3 Down, 4 To Go in Flying J’s Fraud Suit Legal Nightmareby Jana Ritter - Published: 3/12/2015
Today three of the seven trucking companies that filed federal lawsuits against Pilot Flying J have filed their notices of undisclosed settlement agreements with the giant truck stop and fuel chain. In 2013, FBI and IRS agents had raided Pilot Flying J’s Tennessee headquarters in connection with an alleged diesel rebate fraud scheme and seven trucking companies who were alleged victims of the scam filed suits soon after.
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The three carriers who announced their settled suits today are National Retail Transportation Inc., Keystone Freight Corporation and Shoreline Transportation.
A federal judge has dismissed all three cases contingent on confirmation of the settlements within a month. The tentative settlements now leave with Flying J with only four remaining trucking companies to contend with, in the consolidated civil lawsuit filed in federal court filed last year. The trucking companies claimed that Pilot Flying J cheated them out of millions of dollars in an ongoing fuel rebates that turned out to be fraudulent.
In July, Pilot Flying J had agreed to pay the government $92 million in civil penalties in order to avoid criminal charges. Unfortunately for Pilot employees, that hefty civil penalty payment only worked to protect the company and does not protect the individual employees from facing criminal charges. Already, 10 Pilot executives have been scared enough to plead guilty for their roles in the scheme and enter into plea bargain agreements requiring them to cooperate in the ongoing Federal investigation. Those executives have thus far cooperated and have yet to be sentenced.
Last September, Pilot Flying J’s former President Mark Hazelwood was also notified that he too was being investigated for his role in the rebate fraud. He has not yet faced any formal charges and neither has CEO Jimmy Haslam who has consistently and publically denied he was aware of any wrongdoing in his company. However, in February a federal judge had found enough evidence to “plausibly suggest” that Haslam and some of his company’s top officials likely had some knowledge and may have even managed the carrying out of the alleged fraudulent rebate reduction scheme.
That judge’s opinion and order is what also granted the seven trucking companies to continue their fraud suits claiming Pilot Flying J cheated them out of millions in fuel rebates. However, other motions filed by the trucking companies involving conspiracy claims were denied by the judge’s February ruling.