The Associated Press is reporting that the board of Pilot Flying J, which is owned by the Haslam family, “has agreed to pay the ex-staffers legal bills,” in the upcoming fraud trial set to begin next week in Chattanooga:
The truck stop chain controlled by the family of Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam has publicly distanced itself from former employees charged with defrauding customers. But court records show the board of Pilot Flying J has agreed to pay the ex-staffers legal bills.
Pilot Flying J has been under scrutiny in recent years because of a diesel fuel rebate scam. Fourteen former staffers have pleaded guilty, while another four — including the company’s former president — are scheduled to go on trial on Oct. 31.
Court records indicate a May 2013 “undertaking agreement” in which Pilot agreed to cover attorneys’ fees and other expenses. They agreed to repay the money if they are convicted or lose on appeal.
The FBI began investigating the Pilot Flying J scandal back in 2012, around the time CEO Jimmy Haslam purchased the NFL’s Cleveland Browns for a little over $1 billion.
Jimmy Haslam has not been charged in the scandal, although sources familiar with the operation of Pilot Flying J say that it is hard to imagine that former President Mark Hazelwood would not have informed Haslam of the details surrounding the allegations, given Haslam’s hands on management style.
The ongoing investigations of Pilot Flying J are said to have played a role in the announcement that Warren Buffet’s Berkshire Hathaway is purchasing a 38 percent interest in the company this year, with the intention of acquiring 80 percent ownership in the company over six years.
“The Maggelet family’s FJ Management Inc. will keep its 11.3 percent stake in Pilot Flying J until 2023, when Buffett plans to become the company’s biggest shareholder. Buffett will boost his stake to 80 percent at that point, leaving the Haslams with a fifth of the business,” Bloomberg reported.
That timeline could accelerate in the event Jimmy Haslam runs into legal difficulties stemming from the ongoing fraud investigation and trials.