Case against ex-Pilot CEO Mark Hazelwood dismissed

A federal judge has granted the government’s motion to dismiss the case against former Pilot Flying J President Mark Hazelwood and two other executives charged with fraud in connection with a fuel rebate scheme.

On Wednesday, July 28, U.S. District Judge Curtis L. Collier accepted the motion to dismiss the case with prejudice, meaning prosecutors cannot refile at a later date.

Federal prosecutors cited multiple factors in their motion to dismiss the charges, which stemmed from an FBI raid on Pilot’s Knoxville, Tenn., headquarters in 2013.

The combination of factors include the personal circumstances of certain government cooperators, limited government resources and the age of the case and the circumstances of “cooperators who have completed their sentences” and have since made statements “that would negatively affect the credibility of their testimony in a retrial.”

Last October, the Sixth Circuit Court of Appeals also overturned the convictions of Hazelwood, former Pilot Vice President Scott Wombold, and regional sales representative Heather Jones and remanded them for a new trial. The appeal was launched by an attorney for Hazelwood, who argued that offensive language on secretly recorded tapes prejudiced the jury against the defendants.

Hazelwood had been sentenced to 12 years in prison and fined him $750,000 after he was found guilty of fraud and conspiracy in connection with Pilot Flying J’s fuel rebate scheme.

Eighteen Pilot Co. employees were charged in connection with the conspiracy, which involved fraudulent and false pretenses, and promises and representations made to the targeted trucking companies, including fraudulently generated invoices and rebate amounts.

Fourteen pleaded guilty to various crimes in connection with the conspiracy.

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.

Pilot CEO Jimmy Haslam repeatedly denied any knowledge of the activities and was not charged in connection with the conspiracy. LL