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Attorneys and others connected with the on-going investigation of Jimmy Haslam's PIlot Flying J thought the original tipster in the case may have been a low-level employee or disgruntled former employee of the truck stop chain. It turns out "Confidential Human Source 1" was a financial adviser from Morgan Stanley who had a client at Pilot Flying J who disclosed the alleged fuel rebate fraud.

(Alison Grant, The Plain Dealer)

CLEVELAND, Ohio -- The mystery person who was the FBI's first confidential informant in the investigation of potential fraud at Jimmy Haslam's Pilot Flying J turns out to be a former Morgan Stanley financial adviser who had a client employed at Pilot, according to a federal lawsuit filed in Tennessee.

A lawyer for John Verble on Tuesday confirmed that Verble was Confidential Human Source 1 (CHS-1) in an FBI affidavit that said Pilot Flying J's sales department systematically cheated trucking companies out of fuel rebates.

"Mr. Verble provided the information that put the FBI onto the Pilot Flying J fraud investigation," lawyer Jackie Sharp said in an interview. "Doing his job, he found out about violations of fraud and went to the federal government with the information."

The 120-page FBI affidavit was released in April 2013, days after agents descended on the Knoxville headquarters of Pilot Flying J, the nation's largest service plaza chain, run by Browns owner Haslam and his family.

Haslam has said he knew nothing of any wrongdoing at Pilot until the FBI raid. He has not been charged in the case, and said he has worked with prosecutors, including paying a $92 million civil penalty.

The informant's identity came as a part of a lawsuit Verble filed against Morgan Stanley, alleging he was wrongfully fired after the company suspected he was working with federal authorities.

Haslam attorney Aubrey Harwell said, "This is obviously a dispute between John Verble and Morgan Stanley," adding that it was "curious" that Verble folded in claims related to Pilot.

Verble's 21-page complaint (see in document viewer below) says he was fired in retaliation for his role as a whistleblower, which included uncovering not only alleged fraud at Pilot Flying J but also insider trading among employees at Morgan Stanley's Knoxville office and their clients in connection with an energy stock.

Morgan Stanley said in a statement: "There is no basis for the allegations made in this lawsuit, which Morgan Stanley will vigorously contest. Mr. Verble was dismissed and has resisted repayment of an outstanding recruiting incentive of $230,000."

Sharp said the information about Verble's involvement with the Pilot investigation was included in the lawsuit to show that Verble did in fact work with federal authorities.

Sharp said his client agreed to help in the FBI investigation of wrongdoing at Pilot and wore a wire "for several years," collecting information, including from a client who was a Pilot Flying J employee. He did not detail what Verble learned.

The FBI affidavit described conversations between CHS-1 and an employee, identified by the FBI as CHS-2, beginning in June 2011 and continuing into 2012.

In those conversations, which were recorded without the employee's knowledge, CHS-2 told CHS-1 that John Freeman, then Pilot's vice president of sales, and Brian Mosher, then Pilot's director of national sales, had been fraudulently withholding rebates from customers, according to the affidavit.

The investigation broadened from there. The FBI approached the Flying J employee, who began to cooperate. The government agreed not to prosecute. The employee gave the FBI information about the fraud, which he said was detailed at sales meetings.

Freeman has not been charged in the investigation. Haslam dismissed him in May. Mosher, according to his plea agreement with prosecutors, was responsible for defrauding between 50 and 250 customers. He and nine other former Pilot employees who have struck plea deals await sentencing.

The investigation continues.

After the raid at Pilot, Verble's lawsuit says, a manager at Morgan Stanley spotted Verble getting into a black sedan with tinted windows, accompanied by what appeared to be federal agents.

When the manager saw Verble getting into the sedan on a second occasion, with apparent FBI agents, Morgan Stanley questioned him about his involvement with federal authorities and subsequently fired him, according to the complaint.