Winnipeg Free Press - PRINT EDITION

Fraud allegations hit firm

Truck-stop chain owner admits image hurt

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NASHVILLE -- Cleveland Browns owner Jimmy Haslam on Monday acknowledged a massive hit to the credibility of the Pilot Flying J truck-stop chain following FBI allegations of widespread fraud of customers at the U.S.'s largest diesel retailer.

Haslam announced at the company's Knoxville headquarters he has suspended several members of the sales team after an affidavit filed in federal court disclosed secretly recorded conversations in which Pilot staff boasted about taking advantage of less-sophisticated trucking-company customers.

"I, more than anybody, understand the damage that's been done to our reputation, our brand and our relationships in the trucking community," Haslam said. "Eight days ago I think we had the best relationships, the best trust in the trucking industry. And we now have the worst. I understand that, I accept responsibility for it."

Privately held Pilot Flying J posted $29 billion in revenues in 2012. Haslam, who bought the Browns last year, is the brother of Tennessee Gov. Bill Haslam, who maintains an undisclosed stake in the company their father founded with a single gas station in 1958.

There are three Flying J locations in the Winnipeg area -- one in Headingley, another on Warman Road and the other on Brookside Boulevard.

Jimmy Haslam didn't name the people placed on administrative leave or specify how many have been suspended or whether they are still being paid. He gave a statement to reporters but refused to take questions.

Haslam has denied wrongdoing and dismissed suggestions he step aside from running the company or the Browns while the investigation is underway. He previously described the investigation as focusing on just a small portion of the company's business.

The recordings made for the FBI investigation show leaders of the Pilot sales team derided some clients as unsophisticated, lazy and undeserving of rebates they had negotiated when signing a deal to buy fuel from Pilot. The affidavit indicates millions of dollars were unfairly withheld.

FBI agent Robert H. Root wrote in an affidavit the practice was known by a variety of euphemisms including "jacking the discount," "manual rebates," and "screwing" the customer.

Haslam said while the company isn't judging the guilt or innocence of the employees placed on leave, "We cannot ignore the content of the federal affidavit released last Thursday evening."

Haslam said internal auditors are converging at company headquarters to review all 3,300 contracts with trucking customers and to "proactively address any miscalculations." He said he also planned to travel to meet with officials at trucking companies who were specifically mentioned in the FBI transcripts.

 

-- The Associated Press / staff

Republished from the Winnipeg Free Press print edition April 23, 2013 B6

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