NFL Browns Owner Haslam in Hot Water with FBI/IRS

[Exe Gesis]

FBI, IRS still mum about Pilot Flying J investigation

Perhaps the most ominous aspect of Monday’s raid by FBI and IRS officials on the headquarters of Pilot Flying J, the company run by — and the self-proclaimed “first love” of — Browns owner Jimmy Haslam comes from the decision of the federal authorities to provide no information at all about the situation.

”Any details that would be released to the public would not be available for some time,” FBI spokesman Marshall Stone told the Associated Press in the aftermath of the lock down of the building. It came swiftly, with the apparent goal of ensuring that no evidence would be modified or destroyed.

This tactic suggests suspicion that the targets of the investigation knew that they were doing something that was illegal or close to it. Overall, the decision to swoop in and seize evidence implies that authorities were able to persuade a judge that probable cause exists to believe that one or more crimes have been committed.

Though the precise nature of the suspected crimes isn’t clear, the presence of the IRS points to potential violations of the federal tax laws, possibly arising from the manner in which this privately-owned billion-dollar business was keeping its books. Price-gouging claims in the wake of Hurricane Ike may have landed the company on the IRS radar; matters of this nature also may come to light after disgruntled and/or conscientious employees blow the whistle.

For now, it appears that nothing more will be said by the feds until the time comes to issue indictments, if Monday’s raid yielded the evidence that authorities believed they would find. None of this means that the charges will extend to the top of the organization, but it’s safe to say that the FBI and IRS will start at the bottom and work their way as high as the evidence will take them.

Absent some sort of a truck-stop omertà, there’s really no limit as to where this could go.

 

[Woodson]

Reading this article... Jimmy Haslam doesn't feel too perturbed even though it's not exactly something he embraces either.

http://msn.foxsports.com/nfl/story/browns-owner-Family-company-under-criminal-probe-041613

 

[Exe Gesis]

Short of knowing all the facts, if the company is found to be in breach of laws, fraud, felony, then it will fall on Haslam irrespective of him trying to act like he's not responsible being the owner. And he could/would be charged and thus couldn't own the Browns. Have to sell it. Unless of course, the NFL has some pull and they scapegoat someone else, etc, like they do often with players getting off on DUI, rape, etc.

 

[Woodson]

Short of knowing all the facts, if the company is found to be in breach of laws, fraud, felony, then it will fall on Haslam irrespective of him trying to act like he's not responsible being the owner. And he could/would be charged and thus couldn't own the Browns. Have to sell it. Unless of course, the NFL has some pull and they scapegoat someone else, etc, like they do often with players getting off on DUI, rape, etc.

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.

You kinda sense that pulling a fast one is much the reason why Haslam isn't too concerned.. no arrests made either (yet).

 

[Exe Gesis]

He can pull a fast one all he likes, but something will crop up, they'll recover deleted electronic transmissions/emails, whatever.

Haslam, in the OP i quoted, slips up by trying to distance himself from it, fobbing the blame off, means he is aware of it beforehand.

 

[Woodson]

He can pull a fast one all he likes, but something will crop up, they'll recover deleted electronic transmissions/emails, whatever.

Haslam, in the OP i quoted, slips up by trying to distance himself from it, fobbing the blame off, means he is aware of it beforehand.

I wouldn't be surprised if he gives Goodell a late call to let him know that it's his brother willing to take the heat and save the Browns any blushes for the NFL.. Goodell , may well, brush this episode under the carpet after all is said and done as I can't see this effecting the Cleveland Browns as a club.. if Haslam goes to jail... then the next guy steps up and it's just another day in Cleveland.

 

[Exe Gesis]

ESPN Cleveland believes Browns owner Jimmy Haslam could be asked to "step aside" until the FBI finishes its investigation into his travel center company Pilot Flying J.

"This is worse than a dark cloud. This is a funnel cloud," a source with knowledge of "both the legal system and the inner workings of the NFL" told reporter Tony Grossi. The source believes Haslam could be asked to "remove himself from operational control" of the Browns until there's a resolution, and possibly suspended if he declines. Former 49ers owner Eddie DeBartolo Jr. was suspended under similar circumstances in 1999. The NFL has so far declined comment. The league clearly isn't happy with its newest owner, who's tarnished the shield after less than a year on the job.

Source: ESPN Cleveland
Apr 19 - 8:40 AM​

 

[Exe Gesis]

Haslam’s company hires lawyer who represented Eddie DeBartolo

+

Case against Pilot Flying J involves extensive recorded conversations

Predictably, Browns owner Jimmy Haslam denies wrongdoing by the company he runs, Pilot Flying J, in connection with customer discounts and rebates. Even more predictably, the FBI and IRS wouldn’t have descended on company headquarters on Monday without evidence to support the allegations.

The evidence seems extensive, and much of it in the form of secretly recorded conversations. Those conversations include an admission from a key employee of the company that Haslam was aware of the practice of shorting customers.

The 120-page affidavit was posted by the Cleveland Plain Dealer after being filed in court on Thursday. We’ve read the entire thing.

The affidavit explains at paragraph 6 that a confidential informant contacted the FBI on or about May 4, 2011 to report that another employee of Pilot Flying J had confided “that certain Pilot employees had been intentionally defrauding some of Pilot’s Customers by deliberately charging these Customers a higher price than the contractually agreed upon price, and then concealing the fact and nature of this increased price from these victimized customers.”

The informant recorded conversations with the other employee, who then agreed to cooperate in the investigation. The second employee, after entering into a non-prosecution agreement, provided information about the fraudulent practices — and began recording conversations with other Pilot Flying J employees.

The affidavit contains excerpts from numerous conversations and meetings. For example, at paragraph 63 of the affidavit Pilot Flying J V.P. of Sales John Freeman had this to say during an October 25, 2012 Regional Directors meeting at Freeman’s lake house: “Hey this is a game. We’re playin’ f–kin’ poker with funny money, and it’s liar’s poker with funny money because of all this cost-plus stuff. So, you know, I’m not, I don’t want to get into a moral or ethical conversation, because I believe that if a guy’s gonna butt-f–k you then we got to go to butt-f–kin’ him harder. . . . Some people are **** and some people ass guys and some people want their discount managed through the system and some people like a big check. I mean, f–k, sell it to ‘em the way they want to buy. And understand, the f–ker’s got the ability to know what the hell you’re doing to ‘em. Okay?”
Freeman said later in the meeting, “F–k ‘em early and f–k ‘em often.”

Freeman referred repeatedly to having to “buy an airplane” when Western Express, a trucking company, realized what was happening. Specifically, instead of paying Western Express $1 million to rectify the situation, Pilot Flying J bought an airplane from Western Express that was on the books for $7 million, and on which Western Express owed $1 million.

At paragraph 81 of the affidavit, a recorded conversation contains an admission from Freeman that Haslam knew about the Western Express situation. “[H]e knew all along that I was cost-plussin’ this guy,” Freeman said. “He knew it all along. Loved it. We were makin’ $450,000 a month on him why wouldn’t he love it?. . . Did it for five years, cost us a million bucks. I mean, we made $6 million on the guy, cost us a million bucks.”
The recorded conversations potentially represent the tip of the evidentiary iceberg. The affidavit was submitted to justify the search warrants that the FBI and IRS executed on Monday. The company’s files and computers (including email chatter) possibly will contain many more references to the alleged scheme.

In the interim, Pilot Flying J should prepare to buy more planes. While the company allegedly preyed on unsophisticated trucking companies by shorting them on discounts and rebates, those unsophisticated trucking companies are likely sophisticated enough to hire lawyers who will sue Pilot Flying J for a full refund, plus punitive damages.

Likewise, Pilot Flying J can now count on its competitors aggressively trying to convert customers by printing off the affidavit, highlighting some of the comments from Freeman, and asking those customers if they really want to continue doing business with a company like Pilot Flying J.
While these are only allegations and both the company and its employees are entitled to the presumption of innocence, the contents of the affidavit paint a picture that can get ugly for Haslam, in multiple ways. As to the biggest question — whether Haslam will face criminal liability — the most important witness of them all could end up being John Freeman.

If Freeman flips and gives persuasive testimony against Haslam, Jimmy could be going down.

 

[Brasher]

I wouldn't be surprised if he gives Goodell a late call to let him know that it's his brother willing to take the heat and save the Browns any blushes for the NFL.. Goodell , may well, brush this episode under the carpet after all is said and done as I can't see this effecting the Cleveland Browns as a club.. if Haslam goes to jail... then the next guy steps up and it's just another day in Cleveland.

Eddie Debartolo says hi!

 

[KDSnap]

I am sure there will be a great Ivy League lawyer available with the 6th overall pick in the draft.

 

[Exe Gesis]

CBS Sports' Mike Freeman reports "several" rival officials believe it may be "extremely difficult" for Browns owner Jimmy Haslam to keep the team amid the federal probe into his truck-stop company Pilot Flying J.

"This is more worrisome than people know," said one rival official. Per Freeman, NFL sources are concerned about the "long-term viability of the Browns under Haslam's control" because of the rash of civil lawsuits he's facing in addition to looming federal charges. Haslam has repeatedly stated his innocence while insisting the Browns will not be affected, but has dodged all questions. His mind is going to be anywhere but Cleveland this summer.

 

[Exe Gesis]

Pilot Flying J exec: “Senior management” knew of rebate fraud

Maybe ESPN should bring back Playmakers. Not as a scripted show, but as a documentary.

At a time when a prominent NFL player faces apparently significant entanglement in a murder investigation, the league’s newest owner could eventually find himself facing a federal indictment.

According to Nate Rau of the Tennessean, Pilot Flying J executive Jay Stinnett stated in his plea agreement that “senior management were aware of the rebate reduction scheme” that has resulted in five guilty pleas, with possibly more on the way.

The document, per Rau, doesn’t identify specific members of senior management. The most senior member of management is Browns owner Jimmy Haslam, the CEO of Pilot Flying J.

Stinnett began cooperating with the federal government the same day the IRS and FBI showed up unannounced to search corporate headquarters, and other locations. Stinnett agreed to cooperate with investigators and to testify in any court proceedings.

The investigation focuses on rebates and discounts that were not given to customers deemed too unsophisticated to realize they were being shorted. Throughout the process, Haslam has downplayed the extent of the scam and denied any knowledge of it on his watch.
Look for the authorities to continue working their way up the Pilot Flying J ladder, prosecuting as far as the evidence will take them — even if (or especially if) it takes them all the way to the top of the company.

 

[Exe Gesis]

Amidst the federal probe into his truck-stop company Pilot Flying J, Browns owner Jimmy Haslam is selling his Double-A baseball team.

The Tennessee Smokies are an affiliate of the Chicago Cubs. Naturally, Haslam insists Browns fans have "absolutely zero to worry about." He's spinning it as a way to focus more on the Browns. "It does have something to do with Cleveland in that we’re obviously going to be spending more time there." The more pessimistic assumption is that Haslam is anticipating future money troubles, and starting to get his ducks in a row. Five of Haslam's former employees have already pled guilty in the probe, but his role in the scandal remains unclear.