Truckers Say Database Key to $4 Billion Scam

By Walter F. Roche Jr.

Two trucking firms have charged that a database maintained by the country's largest truck stop chain is the key to uncovering the full details of a $4 billion rebate cheating scam.
In a 15-page filing in Franklin County Ohio Circuit Court lawyers for the two trucking firms, FST Express and HB Logistics, say that the database, known as SalesForce, is "the pivotal" issue in detailing how Pilot Travel "pulled off the largest fraud ever perpetrated in the trucking industry."
The filing comes after lawyers for Pilot asked the judge presiding over the case to strike from the record a single page from the disputed database. Pilot also wants the judge to block a motion by the trucking firms to force disclosure of the entire database.
The truckers contend that the full scope of the scheme to cheat truckers out of promised diesel fuel rebates has never been known but it dates back a decade.
The suit in Ohio is one of only two remaining civil suits pending since the rebate scheme became public when federal agents raided Pilot's Knoxville, Tenn. headquarters on April 15, 2013. Since that time 10 former Pilot sales staffers have entered guilty pleas to mail and wire fraud charges. Eight more face a 2017 trial on similar charges. They have all entered not guilty pleas.
In the Ohio case the trucking companies have charged that the scheme was even more lucrative for Pilot than charged by federal agents because Pilot inflated the price it actually had paid for the fuel in the first place.
Pilot has countered claiming the trucking firms knew the so-called base price was actually an industry standard.
In the filing this week the two truckers disputed that claim and said that the SalesForce database would prove that point.
"It (the database) will help plaintiffs refute Pilot's absurd suggestion that the amounts it admits it owes are merely the product of account discrepancies and not fraud," the filing states.
"The SalesForce entries tell the who, what, where, when, why and how of Pilot's long running  $4 billion fraud scheme," the filing charges.
The filing also asks the judge to reject Pilot's request to file yet another objection to the records request.
"Pilot is simply trying to have the last word," it concludes.
Contact: wfrochejr999@gmail.com

Stay Granted in Alabama Pilot Suit

By Walter F. Roche Jr.

An Alabama judge has granted a stay to Pilot Travel and it chief executive James A. Haslam in a longstanding suit in which a trucking firm charges it was cheated out of millions of dollars in promised rebates.
The stay halts most proceeding in the case pending the results of a related appeal in federal court.
But the decision by Mobile County Circuit Court Judge Sarah Hicks Stewart does allow lawyers for Wright Trucking to continue discovery, including depositions of key figures including Haslam.
The owner of the Cleveland Browns, has thus far rebuffed efforts to take testimony under oath about his knowledge of the multi-million dollar rebate cheating scheme.
Haslam, however, has repeatedly denied any knowledge of the rebate fraud, but his company already has paid out some $175 million to settle claims from truckers and to settle a complaint filed by the federal government.
The Alabama suit is one of two remaining legal claims against Pilot. The other, filed by two other trucking firms, is pending in a Franklin County Ohio court. In both the Ohio and Alabama cases, lawyers have initiated attempts to force Haslam to testify.
Stewart denied the stay sought by Brian Mosher, another former Pilot sales staffer, because he failed to perfect his appeal and failed to answer the original complaint.
In the ruling this week Stewart gave Mosher additional time to file an answer.
The two pending suits and a now settled class action suit in Arkansas followed a raid on Pilot's Knoxville, Tenn. headquarters by the FBI. An FBI agent later filed an affidavit in federal court detailing a widespread scheme by Pilot sales staffers to cheat truckers out of promised rebates.
While dozens of trucking firms agreed to a settlement, Wright, FST Express and HB Logistics opted out of the settlement and decided to pursue their claims in state courts.
Ten former Pilot sales staffers already have entered guilty pleas to mail and wire fraud charges and another eight have entered not guilty pleas and face trial in Knoxville, Tenn. next year. A recent effort for a change of venue in those cases was denied.
Contact: wfrochejr999@gmail.com

Ohio Judge Declines to Order Haslam Testimony

By Walter F. Roche Jr.

Concluding his intervention was not necessary, an Ohio judge has declined to issue an order to force Cleveland Browns owner James A. Haslam to testify under oath.
In a three-page decision issued this week, Franklin County Judge David C. Young cited Ohio and Tennessee statutes and court rulings that provide a means for two trucking companies to subpoena Haslam for a sworn deposition.
The two companies, FST Express and HB Logistics, are suing Pilot Travel Centers, the Haslam family owned truck stop firm, charging they were cheated out of millions of dollars in promised rebates on diesel fuel purchases.
In requesting Young to issue a commission to subpoena Haslam, lawyers for the truckers acknowledged that they could petition a Tennessee court directly to issue a subpoena.
Shawn J. Organ, one of the lawyers representing the truckers, said Friday they will now go directly to Tennessee courts to schedule the deposition.
Though he heads the nationwide truck stop chain, Haslam has stated repeatedly that he was unaware of a scheme by Pilot sales staffers to cheat truckers out of promised rebates.
The trucking firms, however, contend they need Haslam's testimony because those involved in the scheme, including former President Mark Hazelwood, reported to Haslam.
"Haslam should be able to shed light on how the fraud was conducted, why Pilot did nothing to stop it until the FBI raided Pilot's headquarters on April 15, 2013 and whether Pilot's top executives turned a blind eye to fraud," lawyers for the trucking firms stated in the petition seeking the subpoena.
Hazelwood is under indictment on mail and wire fraud charges along with seven other former Pilot staffers. They all have entered not guilty pleas. The charges stem from a federal probe of Pilot's rebate practices.
Ten other former Pilot sales staffers already have entered guilty pleas to mail and wire fraud charges and await sentencing in U.S. District Court in Knoxville, Tenn.
Citing rulings from the Ohio Supreme Court and Tennessee laws, Young wrote, "Upon review, court involvement is unnecessary in this issue. For the foregoing reasons plaintiff's motion for the deposition of Jimmy A. Haslam 3d is rendered moot."
FST and HB are two of three trucking firms still pursuing civil claims against Pilot. The third case was filed in Mobile, Ala. by Wright Transportation.
The rebate allegations have proven costly for Pilot, the country's largest truck stop chain. Some $175 million has been paid to settle claims filed by other trucking firms and the federal government.
Contact: wfrochejr999@gmail.com

Pilot Wants Judge to Block Record Requests

By Walter F. Roche Jr.

Pilot Flying J is asking an Ohio judge to block two trucking companies from getting access to thousands of internal documents and a computer database with information on the truck stop firm's other customers.
In a 16-page filing in Franklin County Ohio Common Pleas Court, lawyers for Pilot are charging that the 303 pending discovery requests by FST Express and HB Logistics are unduly burdensome and seek information that will ultimately have no bearing on the pending litigation.
HB and FST are two of the three trucking firms still suing Pilot over charges that the Knoxville based firm cheated them out of millions of dollars in promised rebates on diesel fuel purchases.
In the latest filing lawyers for Pilot stated that an audit showed FST is only owed $11,000 and HB actually owes Pilot over $100,000.
The charges against Pilot stem from a federal probe in which a government agent described a wide ranging scheme by Pilot sales staffers to cheat customers out of promised rebates. Pilot already has paid over $150 million to settle claims from truckers and the federal government over the rebate shaving allegations.
In its motion, Pilot noted that the federal agent's affidavit made no mention of FST or HB.
"Plaintiffs seek to recover a windfall by pursuing manufactured claims of cost fraud against Pilot," the motion states.
Pilot said it already has produced 59 gigabytes or 72,889 pages of documents but it is unwilling to provide records relating to some 5,500 other customers over a nearly 10 year period.
According to the motion, a federal judge in a related case already had rejected the truckers requests for the same information.
As for providing access to its internal database, called SalesForce, Pilot said that would require lengthy review to exclude confidential information.
"Plaintiffs cannot seriously suggest that Pilot simply hand over the entire database replete with confidential information and potentially privileged information for thousands of non-party customers spanning nearly a decade without reviewing it," the filing concludes.
The third pending suit against Pilot over rebate allegations is proceeding in an Alabama court.
Ten former Pilot sales staffers have already entered guilty pleas to mail and wire fraud charges stemming from the rebate fraud probe and eight others have been indicted and are awaiting trial. They have all entered not guilty pleas.
Contact: wfrochejr999@gmail.com

Browns Owner Sells Nantucket Property

By Walter F. Roche Jr.

Cleveland Browns owner James A "Jimmy" Haslam has sold his Nantucket vacation home for $6.7 million, more than $3 million less than the original asking price. In fact with the inclusion of an adjacent parcel in the deal, Haslam is getting $6 million less than his original asking price.
Massachusetts land records show the Haslam property was sold to the Jen Sankaty Lighthouse Trust. Michael Altman and Alexandria Stewart Altman are listed as the trustees. The Altmans reside in Bedford Corners, N.Y.
Haslam, the records show, took back a $5.5 million mortgage providing the financing for the transaction. The property is located at 37 Sankaty Head Road.
The deal also includes a second adjacent parcel for which Haslam was seeking an additional $3 million.
Haslam, who also heads the national truck stop chain, Pilot Flying J, first put the property on the sales block for just under $10 million in 2015. He purchased the property in 2006 for $3.85 million.
Real estate advertisements for the ocean front property show it has six bedrooms and a 2 bed room guest house.
Named "Southern Winds," the home was built after Haslam took ownership.
As listed on Sotheby's in early 2015 here is a description  of the property:

"Southern Winds" is a magnificent, Lyman Perry designed, ocean front estate with panoramic views of the Atlantic, Sesachacha Pond, Sankaty Head Lighthouse, Great Point, Nantucket Sound and town in the distance. With gorgeous custom finish work that is perfect in both design and execution, grand rooms that are magnificent in both scale and proportion, beautiful landscape design and breathtaking views from every room, this property - which includes a six bedroom main residence, two-bedroom guest cottage and garage - is a once-in-a lifetime opportunity for the most discriminating buyer.

Truckers Move to Force Haslam Deposition

By Walter F. Roche Jr.

Two trucking firms say they need Jimmy Haslam's sworn testimony to pursue claims they were cheated by the truck stop company Haslam heads and they will pursue it with or without the assistance of an Ohio court.
In an eight-page filing in Franklin County Ohio Common Pleas Court, lawyers for FST Express and HB Logistics said they would even seek to accommodate Haslam by not scheduling his deposition the week after Haslam's Cleveland Browns face the Pittsburgh Steelers.
"To increase the chances of catching Haslam in a good mood, plaintiffs will try to avoid taking the deposition during the week after the Steelers' game," the motion states.
The suit is one of two remaining against Pilot Flying J stemming from a federal investigation and the indictment of 8 top former Pilot sales executives. Ten others have entered guilty pleas. A filing in federal court in Tennessee by a federal agent describes a widespread scheme by Pilot staffers to cheat truckers out of millions of dollars in promised rebates.
The filing this week leaves it to Franklin County Judge David C. Young to decide whether he wants to issue an order to Tennessee court officials to facilitate a Haslam deposition.
"To be clear: it was not and is not essential that plaintiffs present such a request to obtain Haslam's testimony," the filing states, adding that "the court has the discretion to refrain from becoming involved."
According to the filing, a request for a subpoena can be sent directly  to the Tennessee courts.
The truckers dispute claims filed by Pilot Flying J that Haslam's testimony is unneccessary because he knew nothing about the rebate scheme.
"Haslam should be able to shed light on how the fraud was conducted, why Pilot did nothing to stop it until the FBI raided Pilot's headquarters on April 15, 2013 and whether Pilot's top executives turned a blind eye to fraud," the filing states.
Noting that former Pilot President Mark Hazelwood is among those indicted, the filing states that Hazelwood reported directly to Haslam.
Finally the filing notes that despite claims by Pilot's lawyers that Haslam is too busy running the company to be deposed, Haslam has indicated in an Alabama suit that he would be willing to be deposed.
In addition the filing notes Haslam has found the time to attend to the Cleveland Browns and give media interviews about a coaching change and comments at an NFL owners meetings.
"Unless Haslam's announced willingness to provide deposition testimony was merely a publicity stunt to create the appearance of cooperation, it appears Haslam does not share Pilot's concern that a deposition would pose an undue burden," the filing states.
Contact: wfrochejr999@gmail.com

Pilot Flying J Denies Charges in Ohio Suit

By Walter F. Roche Jr.

Pilot Flying J, the nationwide truck stop firm, says that it owes two trucking firms less than $13,500 in rebates and not the millions the companies are demanding in an Ohio civil suit.
In a 45-page response filed this week in Franklin County Court, lawyers for Pilot also denied that company CEO Jimmy Haslam had any knowledge of a scheme by some Pilot sales executives to cheat truckers out of promised rebates.
The long awaited response comes just after Franklin County Judge David C. Young denied a series of dismissal motions filed by Pilot and some of its former sales executives. Plaintiffs in the suit are FST Express and HB Logistics.
In its response Pilot called the charges, including fraud, unjust enrichment and breach of contract "vague and ambiguous. It is therefore difficult for Pilot to respond meaningfully to many of the allegations in the complaint."
Pilot "specifically denies plaintiffs were the victims of fraud," the filing states.
The suit is one of two remaining civil suits stemming from allegations that Pilot routinely cheated truckers out of promised rebates.
Those allegations surfaced following an FBI raid on Pilot's Knoxville headquarters. In a subsequent court filing an FBI agent, quoting from the transcripts of secretly recorded sales meetings, laid out a scheme to target truckers who were less likely to notice billing discrepancies.
Subsequently 10 former Pilot sales staffers entered guilty pleas and await sentencing. 
In the response filed in the Ohio case, Pilot lawyers said HB Logistics and FST Express were not targets of any such scheme.
"Pilot denies that the FBI affidavit specifically refers to plaintiffs," the filing states.
"Pilot further denies that its CEO Jimmy Haslam had any knowledge of any fraudulent actions," it continues.
The filing states that a subsequent audit found that Pilot owed FST less than $11,000 and HB less than $2,500.
"Pilot remains willing and ready to pay any amount owed plaintiffs," the response states.
Pilot is also being sued in a Mobile, Ala. court on similar allegations brought by Wright Transportation. It previously settled a class action case in Arkansas for $83 million. A $92 million settlement was reached with the federal government.
Contact: wfrochejr999@gmail.com