the indictments was filed recently by lawyers for FST Express.
In the Ohio cases, the trucking companies contend that Pilot not only secretly reduced rebates but also gave truckers false and misleading information about the cost Pilot actually paid to buy the diesel fuel in the first place.
In the motion to strike the indictments from the record, Pilot lawyers have argued that the information is not relevant to the civil litigation.
Pilot already has paid more than $175 million to settle suits filed by trucking companies and the federal government.

Haslam Loan Paid Four Years Later

By Walter F. Roche Jr.

Several years after it first came due, the wife of a well-connected Knoxville developer has paid off a $1 million loan from the father of Tennessee Gov. Bill Haslam.
Records at the Nantucket Registry of Deeds in Massachusetts show the Haslam loan to Ann Furrow, wife of Samuel F.  Furrow of Knoxville, was just recorded as satisfied last month.
The elder Haslam loaned the $1 million to Ann Furrow in 2011 during the same time period Sam Furrow and a group of investors were trying to sell an office building to the Pellissippi State Community College at a substantial profit.
The Furrow group purchased the Strawberry Plains building for $5 million and ultimately sold it the community college for $10 million in 2012.
The notice of satisfaction of the one-year loan comes some four years after it was originally due in June of 2012. Records at the Nantucket deeds office show the only recorded activity on the loan in the interim was a June 4, 2013 agreement by the elder Haslam to subordinate his interest in the property to a bank loan.
As first reported by the Tennessean, the purchase of the office building came despite the need for extensive repairs estimated at as much as $16.6 million.
In response to questions posed at the time, the governor, through a spokeswoman, said he was unaware of his father's loan to Ann Furrow. The collateral on the loan was a Nantucket property at 112 Baxter Road owned by Ann Furrow. Samuel Furrow transferred his interest in the property to his wife prior to the Haslam loan.
Dave Smith, spokesman for Gov. Haslam, said Monday the governor was not aware that the loan had been paid off.
Samuel Furrow, when asked about the sale to Pellissippi, described it as "clean as a whistle."
The loan was not the only Haslam interest on the Massachusetts resort island. Cleveland Browns owner James A. Haslam 3rd, brother of the Tennessee governor, owns an oceanside property on the island which has been up for sale for over a year. The current asking price for the home at 37 Sankaty Head Road is $9.99 million, according to real estate listings.

Haslam Deposition Sought In Pilot Rebate Case

By Walter F. Roche Jr.


An Alabama trucking firm is seeking court approval to force Cleveland Browns owner James A. Haslam to undergo a sworn deposition to obtain "critical" information in a suit charging rebate fraud.
In a motion filed in circuit court in Mobile, Ala., Wright has charged Haslam has "played games in an effort to avoid" being deposed.
Wright is one of four trucking firms still pursuing rebate fraud claims against Pilot Flying J, the family owned company that Haslam heads.
Citing an affidavit filed by a federal agent investigating Pilot's handling of promised rebates, the motion filed by Alabama attorney Stephen M. Tunstall charges that Haslam had knowledge of and participated in a scheme to cheat truckers out of millions of dollars in promised rebates.
The filing disputes claims by Haslam's lawyers that the Alabama court lacks the authority to force Haslam's testimony.
While avoiding court testimony, Haslam has repeatedly asserted publicly that he had no knowledge of the scheme to cheat truckers out of rebates.
In a recent filing in the Alabama litigation, Pilot's lawyers have asserted that "Mr. Haslam is not subject to jurisdiction in Alabama" on any of the allegations raised in the Wright suit.
Citing actions in a parallel federal court suit that was later dismissed, Wright charged that Haslam was using the same arguments that were rejected in the federal suit.
"Haslam's deposition is critical," the filing states.
In a related ruling in the same suit Judge Sarah Hicks Stewart has cleared the way for Wright to begin gathering evidence against former Pilot President Mark Hazelwood.
Hazelwood was one of several top Pilot officials to be indicted by a federal grand jury in Knoxville earlier this year.
Charged with conspiracy to commit mail fraud and witness tampering, Hazelwood and the seven other recently charged defendants have entered not guilty pleas.
Ten other former Pilot employees, however, have entered guilty pleas to mail and wire fraud charges and await sentencing.
Three other trucking firms have filed suit in state court in Ohio. Lawyers for the truckers recently filed notice that they intend to call Haslam as a witness in the upcoming trial.
Pilot already has paid some $175 million to settle suits filed by truckers and the federal government stemming from the rebate fraud allegations.
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