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Thursday, April 18, 2013

Breaking News - FBI and IRS raid on Pilot Flying J

Truck stop competitor of Cleveland Browns owner Jimmy Haslam says Pilot Flying J rebates harm small businesses By John Caniglia, The Plain Dealer 

CLEVELAND, Ohio -- The rebates that Jimmy Haslam says are at the heart of a federal criminal investigation into his company have made it impossible for smaller, independent truck stops to compete against Haslam's massive Pilot Flying J, a trucking industry official says.
Burt Newman, the vice president of Professional Transportation Partners, said rebates are a standard practice in the trucking industry. What makes Haslam's company, Pilot Flying J, different is that the company's rebates are so ridiculously better than other competitors that few can put up a fight, Newman said.
"They offer rebates that are outrageous and impossible to compete against,'' Newman said. The company can offer such rebates because they have about 600 truck stops/travel centers across the country.
But Newman said he doesn't understand Haslam's explanation for the reason federal agents would raid Pilot Flying J. On Monday, FBI and IRS agents used four search warrants to obtain evidence from Pilot Flying J at its Knoxville location.
Haslam met with reporters Tuesday and said that the investigation stems from rebates that were owed to "a very insignificant'' number of small trucking companies that were never paid. Haslam said his company disagrees with the assessment. 
He explained the rebate system like this: A trucking company that buys 50,000 gallons of fuel from Pilot Flying J receives a certain amount of money as a rebate. If it buys 100,000 gallons, it receives another amount. 
Haslam denied wrongdoing and apologized to Cleveland. Haslam is the owner of the Cleveland Browns.
"At this time, I just don't buy it," said Newman, whose Tennessee company represents about 100 independent truck stops across the country. "If what Mr. Haslam is saying is true, then there is a problem with the federal government. Especially with something as minor as this. I think there might be more to be said."
He said companies with more than 100 trucks seldom look elsewhere for business, as they go with Pilot Flying J for its fuel. The rebates can be paid in the form of checks each month or they can be paid at the point of sale.
One Midwest trucking executive who declined to give his or his company's name said he doubts the federal raid at Pilot Flying J will impact the trucking industry.
"We electronically track the costs of gas daily," he said. "If they have the best price, they'll get our business. If someone else has the best price, then we'll go someplace else. That's it, exactly."

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