Former FBI Director Working With Trucking Cos. vs. Pilot Flying J

Haslam tells trucking company executives he had no knowledge of rebate scheme

Published in CSP Daily News

Louis Freeh

KNOXVILLE, Tenn. -- Attorney Mark Tate of Savannah, Ga., law firm the Tate Law Group, which has filed a class action suit in Knoxville, Tenn., on behalf of Atlantic Coast Carriers, said former FBI Director Louis Freeh and his Freeh Group has agreed to work with trucking companies that claim they were cheated out of fuel rebates by Pilot Flying J, said The Tennessean.

Freeh's most recent high-profile job was with Penn State University, which hired him to investigate the Jerry Sandusky child sex abuse scandal, the report said.

The Freeh Group, Wilmington, Del., declined to comment to CSP Daily News.

Atlantic Coast Carriers Inc., Hazlehurst, Ga., filed a lawsuit on April 20 against Pilot Flying J in Knox County Circuit Court in Knoxville. Attorneys charged that Haslam was trying to short circuit Atlantic Coast Carriers' class-action lawsuit and asked a Knoxville judge to order Haslam to cease contacting trucking firms that may be victims of the alleged rebate scheme. The judge has denied the charge of witness tampering and a request for a restraining order that would have prevented Pilot Flying J from contacting customers.

Tate filed a lawsuit in Knox County (Tenn.) Circuit Court on behalf of Atlantic Coast Carriers against Pilot Flying J.

In a statement posted on its website, Tate Law Group said:

"Over the course of an investigation beginning in May 2011, the [FBI] determined that Pilot employees had been intentionally defrauding some of its customers by deliberately charging a higher price than what had been contractually agreed upon. According to recordings from inside informants, sales representatives were advised to commit rebate fraud by sending its customers less than they were owed and trained on how to determine which customers would have difficulty discovering the discrepancies. These same informants stated that the company maintained spreadsheets showing the amount owed to customers under their rebate agreements versus the amount actually paid. Federal agents searched the Knoxville headquarters last week looking for such evidence.

"The same recordings revealed that these actions were taken with the awareness and consent of Pilot executives, including [CEO] James A. "Jimmy" Haslam, III, president Mark Hazelwood, and [CFO] Mitch Steenrod.

"Atlantic Coast Carriers states through the complaint that they have been damaged because they were induced to purchase diesel fuel at a rate different than what was promised, and paid substantially more than the agreed-upon rate."

Click here to view court documents.

A lawsuit filed by Osborn Transportation, Gadsden, Ala., marked the sixth such case since federal agents raided Pilot's corporate headquarters in Knoxville, Tenn., on April 15.

Meanwhile, Haslam told a gathering of trucking company executives in Indianapolis on Thursday he had no knowledge of a scheme to withhold rebates, reported WATE-TV.

"Absolutely not. I will say absolutely not," Haslam said, according to a separate report by The Plain Dealer. "I was not aware of any of this."

Haslam was in Indianapolis for the 2013 Scopelitis Transportation Seminar, attended by approximately 400 trucking industry executives.

Haslam said his short-term goal is to make any wrongs against trucking companies right and to pay back money owed with interest.

He said there are 5,000 trucking companies involved in contracts with Pilot, and of those only 400 were involved with manual rebates. Of those, 250 saw an adjustment made.

"We are going to have a chief compliance officer. I take the blame for us not," said Haslam.

He said though the company's reputation has been damaged, oil companies continue to work closely with Pilot and the company is assuring customers they will continue to have the same high supply of fuel.

Pilot business is down 3%, Haslam said, but he blames that on a shrinking market.

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.