Questions remain as two Pilot Flying J executives leave company

By Clarissa Hawes, Land Line staff writer | Tuesday, May 20, 2014

Two former high-ranking officials have left their positions at Pilot Flying J.

A source close to the Pilot Flying J investigation has confirmed that Mark Hazelwood, former president for Pilot, and Scott Wombold, vice president of national accounts, are no longer with the company. According to court documents, Hazelwood has been named as a defendant in some of the civil lawsuits filed against Pilot.

The source close to the investigation could not confirm whether their positions at Pilot had been terminated or whether they had resigned.

Since a criminal investigation was publicly launched into Pilot Flying J’s fuel rebate programs 13 months ago, the country’s largest truck stop chain has faced 31 federal and state lawsuits. A total of 10 former Pilot employees are awaiting sentencing for their roles in the alleged fraudulent scheme.

On April 15, 2013, agents with the Federal Bureau of Investigation and the Internal Revenue Service raided Pilot’s corporate headquarters in Knoxville, Tenn., as well as the homes of some of the company’s sales managers, seeking evidence about the company’s manual rebate practices. The investigation was launched after allegations were made that some employees who worked for Pilot had manually reduced diesel fuel price rebates or discounts it had with its customers.

A year later, many questions remain regarding the status of the criminal investigation. Pilot Flying J Spokeswoman Rachel Albright confirmed for Land Line that there have been “10 guilty pleas to date,” but would not elaborate if more were expected.

On April 7, the U.S. Judicial Panel on Multidistrict Litigation granted Pilot’s motion to consolidate the remaining seven federal lawsuits filed against the truck stop chain. However, 10 lawsuits remain against Pilot in state courts around the country, and more may be filed by trucking company customers who opted out of the $85 million class action settlement.

The four-judge panel decided the seven lawsuits filed in six federal districts will be consolidated and transferred to the U.S. District Court for the Eastern District of Kentucky. Pilot had requested in its motion that the cases be transferred to the U.S. District Court in Knoxville, Tenn.

“We preferred a Tennessee venue, but we are pleased the court has consolidated the remaining cases,” Albright told Land Line.

The alleged manual rebate scam was brought to light nearly two years after informants who worked for Pilot notified federal agents of an alleged conspiracy. Trucking companies were allegedly defrauded out of millions of dollars they were owed in rebates and discount programs for purchasing a certain volume of diesel fuel through the truck stop chain each month.

Pilot CEO James “Jimmy” Haslam III, also owner of the Cleveland Browns, has denied any involvement in the alleged fuel rebate scam.

“April 15, 2013, was an extremely embarrassing and humbling day for Pilot Flying J,” Haslam wrote in a statement. “Since then, we have pledged to make things right with our customers.”

In the statement, Haslam said that Pilot has paid “virtually every customer with interest” and has “put the proper systems and controls in place to ensure this type of behavior does not happen again.”

After the federal probe was launched, the initial word from Pilot was that only a small group of trucking companies had been targeted by the alleged manual rebate scheme. However, the scope of the investigation was quickly expanded. Of the approximately 5,500 members of the class that was part of the $85 million settlement, only around 60 trucking companies opted out of the deal to pursue their own legal action.

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