RICO Claim and Big Guns Highlight Latest in Pilot Flying J Saga
May 30, 2013
Litigation against the truckstop chain Pilot Flying J continues to mount, while company officials have hired some big guns amid expectations the probe may soon widen.
Trucking company Shoreline Transportation, based in Alabama, has filed a lawsuit in federal court in Alabama under the Racketeering and Corrupt Organizations Act, according to published reports. Shoreline is based in Greenville, southwest of Montgomery, with federal records showing it has about 160 trucks in its fleet with nearly the same number of drivers.
Unlike other lawsuits that have been filed against Pilot Flying J since IRS and FBI allegations surfaced of a cheating customers out of fuel purchase rebates, this one is the first to involve alleged RICO violations and does not seek class action status. By alleging racketeering, it seeks to triple damages for any money the truckstop operator wrongly kept.
This is believed to be the ninth federal lawsuit against Pilot Flying J. Some of the lawyers in earler lawsuits have retained the services of former FBI director Louis Freeh and his firm as part of their own investigation.
Wednesday, two Pilot Flying J employees pleaded guilty to charges in federal court over their involvement in a scheme. A regional sales director along with an account executive have yet to be sentenced and are believed to be working with investigators, which could result in a lighter punishment. So far these are the only convictions.
The Commercial Appeal newspaper in Memphis reports this could be just the beginning of the effort by federal officials to prosecute the company further, with court documents claiming sales people were trained in how to defraud customers.
The Associated Press talked with one former federal prosecutor, Ty Howard, along with Nashville attorney David Raybin, both of whom are not involved in the Pilot Flying J case. Raybin said the two people who admitted guilt could be powerful witnesses for the government, who likely has its sights on those at the top of the alleged scam. Howard said he expects prosecutors to seek information from lower-level employees that will allow them to go after those at the top.
Pilot CEO Jimmy Haslam, brother to Tennessee Gov. Bill Haslam, has denied any wrongdoing or any knowledge of such a plot, but has also said the company will work with anyone who feels they may be due money. Gov. Haslam still holds a significant stake in the company, which reportedly did more than $31 billion in business last year, but says he hasn’t had a role in operations in many years.
Meantime Pilot Flying J president Mark Hazelwood has hired a big-name attorney, according to the Cleveland Plain Dealer newspaper.
Former prosecutor Rusty Hardin, who was the lead attorney for the so-called “Big Five” accounting firms, including Arthur Anderson, following the collapse of Enron, is representing Hazelwood. Hardin previously represented former Major League Baseball player Roger Clemens, who was found not guilty of charges that he lied to Congress about use of performance enhancing drugs.
Hazelwood is also being represented by another former prosecutor, now currently a Knoxville attorney, Gordon Ball, who was the attorney for the Butcher brothers and the bank scandal they were involved in, resulting in both eventually being convicted and going to prison in the 1980s.
Pilot Flying J vice president of sales, John Freeman, the newspaper reports, has hired Chattanooga attorney Roger Dickson. He represented Tyson Foods over charges it knowingly hired illegal immigrants, in which all charges against his clients were found not guilty. Freeman was alleged taped having conversations about Pilot Flying J's alleged illegal practices.
Edward Yarbrough, attorney for Arnold Ralenkotter, the regional sales director who admitted guilt on Wednesday, says about 25 attorneys, mostly on the criminal side, have been hired to defend Pilot Flying J or its employees.