A Tennessee jury has returned guilty verdicts for three of the four former Pilot Flying J employees on trial for fraud and conspiracy, including former Pilot president Mark Hazelwood.
Three other former Pilot Flying J employees were on trial as well, including former vice president of national sales Scott Wombold, and regional saleswomen Heather Jones and Karen Mann.
Hazelwood and Jones were both convicted of conspiracy. Hazelwood also was found guilty of witness tampering and fraud. Wombold was acquitted on the conspiracy charges but convicted of fraud. Jones was found not guilty on fraud charges. Mann was found not guilty of conspiracy, the only charge she faced.
On Friday, federal Magistrate H. Bruce Guyton ordered Hazelwood to be placed under house arrest pending the outcome of a sentencing hearing, according to court records.
While defense attorneys for Hazelwood repeatedly sought to portray Pilot Flying J CEO Jimmy Haslam as having knowledge of the scheme, Haslam has repeatedly denied any knowledge of the activities. He has not been charged in connection with the conspiracy.
Another 14 former employees have pleaded guilty to various charges stemming from the conspiracy. Some of those who have pleaded guilty are now testifying against their former colleagues.
The conspiracy came to light in 2013 following a raid on the company’s Knoxville, Tenn., headquarters by the FBI and the IRS. Pilot Flying J’s board confessed to criminal responsibility and paid a $92 million penalty. The nation’s largest truck stop chain also paid an additional $85 million to settle various lawsuits filed by customers.
The conspiracy involved fraudulent and false pretenses, promises and representations made to the targeted trucking companies, including fraudulently generated invoices and rebate amounts. The indictment alleges the conspiracy involved either or both “off-invoice fraud,” where the represented discount amount was not submitted to Pilot’s billing system for the customer’s invoices, and “rebate fraud,” where customers who received monthly rebate checks had portions of the full rebate amount “deliberately and fraudulently” withheld by various means.
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