A Nashville-based trucking company has filed suit in state court in Louisiana charging that Pilot Flying J cheated it out of $2.5 million in rebates and cost the company more than $73 million in added expenses.
suit was filed late this week in New Orleans by attorneys for Western
Express, a company featured prominently in a 120-page affidavit filed in
federal court by an FBI agent in April. The document laid out an
alleged multimillion-dollar scheme by Pilot sales executives to cheat
trucking companies out of promised rebates.
The 13-page complaint
charges that Pilot continually overcharged Western by up to 9 cents a
gallon from 2005 until 2013, when the alleged scheme became public. It
states that the various discount rates were spelled out in emails and
direct conversations with Pilot sales executives.
According to the
suit, Western purchased 90 percent of its fuel from Pilot and paid the
truck stop firm more than $1 billion over the eight-year period.
as an appendix to the suit is the FBI agent's affidavit, including a
transcript of a secretly taped sales executive session in which
then-Pilot Vice President John Freeman bragged about cheating Western
out of $450,000 a month in rebates. In the new complaint, Western's
attorneys cite a conversation in which Freeman asserted that Pilot CEO
James A. Haslam was in attendance and knew about Western.
addition to the allegation of cheating on rebates, the suit charges that
Western also was hit with artificially inflated transportation charges.
suit comes after seven Pilot sales executives entered guilty pleas
under agreements with federal prosecutors. The federal investigation is
After a raid of Pilot's Knoxville headquarters by FBI and Internal
Revenue Service officials in April, Haslam said he was launching his own
investigation of the rebates and denied any knowledge of a rebate
scheme. In a settlement agreement pending in federal court in Arkansas,
Pilot officials have acknowledged that they may owe up to $40 million
worth of rebates to trucking firms.
The FBI affidavit cites
statements by Freeman included in the FBI affidavit in which he
described how Pilot purchased a nonfunctioning aircraft from Western to
make up for some of the rebate underpayments.
But the suit filed
in New Orleans charges that Western, because of the loss of the promised
rebate money, ran into credit problems and was hit with added
penalties, interest and related expenses totaling more than $73 million.
"At all times," the complaint states, "the defendants acted willfully and with reckless disregard of Western's rights."
The suit charges Pilot with fraud and wrongful conversion and seeks punitive damages and reimbursement of legal fees.
Western suit is the latest of more than 20 filed against Pilot in state
and federal courts nationwide. Western's claims against Pilot suit are
the largest on record thus far.
The suits followed a tax-day raid on Pilot headquarters and the filing a few days later of the FBI affidavit.