Ninth Lawsuit Against Pilot Flying J Alleges RICO Violations
And 10th suit over fuel rebate scheme filed in Ohio
KNOXVILLE, Tenn. -- Greenville, Ala.-based trucking company Shoreline Transportation of Alabama USA Inc. has accused Pilot Flying J Inc. of violating the federal racketeering statute in the handling of its fuel-rebate program, reported The Plain Dealer.
Shoreline's lawsuit was placed in U.S. District Court in Montgomery, Ala., this week after it had been filed earlier in a state court, said the report. It was removed because of procedural issues. It accuses the company run by Browns owner Jimmy Haslam of breaching its contract and committing fraud in dealing with the trucking company.
"Based on the facts we all now know, this is one of the most egregious cases of intentional fraud we have ever seen," Michael Bowling, an attorney for Shoreline, told the newspaper. "What makes it particularly troubling is that Pilot admits to targeting what it considered 'less-sophisticated' companies with the hopes [it] would never get caught."
The lawsuit alleges Pilot Flying J's handling of the rebate program involved a conspiracy in which the company's employees committed mail and wire frauds. Under the federal Racketeer Influenced & Corrupt Organizations (RICO) Act, if a jury finds in favor of Shoreline, the company would be entitled to triple the damages and costs, including attorney fees.
It is the ninth lawsuit filed against the company amid a federal investigation involving the plan.
Haslam has said he had no knowledge of the scheme.
Two employees, have plead guilty--regional sales director Arnold "Arnie" Ralenkotter pleaded guilty to one count of conspiracy to commit mail fraud; regional accounts representative Ashley Smith Judd also pleaded guilty to conspiracy. They are the first to be charged in the investigation that went public with an April 15 raid on Pilot Flying J's Knoxville headquarters by FBI and IRS agents. Federal prosecutors allege members of Pilot's sales team deliberately withheld rebates on diesel fuel purchases to boost Pilot Flying J profits and to pad sales commissions.
And in the 10th suit against Pilot Flying J, Ohio Auto Delivery Inc. of Grove City, Ohio, filed suit in U.S. District Court, and it will go before Judge John Adams in Akron, Ohio, the Plain Dealer reported.
The automobile shipper accuses Pilot Flying J of breach of contract, fraud, unjust enrichment and violation of Ohio consumer-protection law. The suit, like others before it, seeks to be declared a class action representing trucking interests nationwide, or in this case at least in Ohio.
Pilot Flying J has more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America. Its network provides customers with access to more than 60,000 parking spaces for trucks, more than 4,400 showers and more than 4,000 diesel lanes, of which more than 2,800 offer diesel exhaust fluid (DEF) at the pump. Pilot Logistics Services is one of the largest independent energy logistics companies in North America, selling and distributing more than 1.3 billion gallons of refined petroleum products and serving more than 15,000 customers. Together, Pilot Flying J and Pilot Logistics Services generate sales of approximately nine billion gallons of petroleum annually.