Home > Article
VOL. 41 | NO. 44 | Friday, November 03, 2017
Trial underway for former execs of Haslam truck stop chain
CHATTANOOGA (AP) — A jury was seated Monday in the federal fraud trial of four former executives at the truck stop chain controlled by the family of Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam.
The trial, which is expected to last up to six weeks, follows a 2013 raid by federal agents on the Knoxville headquarters of privately-held Pilot Flying J.
Fourteen former members of the company's sales team have pleaded guilty to participating in a scheme to rip off trucking company customers they deemed too unsophisticated to realize they weren't receiving the rebates they had negotiated.
Pilot earlier agreed to an $85 million settlement with most of the defrauded customers as well as a $92 million penalty to the government. The Haslam brothers have denied any prior knowledge and have not been charged with any wrongdoing.
The company's former president and three members of the sales team are being tried in Chattanooga, about 100 miles (160 kilometers) southwest of Pilot's headquarters.
Those excused from serving on the jury included a former law partner of one of the attorneys involved in the case; a woman who is friends with a family close to Jimmy Haslam's children; and a man who said he would have a hard time keeping an open mind about the defendants because he knew that several other members of the sales team had already pleaded guilty and could testify against their former colleagues at trial.
Other potential jurors rejected by either the government or the defense included a truck driver, a man who works in a global accounting firm and several who said they had previously read or heard about the case.
Pilot was founded by family patriarch Jim Haslam, a former University of Tennessee football player, with a single gas station in 1958. By the time of the raid, the company had grown to become the country's largest diesel retailer, with annual revenues of $31 billion. In a surprise development last month, Pilot announced that it was selling a major share — and ultimately a majority stake — in the business to Warren Buffett's Berkshire Hathaway. At the time of that announcement, Pilot said it had $20 billion in annual revenues.
The Haslam family will keep its controlling stake until 2023, when Buffett's company will take over 80 percent of the company.
A 120-page FBI affidavit produced in support of the search warrant for the 2013 raid included transcripts of undercover recordings of Pilot employees discussing the scheme, often in crass terms. In one recorded meeting of regional sales directors at the lake house of John "Stick" Freeman, the Pilot vice president of sales told younger colleagues they should carefully target customers.
"Some of 'em don't know what a spreadsheet is. I'm not kiddin'," Freeman said. "So, again, my point is this: Know your customer."
Freeman, who was described in court documents as the architect of the scheme, was among four former members of the Pilot sales team who pleaded guilty in July and agreed to cooperate with federal authorities.
The remaining four going on trial are former President Mark Hazelwood, former vice president Scott "Scooter" Wombold and two other former members of the sales team, Heather Jones and Karen Mann.