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Feds allege Pilot Flying J has engaged in “fraud” for 5-7 years


It’s really hard to be a Browns fan.

Three days ago, the FBI and IRS raided the headquarters of Pilot Flying J, the company run by Browns owner Jimmy Haslam III and founded by his father in 1958. On Tuesday, Haslam downplayed the issue in a session with the media, calling it a minor issue involving a “very insignificant number” of customer rebates, involving no tax violations.

The federal government disagrees. Strongly.

According to the Cleveland Plain Dealer, documents filed in court on Thursday allege that Pilot Flying J engaged in fraud aimed at keeping money owed as rebates for “many years.”

And it gets worse. The federal government alleges that Jimmy Haslam knew about the practice, which “targeted unsophisticated trucking companies.”

A 120-page affidavit contends that the scheme was in place for five to seven years, and that one company lost nearly $150,000 because of it. The affidavit refers to a “confidential informant” who blew the whistle on the company’s practices -- and on Haslam’s knowledge of the alleged scheme.

The investigation began in May 2011, well before Haslam launched his effort to purchase the Browns. Whether and to what extent the league was aware of the situation when approving the transaction isn’t currently known.

Haslam abruptly returned to Pilot Flying J as CEO in February, only months after former PepsiCo president John Compton took the job. It’s now fair to infer whether Compton stepped down once he caught wind of what was going on.

It’s also fair to wonder how this will play out. Eddie DeBartolo lost ownership of the 49ers after pleading guilty to failing to report an extortion attempt in Louisiana, which triggered a one-year suspension by the NFL. If Haslam ultimately pleads guilty to or is convicted of any crime, the Browns could once again be changing hands.