Pilot Flying J Fraud Claims Case Goes Another Round

KNOXVILLE, Tenn. — A federal judge wants more information about the business arrangement between Pilot Flying J and several trucking companies before ruling on the locally based travel center operator's request to have outstanding lawsuits dismissed.

U.S. District Judge Amul Thapar asked attorneys to provide more details about what Pilot Flying J promised the trucking companies, according to The Associated Press. Pilot Flying J's continuing legal woes are tied to the company's fuel rebate program and allegations of fraud that came to light as a result of the April 2013 federal raid on its Knoxville headquarters.

Leonard Leicht, an attorney for trucking companies National Retail Transportation and Keystone Freight, said after the Jan. 9 hearing that the additional information requested by the judge would shed more light on the scope of the scheme. "We look forward to Pilot actually coming clean and giving us the exact information, which will enable us to calculate damages based on the actual cost of the fuel," he said.

Pilot Flying J attorney Glenn Kurtz declined to comment following the hearing.

According to the AP report, during the hearing, Kurtz disputed plaintiffs' claims that Pilot Flying J had committed fraud. Arguments by the trucking companies said that they didn't receive what they were entitled to under their contracts with Pilot. However, these arguments are "not enough" to justify the fraud claims, Kurtz said.

The trucking companies' allegations against Pilot Flying J include breach of contract and fraudulent misrepresentation.

To date, 10 former employees have pleaded guilty to a scheme to defraud customers. Pilot Flying J CEO Jimmy Haslam, who has maintained he had no knowledge of the scheme, has not been charged with any crime. Pilot Flying J has cooperated with the federal investigation. In July, the company reached an agreement with the U.S. Attorney's Office that allows it to avoid prosecution.

The agreement, titled a "Criminal Enforcement Agreement," is neither an indictment nor a finding of guilt. It clearly states the company will not be prosecuted under any current circumstances so long as the company complies with the terms of the agreement. However, individuals may still be prosecuted, as CSNews Online previously reported.

Over the two-year term of the agreement, in addition to paying the monetary penalty the government set at $92 million, the company also commits to keep the government advised of the status of its internal compliance program, which it voluntarily initiated immediately following the execution of the warrant.

Most of the lawsuits against Pilot Flying J were resolved by a class-action settlement, in which the retailer agreed to pay out nearly $85 million to 5,500 customers. However, the trucking companies involved in Friday's court hearing opted out of that settlement to pursue their own suits, the AP noted.

These remaining lawsuits were consolidated in U.S. District Court for Kentucky's Eastern District. The judge did not indicate how soon he would rule on the dismissal motion.

Pilot Flying J is a family-owned business that operates more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America.