Cleveland Browns owner Jimmy Haslam was questioned under oath Tuesday by attorneys for two trucking companies over his role in an alleged fuel rebate fraud scheme involving his Knoxville-based truck stop chain.
In a videotaped deposition, attorneys for the trucking companies are seeking to discover what Haslam knew about the alleged fraud.
Sources say it's possible the deposition--described as lengthy--may not wrap up Tuesday and could continue into Wednesday.
Haslam has consistently denied knowing anything about the scheme and has never been accused of a crime.
Even so, Pilot Flying J has since paid out $85 million to 5,500 trucking companies in a settlement agreement and another $92 million federal penalties.
FBI agents raided Pilot Flying J headquarters in April 2013 and federal prosecutors have indicted 8 former employees--including a former president and vice-president--on fraud charges.
Another 10 former employees have struck plea deals with prosecutors.
The criminal case is scheduled for trial in October 2017.
Chip, Cooper & Elliot, council for FST Express and HB Logistics representing two trucking companies that did not take place in the class action lawsuit, issued a statement Tuesday:
“Today we obtained testimony from Jimmy Haslam under oath. To our knowledge, it’s the first time Mr. Haslam has given sworn testimony about the massive fraud Pilot engaged in, a fraud we believe exceeded two billion dollars.”
“This fraud was not addressed in the hastily-settled class action, which was resolved before Pilot was required to provide any documents or testimony. This fraud is about Pilot deceiving its customers about the definition of “cost” in its “cost plus” deals.”
“It’s unfortunate that Mr. Haslam dodged earlier efforts to get his testimony, but at least we now have some answers to questions trucking companies across the U.S. have been asking.”
“Regrettably, we can’t discuss the substance of Mr. Haslam’s testimony today. We can’t discuss it because Mr. Haslam insisted that his testimony be sealed and therefore shielded from public view. We plan to address this with the court in Ohio, and we encourage the press to do the same.”
“We do want to explain one thing: Jimmy Haslam did not voluntarily give testimony today. He did so only because he was ordered by a court through a subpoena.”
“To date, 18 Pilot employees have pled guilty to or have been indicted for fraud. Among them were Pilot’s President and its two Vice Presidents, all of whom were part of Mr. Haslam’s executive team.”
“The companies we represent aren’t seeking a windfall. They just want an answer to the question, ‘How could this massive fraud occur right under Jimmy’s nose?’ We believe it’s fair to ask the question, and we believe our clients deserve an answer. That’s why we took Mr. Haslam’s deposition today.”
“If Jimmy Haslam has nothing to hide, we encourage him to instruct his lawyer to make his testimony today public.”
Jimmy Haslam's attorneys sent this statement to News 5:
“I’m A. B. Culvahouse. I’m a partner with O’Melveny & Myers in Washington, DC, but originally I’m from Ten Mile, TN, and I’ve known the Haslam family since 1973. Our firm is representing Jimmy Haslam in this civil matter.
“We appreciate your interest today. Jimmy and I will make brief statements but will not be able to take questions given that this is an ongoing civil litigation.
“We just sat through a full day of questions from attorneys for the plaintiffs in this case. Our client openly and truthfully answered their questions.
“As Jimmy said from the beginning, he had absolutely no knowledge of any improper conduct related to customer fuel discounts and from the first day has done everything within his power to understand what happened and to make things right by his customers.
“As we previously said, we think this entire exercise today was nothing more than an effort by the plaintiffs to harass the company into a windfall settlement.
“It is important to understand that these three plaintiffs, in the apparent belief that this litigation might get them more money, opted out of a class action settlement more than two years ago that would have paid them any money owed on their fuel transactions with the company, plus interest.
“Our client voluntarily agreed to today’s proceedings to put this matter behind him and the company. We hope that is the case.”
