Cleveland Browns owner Jimmy Haslam said Tuesday the federal government has launched a criminal investigation into rebates offered by the truck stop chain owned by his family, including his brother, Tennessee Gov. Bill Haslam.
Agents from the FBI and Internal Revenue Service raided the Pilot Flying J headquarters in Knoxville on Monday.
Jimmy Haslam, who is the CEO of Pilot Flying J, held a news conference in Knoxville to confirm the investigation is criminal, rather than civil, in nature.
“We don’t know a lot. It appears to be centered on a very insignificant number of customers and the application of rebates, that rebates that were owed to the customers were not paid. We, of course, disagree with that,” the CEO said.
Haslam said subpoenas had been issued to several members of his 23-person sales force, though he said he was unable to identify any specifically. Haslam said he had not been subpoenaed and no one has been arrested.
Bill Killian, the U.S. attorney in Knoxville, told The Associated Press that four search warrants have been served on Pilot, but the reasons have been sealed by a federal court.
FBI and Internal Revenue Service agents locked down the Pilot Flying J headquarters Monday afternoon and ordered most employees out of the building as they conducted their search well past midnight.
Haslam said essential personnel were allowed to remain in the building to ensure the company’s nearly 500 truck stops had sufficient fuel supplies. It was unclear why the IRS was involved in the raid, he said.
“It does not involve, as best we can tell — and I’m pretty sure we’re right — any type of tax issue,” he said. “So there’s no evasion of tax or federal taxes, which candidly is what your suppliers, particularly fuel suppliers, worry about.”
Investigators are looking at rebates offered to trucking company customers, the company said. Some trucking companies receive discounts or rebates on fuel purchases from truck stop chains.
Haslam said that the company is launching an internal investigation, and that his responsibilities as owner of the Browns wouldn’t be affected. He said he planned to travel to Cleveland this week and next as the team prepares for the NFL draft.
“First of all I apologize, because the last thing we ever want to do is put any kind of blemish on the city of Cleveland — which we’ve grown to love — or the Browns,” he said. “So I personally feel bad about that, even though I don’t think we’ve done anything wrong.”
Law enforcement experts say a likely reason for the suddenness of the search is that federal investigators want to preserve as much evidence as possible under a warrant approved by a federal judge.
Former federal prosecutor Jeffrey Neiman said search warrants are sought when investigators fear that documents could be lost or destroyed before being requested under subpoena.
“Search warrants of big companies are rare and they are going to be done when the investigators have a sense of urgency,” Neiman said.