Court documents: Jimmy Haslam involved in illegal Pilot scheme

Court documents: Pilot Flying J CEO Jimmy Haslam involved in illegal scheme

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Jimmy Haslam Jimmy Haslam

KNOXVILLE (WATE) - New court documents show top executives at Pilot Flying J, including CEO Jimmy Haslam, were involved in an illegal activity described as "jacking the discount."

6 News obtained a copy of the affidavit and search warrant Thursday afternoon.

The documents say a confidential source tipped off federal investigators to illegal activities at the company.

The court filings say Haslam and other executives were a part of an illegal scheme involving unpaid rebates to trucking companies in an attempt to increase profits.

The FBI first learned of the scheme when a Pilot Flying J employee contacted investigators in May 2011. Later another employee came forward with additional information.

According to court documents, an unnamed informant alleged to the FBI that the company was cheating its customers of tens of thousands dollars in a scheme that was not only condoned by top sales officials, but encouraged.

Beginning in June, at least two other informants came forward. Cathy Giesick, a former employee, and an unnamed current employee were both given immunity for their cooperation.

Between them, they recorded a number of conversations with Pilot officials, that described the scheme.

Giesick explained to the FBI that if a customer noticed her cutting the rebate, she was told to "blame the error on a computer glitch."

But things began to change in late February, not long after Jimmy Haslam returned as CEO.

The documents show Haslam wanted to know what deals were out there and that they were fair.

By April, the sales staff was told to route their discount deals through in-house attorneys.

The recordings indicate some were speculating if an audit was coming, or if a competitor had alerted their customers to the discount scheme.

In a statement released late Thursday, Haslam is quoted as saying he maintains faith in the operation of his family's company.

"I maintain that the foundation of this company is built on its integrity and that any willful wrongdoing by any employee of this company at any time is intolerable," he said. "We will continue to cooperate with the federal investigation and continue our own investigation in these allegations."

In the statement Haslam appeared to acknowledge that the reputation of Pilot Flying J has been tarnished, saying, "I value the relationships we have with our customers, our vendors and our team members across this country and regret that they have to go through this with us, but I trust and believe their faith in this company and its principles has never been misplaced."

Dave Smith, Press Secretary for Gov. Bill Haslam, said in a statement responding to the situation: "The governor is aware of the affidavit. He has faith in Pilot to do the right thing, and he continues to have absolute faith in his brother's integrity.  This investigation is in the early stages, and the governor would encourage people to withhold judgment until all of the facts are known."

In addition to the raid at the Pilot Flying J headquarters on Monday, homes of various employees in Tennessee, Iowa, and Kentucky were searched.


Read the Search Warrant Affidavit:

 

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