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November 22, 2017 11:15 AM, EST
Former Pilot Flying J Staffer Implicates Ex-President Mark Hazelwood in Fraud Scheme
Michael Patrick/Knoxville News Sentinel

CHATTANOOGA, Tenn. — After hours of cross-examination in the ongoing Pilot Flying J fraud trial Nov. 21, Holly S. Radford refused to budge on two assertions – that what was going on within a sales division of the truck stop giant was wrong, and that former President Mark Hazelwood knew about it.

“Everyone knew about it,” Radford, a former regional account representative with Pilot Flying J, testified Nov. 21 in U.S. District Court in Chattanooga. “It was known, and it was generally accepted … I always knew it was wrong. If you blatantly put in a different discount to deceive them, I believe that’s wrong.”

“Did you think Mark Hazelwood knew what was going on?” asked attorney Rusty Hardin, who represents the ex-president.

“Yes,” she said.

‘We were making Pilot a profit’

Hardin pressed her for proof of Hazelwood’s knowledge.

“There were conversations with Mark at his house, on his boat,” she said. “It was just a general understanding this was going on, and we were making Pilot a profit.”

Hardin pressed harder. Radford wouldn’t budge, recalling a specific conversation with Hazelwood in late 2008 or early 2009 after salesman Jay Stinnett had boasted in an email of his monthly “savings” to Pilot Flying J via cheating trucking companies of $115,000 in promised diesel fuel discounts.

“Good number – 115,000 dollar screw,” Stinnett wrote.

Radford, who handled the paperwork for Stinnett’s fuel rebates, said Hazelwood told her, “It was a good job on Jay’s savings this month. It was just a brief passing in the hallway.”

“You were never instructed (to defraud trucking companies) by Mark Hazelwood,” Hardin said.

Radford answered, “Directly? No. It was known, and it was generally accepted.”

‘Right Not to Be Assumed’ Into Prison

After terming Radford’s assertions “assumptions,” not proof, Hardin asked, “You would agree these people have a right not to be assumed into the penitentiary?”

“Yes,” Radford answered.

Both Radford and Stinnett have pleaded guilty in what federal authorities say was a five-year fraud scheme that netted the nation’s largest diesel fuel retailer $92 million in ill-gotten profit and ended on Tax Day 2013 when the FBI and IRS Criminal Investigation Division raided Pilot Flying J’s Knoxville headquarters.

So far, 14 former Pilot Flying J executives and support staff have pleaded guilty to conspiracy to commit mail and wire fraud. Two others were granted immunity.

Hazelwood, former vice president of sales Scott Wombold, and regional account representatives Heather Jones and Karen Mann have pleaded innocent and are standing trial on charges including conspiracy to defraud trucking companies by paying far less than the discounts sales staff promised them for fueling up at Pilot Flying J instead of its competitors.

Pilot Flying J’s board of directors has confessed criminal responsibility. Pilot Flying J Chief Executive Officer Jimmy Haslam, who also owns the Cleveland Browns, has denied knowledge and is not charged.

‘We Were the Inside Girls’

Radford - like Mann and Jones - did the paperwork for Pilot Flying J salesmen and sales executives, and federal prosecutors Trey Hamilton and David Lewen contend the fraud scheme could not have been carried out without them.

To convince jurors Mann and Jones are innocent, their defense attorneys are using government witnesses like Radford and Katy Bibee, another former account representative who has pleaded guilty in the scheme.

“Would you consider yourself to be a greedy person?” attorney Sara Compher-Rice asked Bibee on Monday. “Would you consider Karen Mann to be a greedy person?”

“No,” Bibee answered.

Though all four face the same conspiracy charge, Mann and Jones are separated from their two co-defendants by their job duties, job descriptions and job authorities. There is a similar division between the 14 former Pilot Flying J employees who have pleaded guilty – a mix of sales executives and the female account representatives who did the paperwork for them.

“We were the inside girls, the inside ladies,” Radford testified.

Email Turned Evidence

Radford and Bibee, both of whom have struck plea deals, worked inside Pilot Flying J’s Knoxville headquarters with Mann, Jones and the other women who served as support staff for salesmen and sales executives.

The salesmen and sales executives – all men – spent their days on the road, meeting trucking company owners in person in a bid to get them to commit to buying diesel exclusively at Pilot Flying J truck stops.

They used email to stay in contact with their support staff. It is those emails – in which defrauding trucking companies was openly discussed – that prosecutors Hamilton and Lewen are using to prove the conspiracy case.

Bibee said it was the salesmen and sales executives who racked up big bucks in the fraud. The support staff cut was often as low as $10. The bosses decided who to defraud and for how much, she said.

‘She Was Like a Mom to Me’

But she and Radford conceded in testimony they were the ones who actually entered the fraudulent rebate amounts into the computer system at Pilot Flying J and were sometimes called upon to lie to trucking company owners.

Bibee acknowledged she felt “uncomfortable” with that part of her job but didn’t believe it her place to question the bosses.

“I didn’t feel like that was an option to verbalize,” she said. “I thought it was wrong (but) it was something I was told to do…I felt like they (Mann and Jones) wouldn’t question their bosses either.”

Rice and defense attorney Jonathan Cooper have used several government witnesses to paint an image of Mann as the office mom who surprised co-workers with birthday songs on their voicemails and provided entertainment at holiday parties.

“She was like a mom to me,” Bibee testified of Mann. “She helped through all my pregnancies and with being a working mother. She is a singer – not that she is good but she really loves to sing… She was just an encourager. It’s just who she is.”

The trial is in recess for the rest of the week but will resume Nov. 27.