Earlier this week, the headquarters of Pilot Flying J, of which Cleveland Browns owner Jimmy Haslam is the CEO and part-owner, was raided by the FBI and IRS. According to an FBI affidavit unsealed on Thursday, an employee of Pilot Flying J told investigators that Haslam knew about rebate fraud at the truck stop chain owned by his family.
The 120-page document was filed in federal court in Knoxville, Tenn., where Pilot Flying J is based out of. It alleges that members of the company's sales team 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 alleges 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."
This affidavit was filed in order to secure the search warrants used in Monday's raid.
One employee, who was identified only as a confidential source, told investigators that the rebate scheme was discussed during sales meetings that were attended by Haslam and Pilot Flying J president Mark Hazelwood. The informant said that the practice was known by a variety of euphemisms such as "manual rebates" and "screwing", amongst others.
Earlier this week during a news conference, Haslam denied any wrong doing. In a statement on Thursday, he added 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." Haslam said that Pilot Flying J would continue to cooperate with authorities and conduct its own investigation.
The investigation began when agents were contacted in May 2011 by an informant who said that they had been told about the scheme. The investigation continued through this month.