Haslam's remarks day after 200 FBI, IRS agents raid Flying Pilot J
It took over 200 FBI, IRS, and local law enforcement officers to execute search warrants for company records at Pilot Flying J in Knoxville, Tennessee. The raid took two days.
Local law enforcement agencies had to be recruited to help carry out the search for evidence. They were needed because federal officers lacked the manpower to execute them because they were in multiple locations. It included the homes of three Pilot sales executives.
Over a million pages of documents were seized.
CEO Jimmy Haslam called a press conference the next day after the initial search for evidence. Here are some of his comments:
The FBI raid "came as a complete surprise" said Haslam.
Federal investigators allege "that rebates owed to the customers were not paid," said Haslam. "And we (Pilot) of course disagree with that."
"It is centered around the 480 truck stops we own throughout the country."
"We have 3300 trucking companies we do business with everyday. And fortunately, that number we are doing business with is going up every day."
The company believes in doing "the right thing all the time", said Haslam.
"We steadfastly believe we have done that. It (the search) appears to be centered around an insignificant number of customers on the application of rebates."
In the video below, a reporter asked Haslam what he meant by "an insignificant number of customers."
Haslam said, "In the scheme of things for Flying Pilot J, we believe it to be an extremely low percentage."
According to federal prosecutors, it involved all of Pilot's 5500 customers.
How much are customers owed? Haslam said he didn't know the exact amount that customers are claiming to be owed. "We believe it to be a low number."
So far, Pilot has returned $56 million to customers, $9 million in interest, $15 million in additional "good faith" restitution. Also, a $92 million fine was paid to the U.S. Treasury,
Why is the IRS involved? Haslam said, "We do not know. We are confident it doesn't involve any tax issues."
"We run a very tight ship here", said Haslam. "We have begun an internal audit. In typical Flying Pilot J fashion, it will be very quick and very thorough."
According to Bill Killian, Assistant Attorney General, the audit took four months. He said it took 120 court appointed auditors "working 70-hour weeks including Saturdays and Sundays" to sort out the fiasco.
The cost of the audit, $14.36 million, was paid by Pilot Flying J.
FBI and IRS criminal investigators sifted through and reviewed "millions of emails, and other documents, information and document requests, and interviews."
"I don't think we have done anything wrong", said Haslam.
The entire press conference is attached below:
Two weeks after the raid, Haslam said that Pilot's fiasco was caused by "a very few rogue employees that figured out how to manipulate the system". It involved 250 customers. Here is the story: