NASHVILLE, Tenn. - Cleveland Browns owner Jimmy Haslam says he has suspended several members of the sales team at Pilot Flying J, the family-owned truck stop chain that is under a federal fraud investigation.
FBI and Internal Revenue Service agents last week raided the Knoxville headquarters of the country's largest diesel retailer. An affidavit filed in federal court alleges a widespread scheme to defraud customers.
Haslam, the privately held company's CEO and brother of Tennessee Gov. Bill Haslam, on Tuesday didn't name the people placed on administrative leave. He has denied wrongdoing and dismissed suggestions he step aside from running Pilot or the Browns while the investigation is underway.
Secretly recorded conversations among the sales team said Haslam was aware of at least some instances of employees withholding rebates from Pilot customers.
Haslam released the following statement:
"Thanks again for coming out today.
"I want to continue to keep you informed of current events here at Pilot Flying J.
"As was the case last week, as much as I would like to, I will not be able to take questions because of the ongoing federal investigation. I hope I will answer most of your questions in my remarks.
"It still appears to us, based on all we know at this time, that this federal investigation is focused on a narrow slice of our business in which rebates on diesel fuel purchases are manually calculated and paid to a relatively small number of our 3,300 trucking company customers.
"We are continuing to cooperate appropriately with investigators, but we are determined to understand on our own the questions they are asking and to do everything we can to make sure we are never in this position again.
"To that end, I’m announcing today five steps that we taking to address the issues raised by the investigation. I’m going to take them one by one.
"1) Immediately, we are bringing our field audit team to Knoxville to review all 3,300 contracts with our trucking company customers, not just the relative few implied in the federal affidavit, and to proactively address any miscalculations that we may find.
"Our goal is to understand the entirety of that part of our business, not just the manually processed contracts. If we find an underpayment, we will encourage the affected customer to review our finding, test with their own audit if they like, and if we owe them money, we will write them a check immediately.
"We will be communicating this plan directly to our trucking company customers and moving through this process as quickly as possible. I hope this process won’t take more than four to eight weeks, but the important thing is that we get it right.
"I’ve already spoken personally to several of our customers, including Curt Morehouse with Morehouse Trucking and Tommy Hodges with Titan. We are working with Curt to reconcile his account, and I will be going to Tommy on Wednesday.
"2) Yesterday, we placed on administrative leave several members of our diesel fuel sales team and, on an interim basis, we are restructuring that team pending further investigation to get control of that operation and restore confidence to our customers.
"Placing members of our team on leave is very painful. For years, we have been a trusting, proud family here at Pilot Flying J focused on providing honest, forthright services to our customers. We have had relatively few personnel issues, but we cannot ignore the content of the federal affidavit released last Thursday evening.
"We are not judging the guilt or innocence of the team members placed on administrative leave. We are addressing actions and words that fail to show proper respect to our customers and that violate the character, values and principles that have been core to this company since it was founded 54 years ago.
"As a private company, we have dealt with these members privately and will not release their names publicly.
"3) I have directed that all of our diesel fuel customers be converted to electronic calculation and payment eliminating future risks of any abuse that might be enabled by manual calculation and payment.
"This process will fully eliminate manual processing at Pilot Flying J and place all of our customers on electronic direct bill. I expect this process to be completed by June 30.
"4) I have asked our outside counsel to help us create and staff a position of Chief Compliance Officer to report to the company’s general counsel to deal with any similar questions or issues that might come up in the future.
"The establishment of a position of Chief Compliance Officer is important, because had we had one before, perhaps some team member would have raised a question about manual rebates internally before anyone would ever have gone to federal investigators.
"If we had discovered any irregularities on our own, we would have fixed them on our own. That would have been good business, and it would have been the Pilot Flying J way – always do what is