Pilot CEO updates actions taken since federal raid

Oct. 3, 2013
Citing additional issues with its discount program, Pilot Flying J CEO Jimmy Haslam said the company had expanded its internal audit to include almost 7,000 trucking customers during an eight and half year period.

Citing additional issues with its discount program, Pilot Flying J CEO Jimmy Haslam said earlier this week that the company had expanded its internal audit to include almost 7,000 trucking customers during an eight and half year period.

The review included every diesel fuel account that had any type of rebate or discount relationship with Pilot since 2005. The initial audit targeted 400 trucking customers on a manual rebate program, the center of a federal fraud investigation that resulted in an April 15 raid of Pilot offices.

Still, Haslam told media during a briefing at the company's Knoxville headquarters that the rebate shortage represented "a fractional amount" of Pilot Flying J's diesel fuel sales during that period.

Of the 400 companies affected, all had been paid back with interest in early July. Others should be paid back in the next couple of months.

The move, Haslam said, was an effort by Pilot Flying J to identify any wrongdoings and resolve them immediately.

"We've actually expanded what we said we would do fairly dramatically in several different cases all in the spirit of doing the right thing and making things right with the trucking companies. You'll hear that theme several times today," Haslam said, noting that at any one time the company had 60 to 75 people working seven days a week on the audit.

Federal authorities raided Pilot headquarters nearly six months ago, and a federal affidavit alleged that some Pilot employees had engaged in fuel rebate fraud.

Seven Pilot workers have pleaded guilty in the case and a criminal probe is ongoing. Pilot also faces multiple civil lawsuits and has reached a settlement deal with several plaintiffs who sued in federal court. A fairness hearing will be held Nov. 25 in Arkansas.

Sitting behind a table in the company's training facility and museum dedicated to its decades long history, Haslam, who also owns the Cleveland Browns, acknowledged it has been "a very humbling, a very embarrassing time for myself, our family and for Pilot Flying J. There's no other way to say it."

Haslam, who flew back from Cleveland Sunday night, touted the company's progress in "making things right" and provided an update on actions the company has taken since the federal raid.

In addition to paying back the millions of dollars withheld in rebates plus interest, it eliminated its manual rebate program, placed almost every customer contract in writing and is rebuilding its sales team with industry veterans.

It also has established a four-person advisory committee to help create a compliance office within the company.

Pilot Flying J, which operates more than 600 truck stop locations throughout the U.S. and Canada, also continues to grow. It will have opened 25 new locations by years end with plans to expand next year.

"These are, obviously with the investigation going on and with the kind of economy we're in, not the easiest times, but the company is doing well and I think it's important to say that," Haslam said.

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