Pilot CEO Haslam to Give Deposition in Suit Seeking Damages in Fuel Rebate Scheme
This story appears in the Dec. 5 print edition of Transport Topics.
An Ohio judge ordered Pilot Flying J CEO Jimmy Haslam to give a deposition Dec. 13 in connection with a lawsuit filed against the nation’s largest truck-stop chain by two carriers that have alleged they were victims of a massive diesel fuel rebate fraud.
Although Haslam has publicly denied knowledge of the rebate fraud, the deposition would mark the first time he has been required to answer questions under oath about allegations that already have resulted in 10 former Pilot executives pleading guilty and eight others facing federal trial late next year.
The deposition will be given in Knoxville, Tennessee, at the law firm of Ritchie, Dillard, Davies & Johnson.
Haslam fought an earlier attempt to depose him, but his attorney said he has voluntarily agreed to sit down with attorneys for FST Express Inc. of Columbus, Ohio, and HB Logistics of Birmingham, Alabama. The two companies filed their joint fraud civil action in an Ohio court last year.
“Mr. Haslam’s deposition is not warranted by the facts in these cases, and plaintiffs’ pursuit of his deposition is nothing more than harassment,” Haslam’s legal counsel, Knoxville attorney Steve Brody, said in a statement to Transport Topics. “As we advised the plaintiffs more than six months ago, Mr. Haslam is nevertheless eager to put this gamesmanship behind him and therefore voluntarily agreed to sit for deposition by the remaining civil plaintiffs.”
Brody added, “It is important to remember that these plaintiffs opted out of a class action settlement that would have paid them any money owed on their fuel transactions with the company, plus interest, in the apparent belief that litigation might get them a windfall.”
However, Chip Cooper, a Columbus attorney for FST Express and HB Logistics, said that Haslam did not volunteer to give the deposition but was ordered to do so by Franklin County Court of Pleas Judge David Young.
“The truth of it is, there’s a subpoena, which is a court order for him to appear,” Cooper told TT. “Absent some excuse that the court gives him, he’s obligated to show up on Dec. 13.”
Cooper declined to discuss the specifics of why his clients want to question Haslam.
“We think that deposing the person who was the head of the company that at the time was engaging in massive fraud speaks for itself,” Cooper said. “What we’re looking for now is answers that Pilot hasn’t provided. At the end of the day, we’re looking for a jury to hold Pilot accountable for what they did.”
It’s been more than three years since FBI agents raided Pilot’s Knoxville headquarters in April 2013.
Since then, 10 company executives pleaded guilty and agreed to cooperate with federal investigators but have not been sentenced. Another eight, including the former company president, Mark Hazelwood, are awaiting federal trial in Knoxville on charges related to diesel rebate fraud scheme that already has cost the company more than $170 million in lawsuit settlements and monetary criminal penalties.
No one is yet behind bars and it may be some time before sentences are actually handed down. U.S. District Judge Amul Thapar has ordered that the sentences of the 10 Pilot executives be delayed until after the Hazelwood trial, set for October 2017. Prosecutors could call them to testify in the trial.
Hazelwood and the other former executives indicted in February have pleaded not guilty.
Meanwhile, the more than a dozen attorneys representing Hazelwood and the seven other defendants have been sparring with federal prosecutors via legal motions in what has been classified as a “complex” criminal case.
Reviewing the volume and variety of information in connection with a case involving commodity price and discounts and accounting issues “will require months of effort and the use of sophisticated computerized document management and review tools to attempt to identify, view and organize relevant material for the trial of this case,” court documents said.
Defense attorneys, claiming their clients may not receive a fair trial in Knoxville, requested a change of venue to Nashville that Thapar, whose court is in Covington, Kentucky, initially denied. So far, Thapar has not agreed with claims by defense attorneys whose arguments were buttressed by a University of Houston professor who conducted a poll that he claimed showed the defendants could be prejudiced by pre-trial media coverage in Knoxville.
However, after a telephone conference last month, Thapar agreed to send a jury questionnaire to a sample pool of at least 120 jurors — not the actual jury pool — to determine the potential impact of pre-trial publicity.
The 58-page, 14-count federal grand jury indictment charges the eight defendants with conspiracy to commit mail and wire fraud.
Their alleged conduct involves the pricing and discounting of diesel fuel purchased at more than 500 truck stops across the country between 2008 and 2013, according to documents filed by government attorneys.
