Haslam Still in the Ditch Over Pilot Flying J Rebate Scandal

by Jana Ritter - Published: 10/10/2013

ESPN Legal Analyst Lester Munson, appearing this week on the network’s show “NFL Hot Read,” said 11 former Pilot Flying J employees have agreed to offer evidence for the Federal Bureau of Investigation as the FBI continues to investigate whether company CEO Jimmy Haslam, who is also owner of the Cleveland Browns, was involved in the alleged scheme to defraud customers who were due rebates.

“The FBI continues to work on this,” Munson told show host Gary Chow. “They are going through literally millions of pages of documents. They are interviewing and re-interviewing witnesses and sometime between now and February of next year we will find out whether Haslam himself will be charged in this massive fraud.” Munson appeared on the show after the network published on its website Munson’s 2,500 word commentary on Haslam and his company.

Haslam has repeatedly stated he knew nothing of the scheme, Munson acknowledged during his interview. “He says he knew nothing of what his sales people were doing,” he said. “They were cheating the customers on their refunds and rebates. If he is charged, it’s a very serious situation. There is so much money involved and it would be such as massive case that it would be the kind of charge that would absolutely certainly produce penitentiary time.”

Munson also revealed that 11 former employees had entered guilty pleas to fraud charges, and four have obtained immunity from prosecution in return for their cooperation.

“Late last month, federal prosecutors, in a major signal, arranged to postpone the sentencing of the seven to allow the FBI to continue its probe.” The court cases are now scheduled for a report to the judge on Feb. 3.

In his commentary, Munson relates a meeting where he said Haslam had ordered top executives of Pilot Flying J to come to a meeting at company headquarters in Knoxville, Tenn. He brought in his national sales director, Brian Mosher, from Bettendorf, Iowa. He invited two top regional sales managers, one from Illinois and the other from Texas. And he included Mark Hazelwood, a lifer at the Haslam-family-owned Pilot Flying J, who had worked his way up to the position of company president.

“Despite the difficulties in the U.S. economy in general and in the trucking industry in particular, Pilot was doing well,” Munson wrote. “Its profits were steady even as its sales of diesel fuel were dropping. One of the first things Haslam did at the meeting of his top people was express his gratitude to Mosher for ‘saving money for the company,’ according to papers later filed in court. It was a strange thing to say to a sales executive who had no authority to cut costs and focused instead on increasing sales and company income.”

Both Mosher and Hazelwood are under FBI scrutiny.

Meanwhile Haslam has remained in constant contact with the public through the news media and through rebateeducation.pilotflyingj.com, a website the company set up to provide information about the rebate investigation.