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Another customer of Pilot Flying J says no thanks to proposed settlement of fuel-payment shortages and instead sues. Chief Executive Jimmy Haslam, owner of the Cleveland Browns, is shown here about to address the media on April 19, four days after a federal raid on his company's Knoxville, Tenn., headquarters.
(AP Photo/Wade Payne)
CLEVELAND, Ohio -- An Iowa trucking company that figures in an FBI report used to raid Browns owner Jimmy Haslam's Pilot Flying J is the latest customer of the truck stop chain to sue for fraud.
McMullen Trucking Inc. and two related businesses based in Carter Lake, Iowa, filed a complaint against Pilot on Thursday in Knox County Circuit Court in Tennessee. Their lawsuit says Pilot deliberately understated what McMullen, McMullen Brothers Inc. and McMullen Truck Lines Corp. were owed in diesel fuel rebates, and that "the actions were taken with the awareness and consent of Pilot executives," including Haslam.
McMullen opted out of a proposed class settlement with Pilot customers pending in federal court in Arkansas, according to the lawsuit, which seeks unspecified damages.
"We don't have the level of detail to assess what our damages are," McMullen attorney Drew McElroy said.
The settlement agreement in Arkansas, brokered between Pilot and National Trucking Financial Reclamation Services of Little Rock, calls for paying truckers anything they're owed in rebates and discounts, plus 6 percent interest and attorneys' fees.
About two dozen truckers have sued Pilot since federal agents descended on the company’s Knoxville headquarters in April. The investigation into an alleged fraud scheme used several Pilot employees as informants.
Some trucking companies that sued have since joined the proposed settlement, but 13 customers have opted out, Pilot attorney Albert Harb said during a court hearing Thursday, according to McElroy, who was at the hearing.
In a parallel criminal investigation, seven Pilot workers have pleaded guilty and are expected to cooperate with prosecutors. Haslam said he had no knowledge of any fuel-price cheating and has not been charged.
McMullen’s name comes up in a conversation secretly recorded last November between one of the inside informants and Regional Sales Manager Kevin Clark. An excerpt of their conversation is in an affidavit released by prosecutors several days after the FBI raid.
“Did (Director of National Sales) Brian (Mosher) handle the McMullen deal, and the discount – and --,” the informant asks.
Clark: "No I, I did… Brian got with me, he told me exactly what they were doin'. Cause any of Brian's accounts, now, before I do anything, believe me, I check EVERYthing. 'Cause Brian has a lot of very shady accounts, varied deals, and I gotta watch what I do. 'Cause customers think they're getting one thing and they're getting a different thing… And it gets real confusing. So.."
Informant: "Right. He told you what to do with McMullen as far as the …"
Clark: "Yes."
Informant: "Sellin' the minus-3 and… "
Clark: "Yeah, yeah. He said, 'He'll never know.'"
The affidavit also describes Clark, who was based in Missouri, being directed by a supervisor to secretly alter the discount owned a trucking company.
Clark pleaded guilty in June to conspiracy to commit mail fraud and faces up to five years in prison and a $250,000 fine. Mosher has not been charged. His home in Bettendorf, Iowa, was one of three private residences of Pilot sales managers that were raided by the FBI.