Jury selection in Pilot Flying J fraud trial underway

By Land Line staff | Monday, November 06, 2017

Jury selection is underway in a federal fraud trial for four former executives of Pilot Flying J.

The four former Pilot Flying J employees scheduled to go on trial include the company’s former president Mark Hazelwood, vice president of national sales Scott Wombold, and regional saleswomen Heather Jones and Karen Mann.

The trial is expected to last into December.

Fourteen other former employees have pleaded guilty to various roles in a multimillion dollar scheme to bilk trucking companies out of rebates for fuel purchased at Pilot or Flying J travel centers.

In September, former vice president of sales John “Stick” Freeman, the man authorities say devised the fraud scheme, pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud.

As part of the plea agreement, Freeman admitted to participating in a scheme with at least 17 other Pilot Flying J employees from about Feb. 1, 2008, to April 2013. Ten other employees have pleaded guilty. Freeman is expected to testify on behalf of the prosecution during the trial.

Jimmy Haslam, Pilot Flying J CEO has not been charged in connection with the conspiracy, which involved several of the company’s highest executives in the sales division.

The alleged 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.

Pilot Flying J previously entered into an agreement with federal prosecutors to pay $92 million in fines and another $85 million in restitution to more than 5,000 customers.

 

 

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