Ex-Pilot Flying J president asks to delay start of prison term until after holiday season

By Greg Grisolano, Land Line Digital Content Editor | Tuesday, October 23, 2018

Former Pilot Flying J president has asked to delay the start of his 12-year sentence in federal prison until after the holiday season, according to a request filed by his attorneys.

Hazelwood was the highest-ranking member of the company’s executive team to either plead guilty or be found guilty in connection with a fraud conspiracy involving the company’s fuel rebate program.

Hazelwood was one of three former Pilot Flying J employees found guilty in February. 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 mail and wire-fraud 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. Another 14 former employees have pleaded guilty to various charges stemming from the conspiracy. Some of those who have pleaded guilty testified against their former colleagues.

Hazelwood has been under house arrest since February. He has filed motions to appeal the case at the U.S. Sixth Circuit, including a motion that he be released from custody pending the appeal. The Sixth Circuit has yet to rule on those motions.

While Hazelwood was initially ordered to report to prison on November 26, his codefendants Wombold and Jones are ordered to report on Jan. 7, 2019.

In a motion requesting the delay, Hazelwood’s attorneys cited their client’s compliance with the terms of his house arrest, and his full payment of a $750,000 fine imposed on him during his sentencing hearing in September. They also argued for a later date so as not to create a “sentencing disparity” between Hazelwood and his codefendants.

His lawyers also cited his “devout Christian” religious beliefs as a reason for granting the extra time at home.

“Mr. Hazelwood’s desire to spend time with his family over the holiday – perhaps the last Christmas he will spend with his family for many years – is rooted in not only his family values, but his deeply held religious beliefs,” the motion states.

Federal prosecutors argue that there is no sentencing disparity, since the length of Hazelwood’s sentence and his “vast financial resources” are distinguishing circumstances between he and his codefendants, “who have fewer resources to flee and were sentenced to significantly shorter terms of imprisonment” according to a motion filed in response on Wednesday.

Prosecutors also noted that The Federal Bureau of Prisons has policies to “provide inmates of all faith groups with reasonable and equitable opportunities to pursue religious beliefs and practices.”

“Hazelwood’s asserted religious beliefs are therefore not a basis to delay his self-report date,” prosecutors stated.

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 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.

While defense attorneys for Hazelwood repeatedly sought to portray Pilot Flying J CEO Jimmy Haslam as having knowledge of the scheme, Haslam repeatedly denied any knowledge of the activities. Haslam has not been charged in connection with the conspiracy.

Copyright © OOIDA