Pilot Flying J, Western Express Settle Rebate Lawsuit

Trucking firm president plans to continue doing business with truckstop chain

Western Express

KNOXVILLE, Tenn. -- A Nashville, Tenn., trucking firm has settled its lawsuit over rebate fraud by the Pilot Flying J truckstop company owned by the family of Cleveland Browns owner Jim Haslam and Tennessee governor Bill Haslam.

The Knoxville News Sentinel reported that Western Express Inc. has withdrawn its lawsuit filed in Orleans Parish Civil District Court in Louisiana that alleged the company had lost more than $75 million over diesel fuel rebates withheld by Pilot Flying J, including $68 million in expenses related to additional debt obligations it was forced to take on.

Since the FBI and IRS raided Pilot Flying J headquarters in Knoxville, Tenn., on April 15 to investigate the alleged scheme to cheat trucking companies out of rebates for diesel fuel purchased at the chain's more than 650 truckstops, seven Pilot Flying J employees have pleaded guilty in federal court to fraud-related crimes and nearly 30 trucking companies have filed lawsuits. At least 11 former employees already are cooperating with the FBI and offering evidence. Seven of them have entered guilty pleas to fraud charges, and four have obtained immunity from prosecution in return for their cooperation.

Paul Wieck, the president of Western Express, told the News Sentinel Thursday that the lawsuit had been settled, but declined to disclose terms of the deal.

"We never stopped our relationship with Pilot, and they're a great partner," he said. "They had some issues within their organization that they got worked out, and it's our plan for that partnership to last a long, long time."

Western Express was among several companies that declined to participate in Pilot Flying J's $85 million class-action settlement with 5,500 customers in November.

The company featured prominently in a 120-page FBI affidavit that included the transcript of a secret recording of John "Stick" Freeman, Pilot Flying J's vice president of sales, boasting of being caught withholding $1 million in rebates to Western Express, said the report.

Freeman said Pilot Flying J agreed to pay Western Express $1 million for a broken airplane to make up for the money it owed, but that the truckstop chain still came out way ahead.

Freeman told a colleague that Jimmy Haslam was aware of the deal, the report said.

Haslam has denied any prior knowledge of the rebate scheme and has not been charged in the case. Seven other former members of the Pilot Flying J sales team have pleaded guilty to federal charges, and two others have agreed to cooperate with investigators.

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.