Where will it end?
Federal agents have charged that of Pilot Flying J, the largest truck-stop chain in the country, secretly manipulated purchasing records, routinely cheated trucking companies out of millions of dollars in promised diesel fuel rebates.
Pilot officials and their lawyers say that despite the ongoing investigation, reams of adverse publicity and the abrupt departure of top sales executives, the company has been doing well, with annual revenues topping an estimated $28 billion. Ten of the company's former sales officials await sentencing on fraud charges.
"As a private company, we do not disclose those details, but business is very good," said Rachel Albright, a Pilot spokeswoman. The company has 20,000 employees and is No. 7 on Forbes' list of largest private U.S. companies
STORY: Pilot Flying J faces more lawsuits
STORY: 9 Pilot Flying J employees out amid federal probe
Pilot Chief Executive James "Jimmy" Haslam repeatedly has denied any knowledge of the rebate fraud and quickly vowed to pay truckers all they were owed plus interest. But a 120-page affidavit filed in federal court after the raid included transcripts of secretly taped sales meetings in which a top sales executive told his colleagues that Haslam did know about the scheme.
So the company's top executive, who also is the brother of Tennessee Gov. Bill Haslam and majority owner of the Cleveland Browns, has a huge stake in the outcome of the criminal case.
Tim Osborne of White House, Tenn., fills up May 22, ! 2013, at a Pilot Flying J Travel Center Nashville, Tenn.(Photo: Dipti Vaidya, The Tennessean)
On the civil side, court records show seven lawsuits are pending against Pilot over the rebates. Last week a panel of federal judges ordered those cases consolidated before a judge in Kentucky. Pilot lawyer Aubrey Harwell said companies that rejected a settlement offer could file up to 20 more civil suits.
Pilot's lawyers have accused Wright Transportation, based in Mobile, Ala., of going on a fishing expedition by issuing subpoenas for thousands of documents. They've asked the court to sharply limit the scope of those subpoenas.
Many of the civil cases were settled in a class-action suit in Arkansas in which Pilot agreed to pay $85 million, including 6% interest, to reimburse trucking firms for rebates they were never paid.
David Raybin, a Nashville criminal defense lawyer, said the plea deals from former Pilot employees indicate prosecutors are aiming higher and higher in the company echelons. He predicted the investigation could be completed shortly.
Noting that those who have pleaded guilty still await sentencing, he said it was likely that those defendants will be called on to testify against their superiors before they learn their fate.
Raybin and others familiar with federal criminal statutes said that despite the lengthy time since the investigation began, prosecutors aren't in danger of facing statute of limitation problems. Those limits don't expire until five to 10 years after the criminal activity.
As for the internal investigation Jimmy Haslam announced after the federal raid, Albright said it was ongoing. The company had been responsive to federal investigators.
They have asked for additional documents, and the company has complied with the request, she said.
"We've continued to cooperate, as we have from the beginning," she said.
A Flying J Travel Plaza in George West, Texas.(Photo: Pilot Flying J)
Status of the case
• 10 Pilot employees have entered guilty pleas to charges of mail and wire fraud.
• More than two dozen trucking firms have filed civil suits against Pilot over the rebate program.
• 13 trucking companies settled their suits, many in a class action with payments totaling $85 million.
• Seven federal suits against Pilot are set to be heard in federal court in Kentucky.
No comments:
Post a Comment