Four Defendants and a Cache of Questions Face Jury in Pilot Flying J Fraud Trial

John Sommers II for Transport Topics

CHATTANOOGA, Tenn. - In a trial that exposed an underbelly of greed, fierce competition, thievery and even racism within a division of the nation’s largest diesel fuel retailer, jurors now face a slew of questions as the case comes to a close.

Was former Pilot Flying J President Mark Hazelwood a hard-charging, jet-setting businessman clueless to the fraud conspiracy among his sales executives and staffers as his defense team has claimed?

Or, as federal prosecutors allege, was Hazelwood a ruthless profiteer who pushed his sales executives to do whatever it takes – including cheating trucking firms of promised diesel fuel discounts – to grow Pilot Flying J’s market share and bottom line?

Was former vice president Scott “Scooter” Wombold a victim of fiercely competitive salesmen vying for his job – and his cut of Pilot Flying J’s profits – and, as his defenders have argued, queasy about all their talk of cheating trucking firms too unsophisticated to know they were being defrauded?

Or was Wombold a go-along to get-along type who readily signed off on the cheating by his subordinates, encouraged reluctant staffers at a mandatory training session to join in and pocketed his share of the profits, as federal prosecutors allege?

Were former regional account representatives Heather Jones and Karen Mann among a team of women tasked with doing their bidding of their thieving male bosses with no intent to cheat anyone, as their attorneys contend?

Or, as prosecutors insist, were Jones and Mann key cogs in the wheel of fraud who enjoyed the padded paychecks the scheme netted them?

Closing arguments set

Closing arguments are expected to begin Feb. 6 in U.S. District Court in Chattanooga in a trial that has stretched over three months, spanned roughly 19 days of testimony and included the legally controversial introduction of racist recordings as evidence.

Hazelwood, Wombold, Mann and Jones are the final four left at the defense table in the nearly five years since agents with the FBI and IRS Criminal Investigation Division executed a stunning daytime raid of the Knoxville headquarters of Pilot Flying J on Tax Day 2013.

They are accused in a wire and mail fraud conspiracy case that Assistant U.S. Attorneys Trey Hamilton and David Lewen say spanned at least five years. Its goal, they say, was to boost Pilot Flying J’s market share and profitability by luring small, unsophisticated trucking companies to switch their business to the truck stop giant with discounts on diesel fuel and then shortchanging them on those rebates.

Fourteen former sales executives and staffers of Pilot Flying J have pleaded guilty. Two more were granted immunity. Pilot Flying J’s board of directors confessed criminal responsibility and paid $92 million in criminal penalties and another $85 million in lawsuit settlements. Pilot Flying J is also picking up the defense tab for the firm’s former staffers, including Hazelwood.

CEO Jimmy Haslam, who owns the Cleveland Browns, has denied any knowledge of the fraud scheme and is not charged.

Mole in the mix

Testimony has shown that in 2011, the FBI and the IRS Criminal Investigation Division were tipped to incriminating statements made by former Pilot Flying J sales executive Vincent Greco about the fraud scheme and confronted him. He agreed to turn mole in return for immunity.

Greco carried a recorder in his pocket and secretly recorded audio of various interactions with other sales executives, including an October 2012 meeting of executives at the Rockwood lake house of former vice president John “Stick” Freeman, a November 2012 mandatory training session at Pilot Flying J’s headquarters at which the art of fraud was taught and a February 2013 meeting in Orlando, Fla., at which Hazelwood and Freeman talked about expanding the fraud to even more trucking companies.

Freeman pleaded guilty last year. Although Hamilton and Lewen summoned to the witness stand a slew of former sales executives and staffers who have also confessed guilt, the pair did not call either Freeman or Greco as witnesses.

Racism on tape

Greco not only recorded fraud talk at the October 2012 meeting at Freeman’s house but also captured Hazelwood and his sales executive subordinates using racial epithets, singing along to a racist country song, mocking Haslam’s football team, its players, fans and the city that serves as the team’s home base, and insulting members of Pilot Flying J’s board of directors.

In a legally controversial move, U.S. District Judge Curtis Collier allowed Hamilton and Lewen to play snippets of those racist recordings after Hazelwood’s defense team sought to show jurors Hazelwood was too savvy a businessman to engage in behavior, such as fraud, that would hurt Pilot Flying J’s reputation.

USA TODAY NETWORK - Tennessee – along with the Cleveland Plain Dealer, WBIR-TV in Knoxville, WKYC-TV in Cleveland, and the Chattanooga Times Free Press – is fighting for the unsealing of the entirety of the recordings, transcripts and related motions. Collier has not yet ruled.

Attorneys are scheduled to meet early Feb. 5 to go over final legal instructions for the jury and any remaining motions. Closing arguments are set to begin at 12:30 p.m., and likely will continue through late Feb. 6 afternoon. Deliberations could begin Feb. 7.

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