September 21, 2014

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FBI affidavit says Browns owner Jimmy Haslam knew about rebate fraud at Pilot Flying J

NASHVILLE, Tenn. (AP) — An FBI agent’s affidavit says a Pilot Flying J employee told authorities that Cleveland Browns owner Jimmy Haslam knew about rebate fraud at the truck stop chain his family owns.

The 120-page document was filed Thursday in federal court in Knoxville, where Pilot is based. It identifies the employee only as a confidential source.

The employee told investigators that the rebate scheme was discussed during sales meetings attended by Haslam and Pilot President Mark Hazelwood.

Haslam released a statement Thursday night.

“I now understand more clearly the questions the federal investigators are exploring. I maintain 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,” the statement said. “We will continue to cooperate with the federal investigation and continue our own investigation in these allegations. I value the relationships we have with our customers, our vendors and our team members across this country and regret that they have to go through this with us, but I trust and believe their faith in this company and its principles has never been misplaced.”

The company headquarters was raided Monday by FBI and IRS agents. Pilot Flying J is a private company mostly owned by Haslam; his brother Tennessee Gov. Bill Haslam; their father and company founder Jim Haslam; and other family members.

Pilot-Flying J is the nation’s No. 1 retailer of diesel fuel, and its customer rebate program with trucking firms is at the center of the investigation.

The affidavit was filed to secure the search warrants used in Monday’s raid.

It said top sales officials engaged in a conspiracy and scheme to defraud customers by withholding diesel fuel price rebates in order to increase the profitability of Pilot and the sales commissions of Pilot employees who participated in the fraud.