Posted April 18, 2013 on
AP on Fox
A Pilot Flying J employee told investigators that CEO Jimmy Haslam, who is also the owner of the Cleveland Browns, knew about rebate fraud at the truck stop chain his family owns, according to an FBI affidavit unsealed Thursday.
The 120-page document filed federal court in Knoxville, where Pilot is based, alleges that members of the company's sales force preyed on smaller trucking companies by reducing the amount of rebates they were owed for buying certain amounts of fuel.
Special Agent Robert H. Root alleged a ''conspiracy and scheme to defraud executed by various Pilot employees to deceptively withhold diesel fuel price rebates and discounts from Pilot customers ... for the dual purposes of increasing the profitability of Pilot and increasing the diesel sales commissions of the Pilot employees participating in the fraud.''
The affidavit was filed to secure the search warrants used in Monday's raid on the Pilot Flying J headquarters.
One employee identified only as a confidential source told investigators that the rebate scheme was discussed during sales meetings attended by Haslam and Pilot President Mark Hazelwood.
The informant said the practice was known by a variety of euphemisms ranging from ''manual rebates'' to ''screwing.''
Haslam denied wrongdoing in a news conference earlier this week. He said in a statement Thursday that ''the foundation of this company is built on its integrity and that any willful wrongdoing by any employee of this company at any time is intolerable.''
He said the company would continue to cooperate with authorities and conduct its own investigation.
Informants secretly recorded conversations among Pilot employees holding frank -and often profane - discussions about the rebate scheme, and agents interviewed current and former members of the sales team.
The investigation began after agents were contacted in May 2011 by a confidential informant who said they had been told about the scheme by a Pilot Flying J employee. The investigation continued through this month. Jimmy Haslam bought the Cleveland Browns in a $1 billion deal last summer.
Haslam was in Cleveland on Thursday to help prepare for next week's NFL draft. League spokesman Greg Aiello declined to weigh in on whether the investigation would affect Haslam's role as team owner.
''We must respect the process of a federal investigation and decline comment,'' Aiello wrote in an email.
Pilot Flying J, a privately held company with annual revenues of $29 billion, is the nation's No. 1 retailer of diesel fuel. It is mostly owned by Haslam; his brother, Tennessee Gov. Bill Haslam; their father and company founder Jim Haslam; and other family members.
When Pilot bought its nearest competitor Flying J out of bankruptcy in 2009, federal trade officials worried the combined entity owned by the powerful Haslam family could corner the market on diesel fuel.
To alleviate ''competitive concerns,'' the Federal Trade Commission in 2010 required Pilot to sell some truck stops to a competitor, Love's, and share its fuel purchase technology before it could merge.
When asked earlier this week whether the probe was related to the FTC's previous concerns about unfair competition, Haslam replied: ''We would not think so.'' An FTC spokesman declined to comment.
According to the IRS, it is common for fuel stops to hand out monthly rebates on purchased fuel. Rebates should be reported as income, as a reduction of expense, or as a reduction to the cost of the new asset.
Not all customers doing business with Pilot are on the rebate program.
Pat Marsh, chairman of Shelbyville, Tenn.-based Big G Express, said his trucking company had a rebate program set up when it was a client with Flying J. Since the Pilot takeover, that system has been replaced with pre-negotiated prices paid at the pump with swipe cards. It tracks the mileage on trucks, the identity of the driver and the amount of fuel purchased
''The more we buy, the cheaper the price is,'' said Marsh, who is also a Republican state representative, said in an interview before the affidavits were released. ''We negotiate our price talking to the corporate people and the sales people and by how many gallons we purchase.''
Marsh said he was surprised to see the Pilot Flying J headquarters raided.
''We've had nothing but a great relationship with those guys,'' he said. ''They treat us fairly.''
Several trucking companies are named in the affidavit as having not received their negotiated rebates from Pilot. None immediately responded to messages from The Associated Press seeking comment.
Sainz reported from Memphis.
BEST OF MAXIM
AROUND THE WEB
Stop me if you’ve heard this one- which came first, the chicken or the egg? When it comes to the Browns and the 2013 NFL Draft, the question might apply.
When the Browns made wholesale coaching changes, it appeared that a certain draft strategy would be in place. Ray Horton’s defense would require several pieces. An outside linebacker/edge rusher seemed the highest priority....
Cleveland Browns linebacker Craig Robertson appears to be the front-runner to win the starting job next to D’Qwell Jackson for the 2013 season.
Nate Ulrich of the Akron Beacon-Journal reports that Robertson and fellow second-year Brown James Michael-Johnson form a two-man race to join the starting unit. Robertson appeared in all 16 games as a rookie, recording 93 tackles, one sack...
The closer we get to the 2013 NFL Draft, the more we here about possible trade between teams. Cleveland Brown’s CEO, Joe Banner, recently said during a pre-draft conference, according to cleveland.com.The author of the article, Mary Kay Cabot, goes on to speculate weather the Chargers might be one of those teams trying to trade with Cleveland.Several respected national NFL analysts...
BEREA, Ohio - Cleveland Browns owner Jimmy Haslam is back with his football team, but he didn't participate in the Browns' pre-draft press conference Thursday afternoon.
Browns CEO Joe Banner and general manager Mike Lombardi didn't have much to say about Haslam and the situation with his Pilot Flying J company, either.
FBI and IRS agents executed search warrants at Pilot...
Cleveeland Browns linebacker D’Qwell Jackson is enjoying the start of minicamp, after years of playing a flat read and react 3-4, new defensive coordinator Ray Horton will turn the dogs loose this fall. Jackson has played in enough patient, stay in your gap and let the flow come to you defenses, now it’s time to shake up the pot. Horton’s defense is spin off from the Pittsburgh’s...
NASHVILLE, Tenn. — A Pilot Flying J employee told investigators that CEO Jimmy Haslam, who is also the owner of the Cleveland Browns, knew about rebate fraud at the truck stop chain his family owns, according to an FBI affidavit unsealed Thursday.
The 120-page document filed in federal court in Knoxville, where Pilot is based, alleges that members of the company’s sales force...
Cleveland Browns owner Jimmy Haslam has joined CEO Joe Banner and general manager Michael Lombardi at the team's training facility as they prepare for their first draft with the franchise.
Pilot Flying J CEO Haslam arrived in Berea on Thursday morning, three days after FBI and Internal Revenue Service agents executed four search warrants at the company's Knoxville, Tenn...
According to Jason La Canfora of CBS Sports, the Cleveland Browns are “looking hard at” Alabama cornerback Dee Milliner.The Browns already have a pretty solid defense, but teaming Milliner up withJoe Haden would give them a nice set of corners. Need NFL Tickets?
The Cleveland Browns have been the doormat of the AFC North for a little over a decade if not more. The Browns have made a coaching change, and more importantly, a culture change on defense with the addition of Ray Horton as defensive coordinator.
One person in particular who likes the way the Browns are going is stud middle linebacker D’Qwell Jackson. The Browns were top 10...
Cleveland Browns owner and Pilot Flying J CEO Jimmy Haslam says he hasn't done anything wrong and isn't stepping aside amid a federal investigation of his company's business practices.
Haslam spoke to reporters in Knoxville on Friday, a day after a federal court unsealed an FBI affidavit in an ongoing investigation of customer rebate fraud at Pilot Flying J.
An investigation into Pilot Flying J. could result in CEO Jimmy Haslam, who is the owner of the Cleveland Browns, temporarily relinquishing control of the team.
As we’ve been reporting, the FBI has been relentless in their investigation of Cleveland Browns owner Jimmy Haslam, who is the CEO of Pilot Flying J, a company suspected of being fraudulent in their business transactions.
Tuesday Haslam stated that it would be business as usual for the Browns in the midst of such an intense investigation. Now According ESPN Cleveland, the ongoing...
The NFL and the Cleveland Browns released the season schedule-
CLEVELAND BROWNS 2013 REGULAR SEASON SCHEDULE
DATE OPPONENT SITE NETWORK TIME*
Sun., Sept. 8 MIAMI DOLPHINS ...
It’s not so much news today given that the Cavs season technically ended about four months ago, but with Cleveland’s NBA team just having officially booked a third-worst finish, it’s once again a fine time to recognize and celebrate the continued success of the best streak going in sports.
Forty-three NBA seasons have now passed, along with forty-eight Major League Baseball...