Jimmy Haslam Recovering From Rebate Scandalby Jana Ritter - Published: 10/01/2013
Browns owner Jimmy Haslam says his family business, Pilot Flying J, is bouncing back from a rebate scandal that rocked the trucking industry and prompted seven former sales officials to plead guilty to federal fraud charges and two dozen companies to sue Haslam's business.
In a 12-minute statement yesterday, Haslam said his business, the nation's largest chain of travel centers, is working to pay back, with interest, any trucking company that was duped in a rebate fraud that came to light in April after the FBI and IRS raided the company's corporate offices in Knoxville, Tenn.
"This has been a very humbling, very embarrassing time,'' Haslam said.
He refused to take questions from reporters and did not discuss the Cleveland Browns.
Court records show some Pilot Flying J sales executives defrauded unsophisticated trucking companies through a rebate program by withholding millions of dollars in fuel price rebates and discounts to boost the profitability and increase their commissions. An FBI affidavit said Haslam and the company's president, Mark Hazelwood, knew about the scheme, as it had been discussed during sales meetings they attended. Haslam has denied any knowledge of the scheme.
He said that since the day of the raids, the company has "done our best to investigate the allegations made against some members of our diesel fuel sales team, to identify any wrongdoing, and to assure our customers that we will not tolerate that kind of behavior anywhere in our company and we will make right 100% any errors we discover.''
Haslam said he has begun to rebuild his sales team, adding that the company is working to make the new members "one of the best, if not the best,'' in the trucking industry.
He said if the company wrongly took $10 from a trucking business, "that's inexcusable.'' He stressed that the company's independent investigation of the rebate fraud shows that those companies affected in the fraud were an "extremely small percentage'' of the companies that did business with Pilot Flying J.
This summer, Pilot Flying J reached a tentative federal settlement to pay trucking firms that were shorted by the truck-stop chain everything they're due, plus 6 percent annual interest, according to the agreement. U.S. District Judge James Moody in Little Rock, Ark. will have a hearing on the settlement in November.
He said his company is growing, despite a difficult economy and the investigation. He said the business, with about 600 travel centers across the country, will add 25 this year.
Haslam said Pilot Flying J "will emerge from this challenge, as difficult as it has been, an even better company, a company made up of people committed to providing the best service in our industry to America's professional drivers and the motoring public.''