Haslam admits in writing that Pilot Flying J stole $56 million from 5600 customers
Jimmy Haslam, CEO of Pilot Flying J, admitted his company stole $56 million from 5600 customers and cooked the books to conceal the theft. His signed admission of corporate guilt as Pilot's CEO is linked here on Page 40 marked "C4":
https://www.justice.gov/usao-edtn/pr/pilot-flying-j-enters-criminal-enforcement-agreement
In addition, according to Bill Killian, Assistant Attorney General, Haslam also admitted Pilot's key executives trained its sales staff on how to cheat customers. This sales training was sanctioned and conducted by Pilot in its company headquarters in Knoxville, Tennessee.
These training sessions were two days and captured in full on an FBI informant wiretap. To make Pilot aware of its crimes, the FBI turned over 200 hours of wiretaps to Pilot attorneys.
In his signed statement to the Justice Department, Haslam admitted Pilot paid $186 million in restitution, interest, fines, audit costs, and attorneys fees.
Pilot has paid over a billion dollars in damages when 62 private federal court settlements are included.
This amount includes a $92 million non-deductible fine to the U.S. Treasury in exchange for corporate criminal immunity, said Leslie R. Caldwell, Assistant Attorney General.
The $186 million paid by Pilot includes $15 million restitution to " thousands of customers" who had verbal, rather than written contracts. This made theft easy and made "it impossible for auditors to determine the amounts" stolen from these customers.
Pilot also paid $9 million dollars in interest.
The Justice Department also made Pilot pay the cost of the audit, $14.36 million.
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.
Attorneys' fees were $14 million plus $52,000 in expenses, according to filings with the U.S. District Court in Little Rock, Arkansas.
FBI and IRS criminal investigators sifted through and reviewed "millions of emails, and other documents, information and document requests, and interviews."
Pilot Flying J is the nation's largest seller of diesel fuel. It has 27,000 employees and sales of $30 billion. It sells seven billion gallons of diesel fuel a year. Its 750 retail convenience stores are in 43 states and six Canadian provinces.
"No corporation, no matter how big, influential, or wealthy, is above the law,” said U.S. Attorney Bill Killian.
To help prevent future fraud, Pilot also agreed to adopt written contracts, new audit standards, and add a Compliance Department. These new business practices were devised, created, and enforced by the FBI and IRS. Pilot agreed to follow them or be subject to further corporate criminal investigations and an additional fine of $20 million.
However, David Hughes, Pilot's V.P. of Sales and Transportation, took credit for implementing these standards and ridding the company of its verbal contracts. Hughes said, "we are changing the industry standard at Pilot Flying Pilot J by creating and implementing new systems and processes."
Haslam never received immunity and remains subject to criminal prosecution.
An eight-hour deposition or legally recorded interview by Jimmy Haslam taken December 13, 2016, has been kept sealed and out of public view by Franklin County Common Pleas Court in Columbus, Ohio.
It is in court case 15-CV-9849, FST Express Inc. versus Pilot Travel Centers LLC. It will take an FBI subpoena or public information lawsuit to reveal Haslam's statements he made under oath about the Pilot rebate scam. Or Haslam can release it voluntarily.
Until his deposition is made public, Haslam can deny personal responsibility for the Pilot rebate fiasco. He must, however, avoid making any statements contrary to what Pilot, the corporation, plead guilty to, which was theft and fraud. Otherwise, the FBI investigation starts all over again. Haslam can say Pilot, the corporation, is facing no charges because the company has already copped to guilty pleas, fines, and restitution.
Pilot Flying J and the Cleveland Browns are owned by Jimmy Haslam. The FBI, IRS, and Department of Justice investigation only involved Pilot and its employees. It had nothing to do with the Cleveland Browns.
Editor's note: To read the 25-page Criminal Enforcement Agreement, click on the blue link below. It is to the U.S. Department of Justice. Scroll to the end of their one-page News Release. Three lines from the bottom, highlighted in light brown, click "Download Agreement."
https://www.justice.gov/usao-edtn/pr/pilot-flying-j-enters-criminal-enforcement-agreement
David Hughes, Pilot's V.P. of Sales and Transportation