A trucking company has filed what is the first known lawsuit against truckstop operator Pilot Flying J stemming from allegations of fraud against its customers.
Georgia-based Atlantic Coast Carriers filed it over the weekend in Knox County, Tenn., according to published reports. The county is home to Pilot Flying J, based in Knoxville. It is seeking class action status to represent “all persons or entities who have sustained economic losses as a result of [Pilot Flying J’s] wrongful withholding of rebate funds.”
Following a raid on April 15 at Pilot Flying J headquarters by the FBI and IRS, affidavits and search warrants were unsealed claiming the company systematically bilked customers out of rebate money and discounts they were due in a fuel purchase program without their knowledge. (See Friday's story, "Federal Probe Alleges Pilot Flying J Defrauded Customers.")
The suit mirrors many of the criminal allegations in the affidavits and warrants, with court papers saying Pilot Flying J “adopted ... and benefitted from inaccurate rebate procedures for certain clients, including Atlantic Coast and several other clients.”
A statement released through a Pilot Fying J spokesperson said, ““Pilot Flying J’s counsel has advised them that it is not unusual for lawsuits like this to be filed. They are reviewing it and will defend it accordingly.”
Trucking company customers of Pilot Flying J have responded to the allegations with reactions varying from disappointment to shock, according to published reports. Nashville-based Western Express told the Knoville News-Sentinel that it buys more than $100 million worth of fuel from the truckstop annually and that the company is going to look into how much money it is possibly owed.
“We feel like they got us,” Titan Transfer Inc. owner Tommy Hodges told the Tennessean newspaper. “We fit the profile of exactly what they were doing. We were in the rebate program, and we always had a tough time reconciling the checks we were getting with our records of fuel purchases.”
The investigation into Pilot Flying J began nearly two years ago, with information coming to the FBI from confidential informants inside the company. Pilot Flying J CEO Jimmy Haslam has been named in the alleged scheme, among others officials. No arrests have been made.
Haslam has denied charges of any wrongdoing and has reportedly ruled out stepping down.
Jimmy Haslam is also the owner of the Cleveland Browns football team and the brother to Tennessee Gov. Bill Haslam, who still has a financial stake in the company, though it’s been managed in a blind trust since he left the business 15 years ago.
NBC Sports reports Pilot Flying J has hired lawyer Aubrey Harwell Jr. of Nashville. Harwell represented one-time San Francisco 49’s owner Eddie DeBartolo who was involved in the corruption case of former Louisiana Gov. Edwin Edwards. DeBartolo pled guilty to a charge of failing to report a felony, and received a $1 million fine and two years of probation in return for his testimony against Edwards, who was on trial for extortion and other charges, including the $400,000 he demanded from DeBartolo to gain a river boat casino license. DeBartolo never received the license, was fined by the NFL, and barred from active control of the 49ers for one year. He eventually agreed to a settlement in which he gave up controls of the 49ers in 2000, ceding control of the team to his sister.