Judge says no Christmas vacation for ex-PFJ executive convicted of fraud

By Greg Grisolano, Land Line Digital Content Editor | Monday, November 05, 2018

A federal judge in Tennessee has denied former Pilot Flying J president Mark Hazelwood’s request to delay reporting for his 12-year prison sentence until after the holidays.

Arguments made by Hazelwood’s attorneys failed to sway U.S. District Court Judge Curtis Collier, who ordered that Hazelwood should begin his prison sentence on Nov. 26.

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

Collier’s ruling specifically addresses the faith-based arguments, noting that while the defendant asked to be free to celebrate Christmas with his family, Easter, the most important Christian holiday, “would come just a few short months after Christmas.”

“If the Court attempted to set self-report dates that did not conflict with any religious holidays, it would be unable to set any dates at all,” Collier wrote.

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.

Collier’s ruling also stated that different self-surrender deadlines do not create sentencing disparities, and that the circumstances surrounding the codefendants are different from Hazelwood’s. Specifically, the judge pointed out that neither Jones nor Wombold have “the financial means or length of sentence that make (Hazelwood) a flight risk.”

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

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.

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.

 

 

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