Pilot Flying J, the nation’s largest chain of truck stops and travel center, was raided by both the IRS and FBI on Tuesday.
Jimmy Haslam, CEO of the company, owner of the NFL’s Cleveland Browns and brother of Tennessee Governor Bill Haslam (R), in a Tuesday press conference, characterized the investigation as being over “a very insignificant number” of rebates (with no tax violations).
However, court documents filed Thursday by the government alleges that a fraud scheme was installed to keep previously agreed upon fuel rebates away from trucking companies who were not “sophisticated” enough to track the money themselves. The scheme was apparently in effect for at least 5-7 years and cost at least one company around $150,000 dollars.
Even worse, Mr. Haslam purportedly knew of and, at the very least, tacitly condoned the scheme, according to the 120-page affidavit attached to the search warrant:
(A confidential informant) further advised that the rebate fraud has occurred with the knowledge of Pilot’s current President Mark Hazelwood and Pilot’s Chief Executive Officer James A. “Jimmy” Haslam III due to the fact that the rebate fraud-related activities have been discussed during sales meetings in Knoxville, Tenn., in which Hazelwood and Haslam have been present.
The investigation began in May 2011, before the NFL started their “vetting” process of Mr. Haslam. It is unclear how much the NFL knew before approving his purchase of the Browns last season.
If found guilty, Haslam would potentially suffer a similar fate as former 49ers owner Eddie DeBartlo, who lost ownership of the team after pleading guilty for failure to report extortion.
Pilot Flying J could not be reached for comment.
The NFL is not commenting at this time.
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