Case against Pilot Flying J involves extensive recorded conversations

AP

Predictably, Browns owner Jimmy Haslam denies wrongdoing by the company he runs, Pilot Flying J, in connection with customer discounts and rebates.  Even more predictably, the FBI and IRS wouldn’t have descended on company headquarters on Monday without evidence to support the allegations.

The evidence seems extensive, and much of it in the form of secretly recorded conversations.  Those conversations include an admission from a key employee of the company that Haslam was aware of the practice of shorting customers.

The 120-page affidavit was posted by the Cleveland Plain Dealer after being filed in court on Thursday.  We’ve read the entire thing.

The affidavit explains at paragraph 6 that a confidential informant contacted the FBI on or about May 4, 2011 to report that another employee of Pilot Flying J had confided “that certain Pilot employees had been intentionally defrauding some of Pilot’s Customers by deliberately charging these Customers a higher price than the contractually agreed upon price, and then concealing the fact and nature of this increased price from these victimized customers.”

The informant recorded conversations with the other employee, who then agreed to cooperate in the investigation.  The second employee, after entering into a non-prosecution agreement, provided information about the fraudulent practices — and began recording conversations with other Pilot Flying J employees.

The affidavit contains excerpts from numerous conversations and meetings.  For example, at paragraph 63 of the affidavit Pilot Flying J V.P. of Sales John Freeman had this to say during an October 25, 2012 Regional Directors meeting at Freeman’s lake house:   “Hey this is a game.  We’re playin’ f–kin’ poker with funny money, and it’s liar’s poker with funny money because of all this cost-plus stuff.  So, you know, I’m not, I don’t want to get into a moral or ethical conversation, because I believe that if a guy’s gonna butt-f–k you then we got to go to butt-f–kin’ him harder. . . . Some people are tits and some people ass guys and some people want their discount managed through the system and some people like a big check.  I mean, f–k, sell it to ’em the way they want to buy.  And understand, the f–ker’s got the ability to know what the hell you’re doing to ‘em.  Okay?”

Freeman said later in the meeting, “F–k ’em early and f–k ’em often.”

Freeman referred repeatedly to having to “buy an airplane” when Western Express, a trucking company, realized what was happening.  Specifically, instead of paying Western Express $1 million to rectify the situation, Pilot Flying J bought an airplane from Western Express that was on the books for $7 million, and on which Western Express owed $1 million.

At paragraph 81 of the affidavit, a recorded conversation contains an admission from Freeman that Haslam knew about the Western Express situation.  “[H]e knew all along that I was cost-plussin’ this guy,” Freeman said.  “He knew it all along.  Loved it.  We were makin’ $450,000 a month on him why wouldn’t he love it?. . .  Did it for five years, cost us a million bucks.  I mean, we made $6 million on the guy, cost us a million bucks.”

The recorded conversations potentially represent the tip of the evidentiary iceberg.  The affidavit was submitted to justify the search warrants that the FBI and IRS executed on Monday.  The company’s files and computers (including email chatter) possibly will contain many more references to the alleged scheme.

In the interim, Pilot Flying J should prepare to buy more planes.  While the company allegedly preyed on unsophisticated trucking companies by shorting them on discounts and rebates, those unsophisticated trucking companies are likely sophisticated enough to hire lawyers who will sue Pilot Flying J for a full refund, plus punitive damages.

Likewise, Pilot Flying J can now count on its competitors aggressively trying to convert customers by printing off the affidavit, highlighting some of the comments from Freeman, and asking those customers if they really want to continue doing business with a company like Pilot Flying J.

While these are only allegations and both the company and its employees are entitled to the presumption of innocence, the contents of the affidavit paint a picture that can get ugly for Haslam, in multiple ways.  As to the biggest question — whether Haslam will face criminal liability — the most important witness of them all could end up being John Freeman.

If Freeman flips and gives persuasive testimony against Haslam, Jimmy could be going down.

94 responses to “Case against Pilot Flying J involves extensive recorded conversations

  1. I am sad this allegation has surfaced, but hope justice will be done. As a Browns’ fan, my hope is that the organization can overcome this and be a competitve part of a wonderful organization, the NFL.

  2. Because he’s a billionaire, Jimmy Haslem will be brought to justice and the penalty will be harsh and the reprocautions of his actions will result in other billionaires ensuring they follow the laws and regulations when they strive for the almighty dollar.

    Or not.

  3. Well it certainly sounds like Jimmy won’t be helping the Vols with anymore buyout checks for football coaches. This has documentary written all over it. Sort of like the one for Haliburton…”Smartest Guys in the Room” or something like that.

  4. A crooked tycoon, I’m shocked! At least he won’t be soaking Cleveland taxpayers for a new stadium now.

  5. The only fraud case I see here is the hiring of Michael Lombardi as GM. For that, he should receive life imprisonment.

  6. The browns s heddle was released and for the 16th straight year, the browns are already mathematically eliminated
    from the playoffs.

  7. This makes no sense.

    Why would someone rich lie, cheat and steal when he’s already rich?

    Rich people committing crimes?

    Bah! Illogical!

  8. Making gazillions ain’t enough for these guys. Here’s hoping he gets a jailhouse roommate with big hands and bedroom eyes……..

  9. “We were makin’ $450,000 a month on him why wouldn’t he love it?. . . Did it for five years, cost us a million bucks. I mean, we made $6 million on the guy, cost us a million bucks.”

    This is why we need stronger laws against Corporations in the US. This is basically what is going to happen them in the legal system. They made millions via corruption, and they’ll end up with nothing more than a fine that will only be a 2% of the money the earned by being corrupt. Then Monday morning they’ll start doing it all over again.

  10. I love whistleblowers with a passion. Everybody should learn to be a rat!

    It’s a critically important and valuable way to get rid of the bad guys whom possess power. I’d love to see society cleanse itself of all of the evil and corrupt people, and then next start focusing on ways to boot the people who suck at important jobs.

    If Haslam ever gets into a financial pinch though, at least he’s lucky for himself that he possesses such great experience at being an integrity expert and could find lots of work consulting for others to help them shore up that department, right?

  11. Wow, another oversight by Goodell. You think they could have hired an investigator and figured out there was a huge investigation. Now, they have an owner who is embroiled in a scandal. Good job, NFL.

  12. Remember. ..this scum bag was part of the Steelers organization when he did all these scum bag things.

  13. Cleveland is a blue collar city.This will not go well for Mr.Haslam ever wanting anything from the people of the city like a new dome stadium at our expense.He is pretty much screwed.Would love to see the team be owned by the fans like the packers.

  14. As a trucker, I been getting hosed for years by this outfit, so I stopped qoing there,,,spen $800 on fuel, and get charged $3 for using the ATM, as an example..throw the crooks in jail, I say….thieves.

  15. I became a BROWNS fan, just like a STEELER fan, just like a BENGALS fan, just like a RAVENS fan…..All of us in the AFC NORTH respect this thing we love…FOOTBALL
    We all argee that some rules, that have been implamented, water down are old school FOOTBALL….. But, now we should all agree, loudly, and PROUD…… Goodell, you girl, have the balls, to come down with the hammer, and make this Haslam piece of Stool, get the hell out of THE NFL……. Im a an American Trucker, a Father, a BROWNS fan, an NFL fan….FOR NOW

  16. vols84 says:
    Apr 20, 2013 10:49 PM
    Ooops…correction…Enron, not Haliburton
    __________________________________

    Why not both?

  17. Another failed investigation by the NFL. No one knew anything about these shady practices by Mr. Haslem. Of course not when you are blinded by greed.
    The NFL motto is “if it makes dollars, it makes sense.”

  18. “Jimmy might have a compound fracture.. Jimmy’s going into shock!!”

    “Jimmy’s gonna get you, Kramer! Jimmy holds grudges!”

  19. You’re building you stories on this using the FBI?! The same intel group who spent at least 5 years investigating Tamerlan Tsarnaev and his links to “Russia’s Bin Landen – Doku Umarov” and found nothing. Then more alerts sent to them in 2011 and 2012 about the terrorist links Tamerlan Tsarnaev had, and this same FBI still found nothing wrong. Well, Tamerlan Tsarnaev is now known as Boston Bomber #1. Maybe the FBI spent too much time investigating “rebate fraud” (yes, rebate fraud is a crime) and missed the Boston Bombers…

  20. So… Basically, what people are saying is — capitalism isn’t ideal? That ‘Merican socialization didn’t work for ya folks? Why, selfishness is something to be treasured! Hells bells!

  21. If found guilty the judge should go easy on him. Being the owner of the Browns is punishment enough.

  22. A player farts when he is not suppose to and they throw the book at him. If the allegations should prove true with the owner being aware of what was going on he should be banned from the NFL for life.

    Also with all that talk about butt f-kg, if they should end up in the joint they should feel right at Home.

  23. He will get a slap on the wrist. Its not a matter of IF these clowns are robbing everyone to make billions. Its just how, and how long the break they will have to take after getting caught.
    But lets deregulate the whole system. Because we can trust these guys with our livelihood and health. Just as long as we dont get in the way of them raking in the cash at our expense. I can’t wait to see what New chemicals I’ll find in my well next year…

  24. So maybe he should buy the Chevron corp. They been overcharging for gas for decades. Now they are 70 cents more a gallon because they blew up a refinery, making the consumer pay for their blunders is right up there with this crap. Che Ron stock gonna be real cheap soon, I won’t ever buy gas at chevron again but then again I’m not about to go hang out at a flying J either. Not to mention watch a Browns game!

  25. I said it before;
    The Feds don’t come knocking until they have it all buttoned up. Know why?
    Because who wants to be the guy who goes down in D.C. history and lore as the guy who couldn’t close the deal on Roger Clemons?

    It’s a wrap Haslam, enjoy whatever minimum security / country club they stick you in.
    Meanwhile if a guy stole 20 gallons of gas from Flying J, he’d do hard time for a lot less.

    Must be nice to be rich…

  26. If that’s not conduct detrimental to the league I don’t know what is.

    He is a slimeball and he is the kind of guy that would sit on as much cap space as you would allow just to pocket it.

    The Browns don’t need this clown bringing the team down.

  27. Taking this a step further, If it’s proven that Haslam used ‘ill-gotten gains’ from his business to purchase the Browns, it would be the next step for the lawyer’s of the truckers, who will surely form a class action suit to go after him, to sue both the prior owners of the Browns and the NFL, the same way the lawyer’s went after Madoff’s beneficiaries and early contributors to regain stolen $$$.

    js

  28. Insert the names of the 32 team owners and Roger Goodell in place of that Freeman guy and its the same thing that the league does to the fans.

    Yet the dolt public still pays for overpriced merchandise, season tickets which include the mandatory preseason games at full price, outragious parking, overpriced concessions.
    All while the league gives freebies to politicians, media, celebrities, and corporate personnell.

    Super Bowl tickets.
    0.5 % go to the fans that support the league

  29. So, what happens next? Does the NFL force him to sell? Would a potential new owner low ball him as he is forced to sell? Is he even allowed to sell at this point? Would the Feds freeze his assets pending trial? Could the Feds seize the team? This might be quite fun. Also, shouldn’t the head of NFL security who is in charge of vetting the owners be fired immediately?

  30. Is there any direct evidence against Haslam, other than the word of someone who says he was involved and that Haslam was “aware”?

    The uncorroborated word of someone accused of a crime is not proof of anything, other than that once confronted with the evidence, he may try to plea-bargain and try to give the feds the “big fish”.

    I’m not saying that Haslam wasn’t aware. I am saying that there’s no direct evidence YET.

  31. jshawaii22 says:
    Apr 20, 2013 11:52 PM
    Taking this a step further, If it’s proven that Haslam used ‘ill-gotten gains’ from his business to purchase the Browns, it would be the next step for the lawyer’s of the truckers, who will surely form a class action suit to go after him, to sue both the prior owners of the Browns and the NFL, the same way the lawyer’s went after Madoff’s beneficiaries and early contributors to regain stolen $$$.

    js
    _________________________________

    A. You are way off track on the course of this issue.

    B. Who signs their initials at the end of their statement on a blog? You are left with zero credibility.

  32. If somebody is going to butt f___k you then you have to butt f___k them harder ……..at least the prison plan was in place these fellows are progressive thinkers

  33. Raid the Browns headquarters too. Bet they will find plenty of evidence there. Considering the way Haslam has obviously been cost-plussing Browns fans.?m

  34. Max says: Apr 20, 2013 10:31 PM

    Lets see what the hypocrite Roger Godell does when Haslam is found guilty!
    —————————————————————
    Sure didn’t take long for some illiterate meathead to bring Goodell into this so go ahead and explain. Just HOW does this make Rodger a hypocrite? Do you know what hypocrite means? Explain this to us dummies.

  35. Lock up the whole thieving family. Think the Guv isn’t in on some of these deals? Think again.

  36. First off I hope that the city of Cleveland and the state of Ohio remember this when Jimmy ask for tax money to upgrade the stadium.

    Second off I do believe that Snyder was the last “New” owner of a NFL Franchise. I also believe that he had to pay $31 Million prior to his vote to become an owner. Never heard about any of that with Jimmy Haslam.

    Last but not least, I don’t believe that you become the owner and CEO of a multi-million if not billion business by being a good guy and playing by the rules.

    Signed….
    Edward J. DeBartolo Jr……

  37. jshawaii22:

    Well the NFL was providing a funding vehicle to support Haslam’s operations, so hopefully for the NFL’s sake the allegations are false.

    Haslam and the NFL are partners that mutually invest into each other and it would be unfortunate if the NFL had any possible reason to believe that they were supporting any type of illegal scheme so that the scheme would grow over time and then enable the NFL to profit from that growth. Surely they didn’t do that? Let’s ask Mr. Goodell just to clarify so we know for sure.

  38. The reason Haslam was fast tracked to NFL ownership is due to his relationship with the ROONEYS!!

    Goodell is beholden to Rooney (as well as Kraft and Mara) and must bend to his will.

    Surely a multi-billion dollar business like the NFL has a better vetting process than what has been demonstrated. A true travesty.

    Just another reason why Goodell has to go.

  39. The feds should focus more of their time and energy on catching terrorists.. Rapists.. Child molesters.. And murderers…. Just saying

    There was probably over 300 plus agents involved with at least two years of investigating and over a year of wire taps.. Someone gets raped, molested, or murdered they have one or two cops investigating.

    Crazy where our tax dollars go.

  40. After reading this, and taking into account what has happened on the Cleveland sports scene the past few years, the only reasonable explanation is this;

    God hates Cleveland

  41. This is a sad scenario for Browns fans. Being one myself, I find it totally deplorable that the NFL allowed such a smarmy individual to purchase our team. Our franchise has had little reason for hope since returning to the NFL in 2000, and this only compounds the misery. When will it end?

    PS: Mike Lombardi is still running our draft this year. 😦

  42. Whats funny is ,the FBI is there because what the
    the company did is of course illegal.The IRS is there
    only because the company didn’t report any earnings
    illegally gained or not.

    I would be more afraid of the IRS then the FBI if
    I was Haslam.

  43. The NFL supposedly vetted this guy and found him to be worthy of owning an NFL franchise. If there is such a thing as guilt by association, then this shows the league to be as corrupt as we thought it was. Goodell is a corrupt hypocrite. I hope none of the draftees hug this guy at the draft next week.

  44. This was a fun and challenging article to read after a day full of 420 activities. Happy 420 PFT writers and readers, pat yourself on the back and roll up, bubble up, and put on some Rush and break out the Doritos.

    Remember all f-lk them in the butt before they f-k you in the butt.

  45. Looks like the Browns will have a whole new owner in a few years!! This has to suck if you are a Browns fan.. This doesn’t look good at all and if anything slightly comes out of this, he will have to sell the Browns…

    Looks like the Ferttitas will get a chance to buy an NFL team after all!!

  46. This is despicable on every level. I hope it forces an imminent change in ownership.

  47. i am a colts fan who has lived in browns territory since i was 5 years old, 22 years. browns fans, despite very little return, have an unwavering love and support for their team that is surpassed by NO OTHER fan base in the nfl, or any other american major sports league franchise. if there is 1 organization whose fan base deserves the best it is the cleveland browns fan base. i am genuinely sorry that such a loyal and passionate fan base has to suffer through years of ineptitude and apathy and now THIS . my heaRT goes out to ya brownie fans….i am as anxious to see good fortunes come upon you guys as any one of your own, except when playing the colts of course ha!

  48. I thought leagues vetted possible owners? How did they not pick up on this? How do guys like this and loria in baseball get through? Makes no sense

  49. I must say I feel really bad for the Browns fan base. Browns fans are spread throughout the country and adore their team…they’ve been struggling for a long time and I’m sure they were hopeful Haslam was going to bring some stability to the organization and therefore some winning seasons. Looks like they will get more distractions and turmoil instead.

  50. The worst thing about Pilot/Flying J Truckstops is waiting in line to buy their cheap fuel. Even getting screwed out of agreed on discounts/rebates, companies likely saved money. Trucker’s already mostly dislike them, but line up to put the savings in their pocket. Haslem opened himself to this by buying an NFL team. Otherwise its just lawsuits and settlements and truckers swearing “I’ll never go back”, then sneaking in to buy their cheap fuel again.

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