Defense to focus on Haslam relationship with conspirator
CHATTANOOGA, Tenn. (AP) — Cleveland Browns owner Jimmy Haslam’s relationship with one of the chief conspirators in a scheme to defraud customers at the truck stop chain controlled by the Haslam family is becoming a focus for the defense in the fraud trial of the company’s former president.
Fourteen former executives and sales representatives at Pilot Flying J have pleaded guilty in the case, including former vice president John “Stick Freeman,” whom prosecutors describe as the architect of the scheme to rip off unsuspecting customers of the country’s largest truck stop chain by shorting them on the rebates they had agreed to pay.
“I think the relationship between one of the conspirators and Jimmy Haslam will be highly relevant,” the Knoxville News Sentinel quoted defense attorney Rusty Hardin as saying in court on Thursday.
Hardin represents former Pilot President Mark Hazelwood, who is on trial along with a former vice president and two sales representatives.
Haslam has denied any prior knowledge about the scheme to defraud unsophisticated trucking company customers and has not been charged in the case.
Pilot agreed to an $85 million to settle lawsuits by most of the defrauded customers as well as a $92 million penalty to the government.
“Mr. Freeman was particularly close to Jimmy Haslam, wasn’t he?” Hardin said in his cross-examination of Arnie Ralenkotter, a former sales director who has pleaded guilty and testified on government’s behalf.
“It appeared that way,” Ralenkotter responded.
Ralenkotter agreed with Hardin’s suggestion that “John Freeman made it clear he wanted to be that man below Mr. Haslam.”
Ralenkotter had started working at Pilot in 1997 and testified that he was a sales supervisor when the fraud scheme began in earnest in 2008. That’s when Pilot executives decided to emulate discount programs offered by competitors and realized that fuel prices fluctuated so often that it “created an opportunity for us to keep some of that spread.”
“We kind of slid into it,” he said.
The trial continues on Monday.
Information from: Knoxville News Sentinel, http://www.knoxnews.com