The last of several federal lawsuits filed against truck stop chain Pilot Flying J is playing out in the U.S. District Court of Alabama.
Trucking company Wright Transportation was granted a motion to dismiss its suit against Pilot Flying J on Oct. 27 so that the company could refile the matter at the state court. Attorneys for the truck stop chain filed a motion to appeal that decision although court documents do not indicate the reason for appealing. The court has not ruled on the appeal as of press time.
Wright Transportation was one of several trucking companies to file suit against the chain and its owner Jimmy Haslam after a 2013 raid by the FBI and the IRS. The raid exposed what law enforcement officials alleged was a scam involving fuel rebates paid to trucking companies that had the company’s fuel cards.
Pilot agreed to pay $92 million in fines and accept responsibility for the criminal conduct of employees in exchange for an agreement with federal prosecutors to avoid prosecution. The agreement does not prevent individual employees of the company from being prosecuted, however. The Knoxville, Tenn.-based travel plaza chain also agreed to an $85 million restitution plan to more than 5,000 rebate customers.
Seven companies, including Wright Transportation, opted out of that settlement and filed suit. Three of those seven companies settled with Pilot in the spring of 2015. Three of the remaining four were dismissed without prejudice due to lack of jurisdiction by the federal court in eastern Kentucky. Wright Transportation’s case was transferred to federal court in Alabama, where the company ultimately filed a motion to dismiss the suit at the federal level and to refile it with the state court.
Among the revelations in Judge Amul R. Thapar’s ruling in February was the judge’s statement that – based on the facts asserted by two New Jersey-based trucking companies alleging a RICO conspiracy on the part of the defendant corporations and individuals – it’s plausible that Haslam and other executives may have been aware of and helped continue the fraud scheme. Haslam has not been charged with any crimes.
The judge stated that at least four facts “plausibly suggest that some of the individual defendants managed or knowingly carried out the fraudulent rebate scheme.” Specifically:
- That Haslam and executives such as former national director of sales Brian Mosher, former regional sales director Arnold Ralenkotter, former sales vice president Mark Hazelwood, and former vice president of sales John “Stick” Freeman planned a 2012 annual meeting with “breakout sessions for teaching other employees to reduce rebates without detection”;
- That those individuals planned teaching sessions to train employees – or directly taught other employees how to do so;
- That Mosher, under orders from Hazelwood, told others to reduce rebates manually; and
- That Freeman hosted a meeting at his residence to “discuss how to perpetuate the fraudulent rebate scheme.”
Haslam has denied any knowledge of or involvement with the rebate scheme. Mosher and Ralenkotter are among 10 former PFJ employees who have pleaded guilty to fraud-related charges involving the fuel rebate scheme last year and are cooperating with authorities. Hazelwood and Freeman, who were both fired by the company in May 2014, received target letters from federal prosecutors last year, stating that prosecutors have “substantial evidence” linking them to crimes. Neither man has been charged.
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