NASHVILLE -- With a year-long federal fraud investigation looming over it, the huge truck-stop chain owned by the family of the Cleveland Browns owner and Tennessee's governor is doing some housecleaning at its highest levels.
Several top executives at Pilot Flying J, including the president, abruptly left this week, more than a year after FBI agents raided the Knoxville, Tennessee, headquarters of the nation's largest diesel retailer. Ten former employees have previously pleaded guilty to helping cheat trucking companies out of promised rebates and discounts.
Those cases and this week's departures, observers note, could indicate that prosecutors are entering the final phase of a methodical probe that has included records suggesting Pilot CEO and Browns owner Jimmy Haslam knew of the scheme, something he denies. One expert said Haslam might be cutting ties with his senior staff in a bid to persuade prosecutors not to charge the company his father founded decades ago, one in which his brother, Gov. Bill Haslam, still holds an undisclosed stake.
Pilot President Mark Hazelwood and Scott "Scooter" Wombold, vice-president of national accounts, left the company Monday, with Haslam sending a company-wide email thanking Hazelwood for his service but saying nothing about why or how he was leaving. Tuesday saw the departure of five more members of the sales team.
Dennis B. Francis, a Knoxville attorney who has worked in federal criminal defence for 40 years, said the only way this week's departures make sense to him is if some of the people leaving are co-operating with prosecutors.
For a defendant to get a lighter sentence than federal guidelines mandate, prosecutors have to file court papers saying that person provided substantial assistance to the government. Once prosecutors have the evidence they need to convict, they no longer offer any promises of special consideration.
"They call it 'getting on the bus,"' said Francis, who is not involved in the Pilot case. "And there's only so much room on the bus."
Wombold's attorney, John E. Kelly, said in an email that his client had been "helping the company repair many customer relationships during the past 14 months. Mr. Wombold's departure from the company is not connected to past guilty pleas entered into by former employees, and any inference that there is a connection is not accurate."
Hazelwood's attorney declined to comment.
Company representatives said they couldn't comment on specific personnel moves, which took place while Jimmy Haslam was meeting with fellow NFL owners in Atlanta.
"Nothing more should be read into the events of this week than things playing themselves out," spokesman Tom Ingram said Wednesday. "Otherwise, the company continues to go full steam ahead and business as usual, and is doing very well."
Jimmy Haslam has denied any previous knowledge of the fraud or any personal wrongdoing. The governor has said he is not involved with operating Pilot Flying J.
Pilot agreed in November to pay out nearly $85 million to settle claims in a class-action lawsuit with 5,500 trucking companies. Several companies have filed separate lawsuits against Pilot that are ongoing.
Nashville criminal defence attorney and former prosecutor David Raybin said that, based on his observations and experience, the departure of so many managers at once indicates that criminal charges could soon be filed. And he suggested that prosecutors are aiming high.
"You don't make a bunch of people plead guilty at the lower levels and then let the top people off with a fine," said Raybin, who does not represent anyone in the case. "They're potentially jailing five to 10 people. You don't do that unless you are targeting the highest levels of the company."
An affidavit filed last year to obtain a search warrant for Pilot headquarters states that a confidential informant told the FBI that both Hazelwood and Jimmy Haslam knew about the fraud at the company because it was discussed openly at sales meetings where both were present.
Randall Eliason, a former federal prosecutor who teaches at George Washington University Law School, said that while the sudden departures are unusual, they could mean any number of things.
For example, Pilot might be fearful that the company could be charged criminally, or the company's board of directors may have decided that the people who have left recently were partly responsible for what happened.
"One reason the company might fire them is to say, 'Look, we're cleaning house. We're getting rid of the bad people, so don't indict the corporation,"' Eliason said.
