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Pilot Flying J's former national sales director, Brian Mosher, has admitted his role in rebate fraud at the truck stop chain, leaving questions about what the executives above him knew.

(Plain Dealer file photo)

CLEVELAND, Ohio -- Lawyers for Pilot Flying J CEO Jimmy Haslam and company President Mark Hazelwood said their clients have never received "target letters" that federal prosecutors send to inform people they are the target of an investigation and the government wants to talk to them.

"Absolutely not," Aubrey Harwell, Haslam's lawyer, said in a phone conversation Wednesday. Houston lawyer Rusty Hardin said Hazelwood has not been questioned, sent a letter nor contacted in any way by investigators.

That may not mean prosecutors have concluded that Haslam, owner of the Cleveland Browns, and Hazelwood had no role in a fuel rebate fraud scheme at Pilot, or knowledge about it, white-collar defense attorneys said.

"There could be endless shades of strategy going on," said Cleveland attorney Virginia Davidson, who was commenting on white-collar defenses in general, not the Pilot case.

Davidson, a former assistant U.S. attorney, said the use of a target letter is completely at the discretion of federal prosecutors.

"If the government hopes to get information out of someone, they might try to contact the person without labeling them a target," said the head of the white-collar practice at the Calfee law firm in Cleveland. "It could also be that a target letter is coming in the future."

The question of how far the fraud at Pilot extended into the company's executive suite became more pointed after National Sales Director Brian Mosher admitted Monday that he helped cheat trucking companies out of between $7 million and $20 million, involving between 50 and 250 victims.

Cleveland lawyer Avery Friedman, a weekend legal analyst on CNN, said Mosher was probably facing on the low end of sentencing guidelines -- about 18 to 24 months in prison, and his agreement to help prosecutors could knock eight months off that.

"Even with cooperation he's probably still facing 11 months in a federal penitentiary," Friedman said, after reviewing Mosher's plea deal.

Haslam has steadfastly maintained he had no inkling that trucking customers were being deliberately shorted on fuel rebate and discount payments until the federal investigation broke open.

A court in late November approved an $85 million settlement to reimburse companies what they were owed, plus interest and legal costs. Other customers that opted out of the settlement continue to sue.

Mosher's plea deal says that he admitted responsibility on April 15, the day agents flooded the headquarters of Haslam's family-owned business in Knoxville, Tenn., and that "he took immediate steps to help the investigation."

A federal affidavit used to get court consent for the raid indicated Hazelwood, Haslam and Vice President of Sales John Freeman had knowledge of rebate fraud because it was discussed at sales meetings in Knoxville where they were present.

Besides Mosher, two other former employees also pleaded guilty to fraud-related charges in U.S. District Court in Knoxville, Tenn., on Monday, bringing the number of people charged in the Justice Department/IRS investigation to 10.

Mosher reported to Freeman, whose attorney, Roger Dickson, declined comment on whether his client has received a target letter. Freeman, in turn, reported to Hazelwood, and Hazelwood reports to Haslam.

Freeman was placed on administrative leave from Pilot in the wake of the FBI raid. Hazelwood remains on the job.

In previous statements, Haslam has said he is cooperating with government investigators.

Pilot is said to have been responding for some time to a government subpoena for information. A grand jury is reviewing whether to hand up indictments against Pilot employees.

"We haven't been contacted at all by the government," Hardin, Hazelwood's lawyer, said this week.

The Houston defense lawyer has represented several sports figures, including Roger Clemens, who was acquitted on perjury charges that he lied to Congress about using steroids.

Harwell also has had a portfolio of high-profile clients, including Eddie DeBartolo Jr., the Youngstown native who owned the San Francisco 49ers and was caught in a gambling fraud scandal in Louisiana.