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Haslam-owned truck-stop chain to pay $92M fine


NASHVILLE, Tenn. (AP) -- The truck-stop company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam has agreed to pay a $92 million penalty for cheating customers out of promised rebates and discounts, authorities announced Monday.

In an agreement with the U.S. Attorney's Office for the Eastern District of Tennessee, Pilot Flying J has accepted responsibility for the criminal conduct of its employees, ten of whom have pleaded guilty to participating in the scheme.

For its part, the government has agreed not to prosecute the nation's largest diesel retailer as long as Pilot abides by the agreement. Among other conditions, Pilot has agreed to cooperate with an ongoing investigation of current and former employees. The agreement does not protect any individual at Pilot from prosecution.

The agreement was signed by U.S. Attorney Bill Killian on Thursday and attorneys for Knoxville-based Pilot on Friday.

Nashville criminal defense attorney and former prosecutor David Raybin, who has followed the case but is not involved, said the agreement most likely signals that Pilot CEO Jimmy Haslam will not face charges.

"No prosecutor would enter into an agreement like this, ask for this kind of sanction, unless they didn't have enough evidence to indict Haslam," he said. "Also, Pilot would not agree to pay unless they felt the government would not prosecute him."

FBI special agent Robert H. Root said in an affidavit filed in federal court last year that the scheme was known by a variety of euphemisms including "manual rebates." Sales team members would make reduce the amount of money due to trucking company customers they deemed to be too unsophisticated to notice, according to the affidavit.

The scheme was widely known in the sales department, according to court documents, with supervisors teaching other employees how to do it.

Court records said the scheme lasted from at least 2007 until an FBI raid in April 2013.

Jimmy Haslam has said he was unaware of the scheme. Through a spokesman, he declined an interview on Monday, but issued a statement: "We, as a company, look forward to putting this whole unfortunate episode behind us, continuing our efforts to rectify the damage done, regaining our customers' trust, and getting on with our business."

Gov. Bill Haslam holds an undisclosed ownership share in the company but has said he is not involved in Pilot's day-to-day operations. Pilot has annual revenues of around $30 billion.

In May, several top executives abruptly left the company. Pilot officials have not said why the employees left, but the agreement with prosecutors acknowledges that the company has terminated or placed on leave employees who violated company policies. It also acknowledges that Pilot acted quickly to investigate problems with the rebate program and repay cheated customers with interest.

Pilot agreed in November to pay out nearly $85 million to settle claims related to the fraudulent withholding of fuel rebates and discounts in a class-action lawsuit with 5,500 trucking companies. Several companies have filed separate lawsuits against Pilot that are ongoing.

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spdy65 July 14 2014 at 9:44 PM

Unreal. The rich owner walks away with a fine, and the lowly employees face jail. That's justice in America.

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2 replies
tbplayer44 spdy65 July 14 2014 at 11:51 PM

In Government, the owner (Obama) and the employees get away with it.

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2 replies
Michael Corn tbplayer44 July 15 2014 at 2:05 AM

Those who voted for Obama own you and your party. You lost and you will lose again, and again, and again because you represent hillbillies and trailer folk...and the Kock Brothers.
The republicans continue to prove that they have absolutely no idea how to govern. The last time they tried we had 911, two unpaid for wars, unpaid for tax cuts for the rich in the middle of the 2 unpaid for wars, and then the finale with the economy crashing because of their rich buddies.

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max13722 tbplayer44 July 15 2014 at 4:37 AM

Well that didn't take long for some idiot to throw the Presidents name out there, in a story that had absolutely nothing to do with him. Thanks idiot.

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ualfriend spdy65 July 15 2014 at 11:56 AM

tbplayer44 try harder you can come up something dumber

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JERRY July 15 2014 at 7:57 AM

Just goes to show you, he who has the most money wins!!

Flag Reply +6 rate up
rodeda13 July 14 2014 at 10:43 PM

These fines against criminal owners, ceo's, bank execs, and Wall St. thieves means nothing to them. It only amounts to a small percent of what they get away with. They require PRISON. Not just any tennis court prison either. 'F' in the 'A' prison ought to learn them!

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1 reply
rodeda13 rodeda13 July 14 2014 at 10:46 PM

Also, this being Bastille Day, I can think of another appropriate punishment.......

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Jim July 15 2014 at 8:09 AM

If someone robbed one of their stores he'd get 10-15 in the slammer but rip off his customers for millions on diesel fuel and Tenn. Gov. Haslam gets a fine. There are very few politicians or rich white guys in jail. The poor go to jail and fight the wars; the rich get richer. Fill 'er up, gov.

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1 reply
ncinkman Jim July 15 2014 at 5:11 PM

Oblidi, oblida.....

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Kevin July 15 2014 at 7:47 AM

Couldn't help but notice that there is no apology in CEO Jimmy Haslam's prepared statement. Not even the half-hearted one's that are usually offered. Won't be stopping at Pilot anymore.

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molly2peaches July 14 2014 at 10:35 PM

First Modell, now this crook. BIG time mouth-offing Repub. Big Romney donor. Peas from the same pod.

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msanbaker July 14 2014 at 11:32 PM

Figures, the rich bastard wasn't happy with what he had.

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Bruce July 15 2014 at 8:35 AM

Then the company will raise prices for the shortfall caused by the fine, the consumers will end up paying for it, and everyone will be happy except for the poor consumer who in effect got screwed again.

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Hal July 15 2014 at 5:59 AM

This has to be the least informative "story" I've ever read,, What exactly happened that it was worth $92 Million for this to "go away"?

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fkfrakes8 July 14 2014 at 9:56 PM

LOL ..... The Haslam's didn't know about it..... LOL

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