One of the most shocking assertions made by the affidavit is that many top executives – including Jimmy Haslam himself – were aware of what the FBI is calling “Discount Fraud.” Here’s a piece of the transcript taken directly from the affidavit. One of the confidential informants is talking with the Vice President of Sales about what to do if a company catches on:
Confidential Informant: Well what if you can’t talk your way out of it? They figure out a way and they’ve got you nailed?
VP: You pay up.
Confidential Informant: Pay it?
VP: Yeah. Or you buy an airplane.
Confidential Informant: What does Mark and Jimmy say about **** like that? Do they even catch it or do they know?
VP: ****in’ A. I mean, I called Jimmy and told him I got busted at Western Express.
Confidential Informant: What’d he say?
VP: Oh he knew it.
Confidential Informant: Oh did he?
VP: Absolutely. I mean, he knew all along that I was cost-plussin’ this guy. He knew it all along. Loved it. We were makin’ $450,000 a month on him–
Confidential Informant: Holy s—t!
VP: – why wouldn’t he love it?
Confidential Informant: Yeah.
VP: Did it for five years, cost us a million bucks. I mean, we made $6 million on the guy, cost us a million bucks.
It is also reported that Haslam received several reports sent by email that would have shown the fraud in practice. This is in addition to an email reportedly sent by an employee on January 24th
, 2013 that “Jimmy Haslam and John Freeman were looking carefully at every Customer’s profit and loss report and consolidating duplicate entries. [The confidential informant] stated that the increased profit from Rebate Fraud would be clearly evident to Jimmy Haslam and John Freeman.”