Pilot Flying J's Ex-President Mark Hazelwood Found Guilty of Conspiracy in Fraud Trial
CHATTANOOGA, Tenn. — A jury on Feb. 15 found former Pilot Flying J President Mark Hazelwood and account representative Heather Jones guilty of conspiracy to commit wire and mail fraud. Former employees Scott Wombold and Karen Mann were found not guilty of conspiracy.
The jury found Wombold guilty on a single count of wire fraud.
Hazelwood also was found guilty of witness tampering and an individual count of fraud. He was acquitted on one count of fraud.
Hazelwood by Michael Patrick/Knoxville News Sentinel
Jones was found not guilty on four counts of fraud.
Mann was the only defendant not convicted on any charges.
Sentencing has been scheduled for June 27 for Hazelwood, Wombold and Jones.
A Pilot Flying J spokesperson gave this statement: "Our focus has been on the customers. Nearly five years ago upon learning of the improper transactions, we made whole every customer negatively affected, entered into a Criminal Enforcement Agreement with the government, cooperated fully with the government’s investigation, and made policy, procedure and staff changes to make certain nothing like this ever happens again.
“At Pilot Flying J, we remain committed to being a great partner to trucking companies across North America and serving our customers, team members and business partners.
Hazelwood, former Pilot Flying J vice president Wombold, and former account representatives Jones and Mann have been standing trial since November in U.S. District Court in Chattanooga on charges including conspiracy to commit wire and mail fraud.
Mark Hazelwood's attorney Rusty Hardin says he's "disappointed" with today's outcome. Plans to appeal. @6News — Bridgette Bjorlo (@bridgettebjorlo) February 15, 2018
According to the Associated Press, Wombold's lawyer, John Kelly, said his defense team would explore options for appeal on the one count on which Wombold was found guilty. "All along, Mr. Wombold desired only to be judged by a jury of his peers at trial," Kelly said in a statement. "Today, having done exactly that, he stands vindicated on six of seven counts."
Hazelwood, Wombold, Jones and Mann were accused in a five-year plot within the direct sales division of Pilot Flying J to use promises of hefty diesel fuel discounts to lure trucking firms to do business with the truck stop giant and then shorting those firms on what they were promised.
On Feb. 16, U.S. Magistrate Judge Bruce Guyton ordered house arrest for Hazelwood in lieu of jail, ordering him to remain at his home and wear an electronic monitoring device. Guyton ordered Hazelwood's jet disabled and his West Knoxville home used as security on a bond.
Fourteen former Pilot Flying J executives and staffers have pleaded guilty. Two others were granted immunity. Pilot Flying J’s board of directors has confessed criminal responsibility and paid out $92 million in criminal penalties and another $85 million in lawsuit settlements. The board is also picking up the defense bills for its former staffers, including Hazelwood.
Chief Executive Officer Jimmy Haslam, who also owns the Cleveland Browns, has denied knowledge of the fraud scheme and is not charged.
We may have a verdict in the #Pilot Flying J fraud case. Stay tuned, everyone... pic.twitter.com/mdJbdUG8TF — Bridgette Bjorlo (@bridgettebjorlo) February 15, 2018
Agents with the FBI and IRS Criminal Investigation Division raided Pilot Flying J’s Knoxville headquarters on Tax Day 2013 after having convinced former sales executive Vincent Greco to secretly record meetings at which the fraud scheme was discussed.
Jurors heard roughly 20 days of testimony by 26 witnesses, viewed hundreds of exhibits, including incriminating emails, and listened to secret recordings that not only captured fraud talk but also caught Hazelwood and his salesmen making racially offensive comments, using racial epithets, and mocking the Browns, the team’s fans and Pilot Flying J board members.
