U.S. District Judge James M. Moody approved a $84.9 million settlement in the Pilot Flying J fuel rebate scandal in a Little Rock, Arkansas courtroom Monday.
KNOXVILLE - Claims of unpaid fuel rebates apparently led to Monday's raid on the West Knoxville headquarters of Pilot Flying J as part of a federal criminal investigation, the company's CEO said.
"It appears to be centered on a very insignificant number of customers and the application of rebates — that the rebates owed to the customers were not paid," CEO Jimmy Haslam said at a short news conference Tuesday.
"We of course disagree with that. It does not involve any tax issues. To my knowledge, there was no evasion of state or federal taxes involved."
Haslam said he didn't know the exact number of customers and didn't know what documents were seized during the search by agents of the FBI and Internal Revenue Service.
He said some sales people were subpoenaed. He wouldn't say who.
Pilot Flying J does business with about 3,300 trucking companies and has a sales staff of 23 people across the country calling on these companies every day, Haslam said.
Haslam said he hadn't been subpoenaed.
"Obviously, we were shocked by the events of yesterday," he said. "At Pilot, motto No. 1 is (to) do the right thing all the time. We will cooperate fully."
Haslam said the company has launched its own internal investigation. He said the company hadn't received any complaints about rebates before.
U.S. Attorney Bill Killian said agents served two search warrants on Pilot officials Monday. He wouldn't give specifics.
"I can tell you that a second search warrant was issued last night," Killian said Tuesday. "It's ongoing."
No arrests have been made so far. Killian wouldn't say whether any arrests appeared imminent, although he indicated that the search could be part of a long-term investigation.
Federal authorities typically ask a judge to seal such warrants, rendering the contents secret.
The second search Monday night came hours after dozens of FBI and IRS agents raided the company headquarters on Lonas Drive.
Haslam said authorities allowed essential personnel to remain on their jobs Monday during the search.
"If you dispatched trucks to pull gasoline and diesel, you stayed in the building. If you were in charge of maintenance, you stayed in the building. If you ran our call center where general managers call in with questions, you stayed in the building," he said.
An employee present during Monday's first raid at the headquarters described a quick, businesslike effort by federal agents to sort through staffers by name and job title. Workers were told to turn off their computers, cellphones and other electronic devices immediately, with some sent home and others allowed to stay and work.
Haslam said those companies Pilot Flying J does business with have been supportive.
"We have reached out to almost every trucking company — many of them called us last night in a show of support — and we feel very good about our ongoing relationships with the trucking companies," he said.
The same holds true with suppliers, Haslam said.
"Any time anything happens like this, suppliers get concerned because they are worrying about whether they are going to get paid," he said.
Pilot Flying J has not had any of its locations close, Haslam said.
"I think we might have had one run out of fuel up in Minneapolis, whether that was related to this situation or we just ran out of fuel, I can't say," he said. "For the most part, our suppliers are working well with us."
All 650 Pilot Flying J properties had fuel Tuesday, he said.
Pilot Flying J is the largest operator of travel centers and travel plazas in North America. It has more than 30,000 employees and recorded revenues of $29.3 billion in 2011.
Knoxville News Sentinel Staff writer Ed Marcum contributed to this report.
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