Shoreline Transportation files lawsuit against Pilot over rebate program

By Clarissa Kell-Holland, Land Line staff writer | 5/30/2013

A ninth lawsuit has been filed against Pilot Flying J, the most recent by an Alabama-based trucking company. They claim they are victims of the alleged fuel rebate scheme and are owed a significant amount of money by the largest truck stop chain in the United States.
Mike Bowling of the law firm Friedman, Dazzio, Zulanas and Bowling, located in Birmingham, AL, filed the complaint on behalf of Shoreline Transportation of Alabama USA Inc., of Greenville. It was filed in the Circuit Court for Butler County on May 28.
Bowling told Land Line on May 30, that Shoreline Transportation has been a long-term customer of Pilot Flying J, stemming back to the late 1990s before the Pilot-Flying J merger, but has been part of PFJ’s rebate program since before 2007. He said Shoreline Transportation has conducted its own internal audit and has concluded that it did not receive the full rebate amounts it was owed by Pilot.
“Based on the facts we all now know, this is one of the most egregious cases of intentional fraud we have ever seen,” Bowling said. “What makes it particularly troubling is that Pilot admits to targeting what it considered ‘less sophisticated’ companies with the hopes they would never be caught.”
Since the Federal Bureau of Investigation and the Internal Revenue Service launched its criminal investigation in mid-April, two Pilot sales executives have already pleaded guilty to their roles in the elaborate rebate scam. The unsealed FBI affidavit claims certain Pilot sales staff entered into rebate or discount programs with trucking companies for purchasing a certain volume of fuel each month, but then manually reduced the amounts they were owed.
On Wednesday, May 29, Ashley Judd, a regional account executive in Knoxville, pleaded guilty to mail fraud. On the same day, Arnold Ralenkotter, director of sales for the Northeast region, pleaded guilty to mail fraud and wire fraud charges, admitting that he “caused and approved the sending of fraudulently reduced rebate checks and fraudulently determined invoice amounts by mail and commercial interstate carriers to certain targeted Pilot customers,” according to court documents.
The seven counts listed in the Shoreline Transportation complaint against Pilot are conversion, violation of the Racketeering Influenced and Corrupt Organizations Act (RICO), conspiracy to commit racketeering activity, breach of contract, fraud, suppression, and damages and attorneys’ fees.  
“We are still reviewing the documentation necessary to calculate our client’s damages, but can tell you without fear of contradiction that Shoreline Transportation has what we consider to be a substantial claim,” Bowling said. “We are seeking to recover all that Shoreline Transportation is entitled to under the law based on the wrongful and, in some instances, criminal conduct of Pilot.”
Since news of the rebate scandal broke in April, Pilot CEO James “Jimmy” Haslam III, who also owns the Cleveland Browns football team, has been calling trucking company customers who might have been affected. Bowling said Shoreline Transportation has been among those called.
“One of the most disturbing facts is that Pilot continues to initiate contact with companies it knows are represented by counsel in an effort to circumvent the legal process,” Bowling said.

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