Pilot Flying J Reaches Settlement in Another Fraud Lawsuit

KNOXVILLE, Tenn. -- Pilot Flying J has brought to a close another chapter in its legal woes involving the company's fuel rebate program.

According to a report by the Knoxville News Sentinel, the locally based truck stop operator settled with Western Express, prompting Western Express to withdraw its lawsuit filed in Orleans Parish Civil District Court in Louisiana that alleged the trucking company had lost more than $75 million in rebates withheld by Pilot Flying J, including $68 million in expenses related to additional debt obligations it was forced to take on.

Paul Wieck, president of Nashville, Tenn.-based Western Express, told the newspaper Thursday that the lawsuit had been settled, but declined to disclose the terms of the deal.

"We never stopped our relationship with Pilot, and they're a great partner," he said. "They had some issues within their organization that they got worked out and it's our plan for that partnership to last a long, long time."

According to the news report, Western Express was named in a 120-page FBI affidavit that included the transcript of a secret recording of John "Stick" Freeman, Pilot Flying J's vice president of sales, boasting about being caught withholding $1 million in rebates to Western Express.

In the recording, Freeman said Pilot Flying J agreed to pay Western Express $1 million for a broken airplane to make up for the money it owed, but that the truck stop chain still came out way ahead. Freeman told a colleague that Pilot Flying J CEO Jimmy Haslam was aware of the deal, the report added. However, Haslam has denied he had any knowledge of the alleged fraud and has not been charged in the case.

Aubrey Harwell, an attorney for Pilot Flying J, has said the plane transaction "is not as some are trying to make it," but declined further comment because of a grand jury investigation, according to news reports.

Pilot Flying J's troubles began when federal officials raided its headquarters on April 15 as part of an investigation into allegations of fraud in its fuel rebate program. In the ensuing eight and half months, several former employees have pleaded guilty to criminal charges and the company has reached a class-action settlement to resolve 20-plus lawsuits filed against it since April, as CSNews Online previously reported.

Family-owned Pilot Flying J operates 650 travel center locations across the United States and Canada.