KNOXVILLE, Tenn. -- Two trucking companies are accusing Pilot Flying J CEO and Cleveland Browns professional football team owner Jimmy Haslam of directly orchestrating a scheme to cheat customers out of promised diesel fuel rebates and discounts, reported the Associated Press.
The accusations against him come in a bill of particulars filed in federal court on November 14 by National Retail Transportation Inc. and Keystone Freight Corp.
The two trucking companies accuse Haslam of instructing his employees to tell the companies they would receive rebates while never intending to honor that commitment. The bill of particulars also claims that employees sent fraudulent rebate checks at Haslam's direction.
Knoxville, Tenn.-based Pilot Flying J, the largest operator of travel centers and travel plazas in North America, has more than 650 retail locations, with annual revenue of about $30 billion. Tennessee governor Bill Haslam also holds an undisclosed ownership share in the company, but has said he is not involved in day-to-day operations.
On April 15, 2013, the FBI and IRS raided Pilot Flying J's Knoxville headquarters, beginning an investigation into an alleged scheme perpetrated by some members of the company's sales staff to withhold rebates owed to trucking company customers for contacted diesel fuel purchases.
About a dozen participants have pleaded guilty to fraud and are cooperating with the authorities. Several executives have been fired.
Haslam has denied any knowledge of the rebate scheme.
Company spokesperson Tom Ingram told The Columbus Dispatch that he was not familiar with the claims made in this lawsuit, but "Jimmy Haslam has said from the beginning that he was unaware of any issues and that he would get to the bottom of it and deal with any issues."
A federal judge dismissed racketeering and deceptive trade practices charges against the company, and Pilot Flying J has reached an understanding with the U.S. Attorney's office, Eastern District of Tennessee, and the U. S. Department of Justice, that the company will not be prosecuted for fraud.
Pilot Flying J reached an $85 million settlement with hundreds of trucking customers who were affected by the alleged fraud; however, more than a dozen companies are pursuing lawsuits outside of the settlement.
Their cases were consolidated in federal court in Kentucky, where U.S. District Judge Amul Thapar on July 31 ordered the dispute to mediation.
The company will also pay $92 million as part of an agreement with the U.S. Attorney to avoid fraud charges.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.