Federal Judge Dismisses Charges Against Former Pilot Flying J Executives
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A federal judge on July 28 granted a request by federal prosecutors to dismiss criminal charges against former Pilot Flying J President Mark Hazelwood and two other former company executives, all of whom were scheduled to be retried early next year on charges related to a massive diesel fuel rebate scheme.
Citing limited government resources and witness credibility problems, federal prosecutors on July 27 filed a motion to dismiss the charges against the executives.
Hazelwood, former Pilot Vice President Scott Wombold and former Pilot account representative Heather Jones were convicted by a Tennessee jury in 2018 in connection with a multimillion-dollar fraud scheme to siphon fuel rebates away from thousands of truckers.
Former Pilot Flying J President Mark Hazelwood shown with his wife, Joanne, in September 2018. (Caitie McMekin/Knoxville News Sentinel)
But a federal appellate court in October overturned the convictions on the grounds that a lower federal court permitted use of evidence that should not have been admitted.
In their motion to dismiss the 8-year-old case, prosecutors said, “The government has determined that a retrial in this case will require the testimony of cooperator whose personal circumstances cause the government to conclude that it would be inappropriate to compel her testimony, and, in any event, prevent the government from being confident in the reliability of that witness’ recollection of significant facts and circumstances.”
In addition, prosecutors said, “The government seeks this leave in good faith, that is with no intention of engaging in a ‘prosecutorial harassment’ scheme through a pattern of dismissal and recharging. In that vein, the government consents to dismissal with prejudice.”
Since October, attorneys for the executives and federal prosecutors have been sparring via court documents over the evidence and the impact of the appellate court overturning the case.
In reversing the convictions last year, the U.S. 6th Circuit Court of Appeals remanded the case to the district court for a new trial. In May, attorneys for the three executives asked a Chattanooga, Tenn., federal judge for a change of venue to another state for that planned retrial. But with the judge’s order for dismissal, the retrial is now shelved.
The appeals court said the federal district court wrongly admitted recordings of Hazelwood using “deeply offensive racist and misogynistic language” on the theory that if Hazelwood was “reckless enough to use language that could risk public outrage against the company, he was a ‘bad businessman,’ and as a bad businessman, he was also reckless enough to commit fraud.”
In a related affidavit also filed in May, Hazelwood asked Senior U.S. District Court Judge Curtis Collier to recuse himself from the retrial, saying his actions during the trial were biased and that allowing the recordings to be heard by the jury showed that “a reasonable person, if aware of all the relevant circumstances, might question the court’s impartiality.”
The case against the three executives and others began with a raid on Pilot’s headquarters in Knoxville, Tenn. More than 50 FBI and IRS agents poured into the company’s three-story offices on the afternoon of April 15, 2013.
Prior to Hazelwood’s trial, 14 former Pilot sales executives had been charged, pleaded guilty and agreed to cooperate with the government while awaiting sentencing. Hazelwood originally was sentenced to 12½ years in prison and fined $750,000, but he never spent time behind bars.
Pilot already has paid the federal government a $92 million penalty to take responsibility for the criminal actions of the employees involved, but the agreement did not preclude individual prosecutions.
In November 2013, a federal judge in Arkansas approved an $84.9 million settlement offer from Pilot to reimburse as many as 5,500 customers included in a class-action lawsuit against the company.
wwitv.com
Jim Walden, Hazelwood’s lead attorney, said all along he has maintained the executives’ innocence.
“I have to restrain my comments to what’s on the public record,” Walden, an attorney for the New York law firm of Walden Macht & Haran LLP, told Transport Topics. “But I don’t think it takes much imagination to follow the breadcrumb trail here.”
Walden said the prosecutors’ motion for dismissal coming so late in the case was unusual.
“It was a long journey. It was a hard journey,” Walden said. “There were documents that were buried in a database that undercut the government’s core theories. I really do believe that if all this evidence had become known before the trial, there would have not been a conviction.”
A spokeswoman for the U.S. Attorney’s Office in Knoxville, Tenn., declined comment on the dismissal.
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