Default Judgment Issued Against Ex-Pilot Sales Exec

By Walter F. Roche Jr.


An Alabama judge has issued a default judgment against a former Pilot Flying J sales executive in a civil suit against the truck stop chain and its top executives.
A Mobile County Judge Sarah Hicks Stewart today issued the judgment against Brian Mosher, the former national director of sales for Pilot. Mosher already has entered a guilty plea in federal court to charges of conspiracy to commit mail and wire fraud. He is awaiting sentencing.
The ruling was issued in a suit filed by Wright Transportation, an Alabama trucking firm, that has charged that Pilot and certain of its executives, including CEO James A. Haslam, cheated the company out  of millions of dollars in promised diesel fuel  rebates.
The default judgment had been requested by Wright's attorney, Stephen M. Tunstall, who had charged that Mosher had falsely claimed that he was being forced to defend himself in two separate courts for the same charges.
Tunstall charged that Mosher, despite a court order, refused to file a response to the Alabama court action.
"Having failed to answer Wright's complaint, which has been pending for more than eight months, Defendant Mosher is in default," the Wright motion stated.
The Alabama suit is one of two remaining civil actions stemming from a highly publicized fuel rebate scandal. Charges that the company routinely cheated truckers out of promised rebates first surfaced after an FBI raid on the truck stop chain's Knoxville, Tenn. headquarters.
The other remaining suit is pending in Ohio and last week a Franklin County judge denied dismissal motions, which could clear the way for Haslam, owner of the Cleveland Browns, to be forced to testify for the first time about the rebate scandal.
Haslam has not been charged and has repeatedly denied he had any knowledge of the scheme. His deposition is also being sought in the Alabama case.

Ohio Judge Denies Pilot Motions to Dismiss

By Walter F. Roche Jr.

A Franklin County Ohio judge has flatly denied a series of dismissal motions filled in behalf of Pilot Flying J in a suit charging the Tennessee based firm with cheating two trucking firms out of promised rebates.
In a 17-page decision issued today Judge David C. Young said the trucking firms, FST Express and HB Logistics, had presented sufficient evidence to pursue claims that Pilot and two of its former executives engaged in charges ranging from fraudulent inducement to breach of contract and violations of state consumer protection laws.
The decision also denied dismissal motions filed in behalf of former Pilot executives John Spiewak and Arnold Ralenkotter.  Spiewak has entered not guilty pleas to mail and wire fraud charges. Ralenkotter has pleaded guilty and is awaiting sentencing on a charge of conspiracy to commit mail and wire fraud.
Charges against both stem from a federal grand jury probe into allegations that Pilot cheated truckers out of millions of dollars of promised diesel fuel rebates.
Young's ruling is the latest development in remaining civil suits brought against the Knoxville, Tenn. based truck stop giant.
Young's ruling is likely to lead to renewed efforts to depose Pilot's top executive James A. Haslam, who has repeatedly denied any knowledge of the scheme by Pilot sales executives to cheat unsuspecting truckers out of promised rebates.
Haslam, also the owner of the Cleveland Browns, at first resisted efforts to depose him but later said he would agree to questioning if a series of conditions were first met. His testimony is also being sought in a suit pending in Alabama.
"The court finds that the cause of action for fraudulent inducement is properly brought by plaintiffs," Young wrote.
The judge did strike limited language from a section of the complaint alleging unjust enrichment, but all other charges now go forward.
"The court finds that FST has sufficiently alleged a claim of breech of contract," the ruling states, "adding "FST has alleged actual and consequential damages as a result of Pilot's breech."
The ongoing civil litigation stems from charges in federal court documents, that Pilot sales executives routinely cheated truckers out of promised rebates. Subsequently 10 former Pilot sales staffers have entered guilty please to charges including mail and wire fraud.
Pilot also has paid some $175 million to settle related claims from other truckers and the federal government.

Indicted Former Pilot Exec Fights Subpoena

By Walter F. Roche Jr.




A former Pilot Flying J sales executive, who is under federal indictment, is asking an Ohio judge to issue a protective order barring a truck company from taking his deposition.
John Spiewak, who once served as an Ohio regional manager for the Knoxville based truck stop chain, says it would be inefficient for him to be deposed when he already has filed a motion to be dismissed from the pending suit.
Lawyers for FST Express, meanwhile, say that Spiewak's testimony is critical in pursuing the claim that Pilot cheated the transportation firm out of millions of dollars in promised diesel fuel rebates.
The crossfire is the latest development in the remaining civil suits filed against Pilot following disclosure of a federal grand jury probe of Pilot's rebate practices. Another suit is pending in Alabama.
Spiewak is one of eight Pilot executives to be indicted earlier this year on mail and wire fraud charges as a result of that federal probe. Ten other former Pilot officials already have entered guilty pleas to related charges and await sentencing. Spiewak has entered a not guilty plea.
In addition to the claim of inefficiency, Spiewak's lawyers cited a May 4 order in the case, which they claim put the entire case on hold.
FST's lawyers, however, dispute the contention that the order halted all proceedings.
"Spiewak intentionally misled and concealed from FST that Pilot was not using actual cost when calculating cost-plus discounts," the most recent filing states.
"The importance of Defendant Spiewak's deposition can not be understated. He is a critical figure in the fraudulent conduct at the center of this litigation," the FST filing states.
Spiewak's lawyer, however, argued that if his pending dismissal motion were to be granted, there would no longer be any need for his deposition.
Pilot already has paid out some $175 million to settle claims from truckers who claim they were cheated out of promised rebates. That figure includes a $92 million settlement with the federal government.
Contact: wfrochejr999@gmail.com

Pilot Trial Witness List Includes Haslam, Federal Agents

By Walter F. Roche Jr.

The potential witness list in an Ohio suit against Pilot Flying J includes Cleveland Browns owner James A. Haslam 3rd and two federal agents involved in a lengthy criminal probe of the nationwide truck stop firm.
The potential witness list filed late last week in Franklin County Court by attorneys for three trucking firms lists over 90 persons ranging from former Pilot executives who have already entered guilty pleas to unnamed confidential sources cited by federal agents in a filing in U.S. District Court in Knoxville, Tenn.
The filings comes in a civil suit filed by HB Logistics, FST Express and Dick Lavy trucking charging that Pilot cheated them out of millions of dollars in promised rebates and diesel fuel price reductions.
Pilot's lawyers along with co-defendants in the case also have filed potential witness lists including current Pilot employees and outside experts.
The Ohio suit is one of two civil claims currently pending against Pilot. A second is pending in Mobile, Ala., where Wright Transportation has asked a judge to order Haslam,  who heads Pilot, to undergo questioning.
Both actions stem from allegations that Pilot sales executives routinely and systematically cheated truckers out of promised rebates. Those allegations were spelled out in a lengthy affidavit filed in federal court in Knoxville over three years ago.
The affidavit was signed by FBI Agent Robert Root. Root and IRS agent Kevin McCord are both on the trucking firms' potential witness list.
The witness list filing states that it includes "all witnesses who plaintiffs may call as witnesses at trial or hearing in this case."
In addition to former Pilot staffers who have already entered guilty pleas like Arnold Ralenkotter, the list includes several other former employees who were recently indicted. They include former Pilot President Mark Hazelwood, who has entered innocent pleas to wire fraud and witness tampering charges.
Also included is former Pilot Vice President John Freeman who, like Hazelwood, was recently indicted and has entered an innocent plea to mail and wire fraud charges.
Still others listed include CHS1 and CHS2, confidential government informants cited in the Root affidavit.
The rebate fraud charges already have proven costly for Pilot with the combined cost of settling suits by other truckers and the federal government totaling over $175 million.
Attorneys for the trucking companies stated in the filing that they were reserving the right to supplement the witness list at a later date.
Contact:wfrochejr@gmail.com

Haslam Had Direct Involvement, Trucking Firm Charges

By Walter F. Roche Jr.

Evidence uncovered in a federal lawsuit showed Cleveland Browns owner James A. Haslam 3rd's "direct involvement" in targeting an Alabama trucking firm for "large scale pricing fraud," according to a motion filed today in Mobile, Ala.
The motion filed for Wright Transportation of Mobile also charges that Haslam's recent claim that he was willing to be deposed in connection with rebate fraud charges against Pilot Travel Centers was a publicity stunt.
"Haslam continues to dodge and delay as he has for the past three years," the filing states.
The filing, which comes before a scheduled Friday hearing, is the latest development in a handful of remaining lawsuits stemming from a federal probe of charges that the Haslam family owned truck stop chain routinely cheated truckers out of millions of dollars in promised diesel fuel rebates.
Haslam's promise to agree to a deposition came with a series of conditions and the Wright brief charges that those conditions would delay any deposition until late this year or early next year.
Noting that Haslam has never agreed to a specific timetable for a deposition, the filing states Haslam now "apparently intends to run out the clock."
 The motion calls on Mobile Judge Sarah Hicks Stewart to issue a second order calling for Haslam to be questioned under oath within 30 days. An earlier order for a May 11 deposition was temporarily set aside.
Responding to a joint motion filed by Haslam, Pilot and other defendants, Wright charged that during five months of discovery while the case was still in federal court "Wright uncovered Haslam's knowledge and direct involvement with (former Pilot President Mark) Hazelwood in targeting Wright and engaging in large scale pricing fraud involving thousands of transactions and massive losses."
Haslam has repeatedly denied any knowledge of the scheme to cheat on diesel fuel rebates.
Wright argues that it needs to question Haslam to pursue charges already leveled against former President Hazelwood.
"Haslam is the only person Hazelwood reported to," the filing states, noting that trucking executive is just about the only person involved in the case who has not either pleaded guilty to federal charges or been recently  indicted, as Hazelwood has.
Contact:wfrochejr999@gmail.com

Haslam Wants Lengthy Delay in Any Deposition

By Walter F. Roche Jr.

Lawyers for Cleveland Browns owner James A. Haslam 3rd claim he will agree to a limited deposition but the conditions attached to the offer would delay any questioning for months.
In a court filing Friday and in a letter to the attorney representing an Alabama trucking firm, Haslam's lawyer said his client would agree to be deposed but only after a related appeal pending in federal court is resolved.
The action comes in a series of civil suits filed by truckers who have charged that the Haslam family owned truck stop firm known as Pilot Flying J, secretly reduced promised rebates.
That federal case is not even scheduled for oral arguments before a panel of federal judges until the week of  July 11. In addition Haslam's offer would delay the deposition until at least 45 days after the federal court actually issues a decision in that case.
The offer comes as Haslam is facing demands that he appear to answer questions under oath in suits filed by four trucking companies in Ohio and Alabama.
In the letter to Stephen Tunstall, the attorney for Wright Transportation, Washington, D.C. attorney Stephen D. Brody said several other conditions would have to met before Haslam would undergo questioning including a seven-hour one day limit on questioning and allowing only one attorney to represent all four trucking companies.
"Mr. Haslam does not believe a deposition is warranted in either case," Brody wrote.
"We are disappointed in this gamesmanship, but eager to put it behind us," Brody added.
The offer comes as courts in Alabama and Ohio have been asked to require his testimony in the suits filed by trucking companies who have charged Haslam's Pilot Travel Centers has cheated them out of millions of dollars in promised diesel fuel rebates.
In the Alabama case Haslam already had been ordered to testify but his lawyers gained a postponement until after a hearing scheduled later this month.
In addition to Wright, claims have been filed in an Ohio case for FST Express, HB Logistics and Dick Lavy Trucking.
Pilot already has paid some $175 million to settle claims by other trucking companies and the federal government.

Judge Strikes Indictments From Pilot Civil Trial

By Walter F. Roche Jr.

An Ohio judge has ordered that a filing detailing the indictment of former Pilot Travel executives in federal court in Tennessee be stricken from the record of an ongoing civil case against the truck stop chain.
In a brief ruling issued Thursday, Franklin County Judge David C. Young granted the motion filed by Pilot to have notice of the recent indictments stripped from the record. The action comes in a suit brought by three trucking firms that have charged Pilot with cheating them out of promised rebates.
Lawyers for the trucking firms had filed notice of the recent indictment of eight former Pilot sales staffers by a federal grand jury in Knoxville, Tenn.
Pilot's lawyers had argued that the notice was improper and not germane to the civil litigation. Lawyers for FST Express, Dick Lavy Trucking and HB Logistics argued that the indictments demonstrated Pilot's improper method of handling rebates.
"The court finds Pilot''s arguments persuasive," Young wrote. "There is no basis in the civil rules to support this finding."
He wrote that the notice "provides nothing that has not already been complained of in the complaint which could be brought out in testimony if relevant and admissable."
Young also noted that he will hold off ruling on other pending motions in the case including a request to force Pilot owner James A. Haslam 3rd to testify in a deposition, until he rules on a pending motion to dismiss the suit.
The three firms have charged that Pilot routinely cheated them out of promised rebates on diesel fuel purchases.
The suits were triggered by the same federal probe that produced the recent indictments.