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Browns owner Haslam's truck-stop company fined $92M

AP
The sale of the Cleveland Browns to Jimmy Haslam III was unanimously approved by NFL owners Tuesday, Oct. 16, 2012.

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— AP

By The Associated Press
Monday, July 14, 2014, 11:04 p.m.
 

NASHVILLE, Tenn. — 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, 10 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 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 about $30 billion.

 

 
 


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