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A federal judge in Kentucky has allowed a civil lawsuit to proceed that claims fuel rebate fraud by Browns owner Jimmy Haslam's Pilot Flying J truck stop chain. The judge says it is "plausible" that Haslam and other top executives may have been aware of the wrongdoing.

(Alison Grant, The Plain Dealer)

CLEVELAND, Ohio -- A federal judge said Wednesday that assertions raised by trucking companies that sued Pilot Flying J "plausibly suggest" that top executives, including owner Jimmy Haslam, may have been aware of and helped further a scheme to defraud trucking companies of fuel rebates.

The statement by U.S. District Judge Amul Thapar comes near the end of a 77-page order in a civil lawsuit filed by seven trucking companies, which names as defendants Pilot Flying J and current and former employees.

Aubrey Harwell, Haslam's attorney, said on Wednesday evening that "Mr. Haslam knew nothing about any inappropriate conduct."

Thapar dismissed some of the lawsuit's claims and allowed others to proceed. The plaintiffs had opted out of a $85 million settlement that Haslam's family-owned service plaza chain reached with other trucking companies.

Thapar's memorandum opinion and order allows the lawsuit to proceed, but the allegations within it must be proven in court.

Haslam, owner of the Cleveland Browns, has said he knew nothing about any fraud at his truck stop chain until an FBI affidavit in April 2013 described a scheme to cheat trucking companies out of fuel rebates. Haslam has never been charged in the on-going case, and had worked with prosecutors, including paying a $92 million civil penalty.

Thapar allowed two dozen counts by the trucking companies to proceed against Pilot. They include claims of breach of contract, fraud and negligent misrepresentation. Thapar granted Pilot's motion to dismiss more than a dozen other counts.

When contacted about the judge's order, Haslam attorney Aubrey Harwell said "These plaintiffs opted out of a class settlement that would have assured them any amount owed, plus interest, choosing instead to make exorbitant claims."

"We are pleased that the court dismissed a number of plaintiffs' claims and believe that plaintiffs' remaining efforts to collect excessive damages and attorney fees lack merit. We intend to continue to defend them vigorously."

Asked about Thapur's statement that said that facts raised by the trucking companies "plausibly suggest" that Haslam and other executives knew of the fuel rebate fraud, Harwell said: "There is limited evidence before the court. When the full story is told, it will be clear and convincing that Mr. Haslam knew nothing about any inappropriate conduct."

Thapar's order said the trucking companies "state four facts that plausibly suggest that some of the individual defendants managed or knowingly carried out the fraudulent rebate-reduction scheme."

The plaintiffs first allege that in 2012, Haslam, Brian Mosher, Arnold Ralenkotter, Mark Hazelwood and John Freeman planned an annual meeting with breakout sessions for teaching other employees to reduce rebates without detection, the order says.

"Second, those individuals planned teaching sessions to train employees --or directly taught other employees -- how to participate in the rebate-reduction scheme and avoid detection," Thapur wrote.

"Third, (the trucking companies) specifically allege Mosher told others to reduce rebates manually, and that Hazelwood in turn instructed Mosher to do so. And finally, (the trucking companies) allege that Freeman hosted a meeting at his lake house to discuss how to perpetuate the fraudulent rebate scheme."

"Together, these facts at least plausibly suggest that Haslam, Mosher, Ralenkotter, Hazelwood, and Freeman 'adopt[ed] the goal of furthering or facilitating the criminal endeavor,'" the judge said.

Brian Mosher, former national director of sales, and Arnold Ralenkotter, regional sales director, pleaded guilty to roles in the fraud last year. They are cooperating with authorities and no sentencing dates have been set. Eight other former employees have pleaded guilty to some form of wire or mail fraud since federal agents raided Pilot's Tennessee headquarters in April 2013.

Haslam dismissed Vice President of Sales John "Stick" Freeman in May. President Mark Hazelwood left the company the same month. Neither Hazelwood nor Freeman have been charged.