Judge Rules Pilot Racketeering Charges Can Go Forward

By Walter F. Roche Jr.

In a key decision a federal judge has ruled that trucking companies can continue their claim that Pilot Travel  Centers engaged in racketeering, fraud and conspiracy when it secretly reduced millions of dollars in promised diesel fuel rebates.
In a nearly 80-page decision issued in Kentucky, District Judge Amul Thapar also ruled that the companies can continue to pursue some, but not all claims against current and former Pilot employees, including its top executive and Cleveland Browns owner, James A. Haslam.
In the lengthy decision Thapar found that two New Jersey companies, National Retail Transportation and Keystone Freight, had presented sufficient evidence to go forward with claims that Pilot had engaged in racketeering, violations of both federal and New Jersey law.
Citing the allegations by the two firms, Thapar wrote that they "are sufficient to show that Pilot defendants and Propeller (an affiliated firm) knowingly carried out the decision to send fraudulent checks on behalf of the enterprise."
Leonard Leicht, an attorney for the two New Jersey firms said that as a result of the ruling virtually all of the charges against Pilot, Haslam and former Pilot employees will go forward.
"Pilot's efforts to delay this case are over" Leicht wrote. "We look forward to engaging in discovery with Pilot and finally obtaining all of the underlying documents which have never been produced."
Aubrey Harwell, Pilot's attorney, said he was pleased that the judge had dismissed many of the claims, adding "We believe the plaintiffs' remaining efforts to collect excessive damages and attorney fees lack merit. We intend to continue to defend against them vigorously.” 
Thapar concluded that a third company, Shoreline Transportation of Alabama, had not provided sufficient evidence to support a racketeering charge.
Nonetheless the judge did find that all seven firms that sued Pilot, the national truck-stop firm, could pursue some of their claims under a variety of state and federal statutes.
The seven firms continued their claims after rejecting  an $85 million class action settlement approved last year by a federal judge in Arkansas. Pilot also agreed to pay $92 million to the federal government to settle civil charges.
In a key section of his decision, Thapar concluded that the trucking firms could rely on a lengthy affidavit filed in U.S. District Court in Knoxville stemming from a federal probe of Pilot's rebate skimming practices.
He said the fact that the affidavit did not specifically mention National Retail and Keystone was "not dispositive of their claim," adding that Pilot attorneys had overstated the legal requirement for a conspiracy claim.
He also noted that the plaintiffs did not rely solely on the affidavit.
While granting Pilot's motions to dismiss of some claims, including those under state consumer protection laws, Thapar found that some of the claims of fraud and contractual violations can go forward. He also rejected the argument by Pilot that the trucking firms had failed to provide sufficient details of the alleged fraud.
The decision comes as a federal investigation into the rebate fraud charges continues. Thapar is presiding over the grand jury conducting that probe. Already 10 former Pilot sales officials have entered guilty pleas to mail and wire fraud charges and await sentencing.
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