Prosecutors want court to restore convictions in Pilot Flying J rebate scheme

Prosecutors are asking a U.S. Court of Appeals to reinstate the convictions of three former Pilot Co. executives that were overturned in October.

Former president Mark Hazelwood, former vice president of national sales Scott Wombold, and former regional saleswoman Heather Jones were convicted in 2018 for their roles in a scheme to bilk small trucking companies out of fuel rebate money.

In October, the U.S. Court of Appeals for the Sixth Circuit overturned those convictions because audio recordings of Hazelwood using racist and misogynistic language that were used during the trial were found to be in violation of the Federal Rules of Evidence.

In a 2-1 ruling, the court held that the recordings were not directly related to the case and could unfairly prejudice a jury against the defendants.

But in court documents filed on Nov. 30, prosecutors argued that the judges misunderstood the reason the recordings were admitted in the first place.

“The United States had proffered the recordings to rebut Hazelwood’s assertion that he was too good an executive and businessman to do anything that could jeopardize the company’s viability and success,” prosecutors argued in their petition for a panel rehearing. “By stating that Hazelwood’s racist and sexist remarks merely revealed his ‘seriously misguided personal beliefs,’ the majority implied that racism can be compatible with good business practices.”

Prosecutors are asking that the court vacate its earlier opinion and reaffirm the convictions of the three defendants. The court has not yet responded.

Manual rebate fraud scheme

Eighteen employees of Knoxville, Tenn.-based Pilot Co. were charged in connection with the conspiracy, which sought to entice trucking companies to purchase fuel from Pilot and Flying J truck stops at a discounted price via a rebate offer. Before Hazelwood’s trial began in late 2017, 14 other Pilot Co. employees and executives had already pleaded guilty to conspiring to commit wire or mail fraud. Karen Mann, a regional account representative who was tried jointly with Hazelwood, Wombold and Jones, was acquitted.

The rebate amount was manipulated by Pilot Flying J staff.

Another former executive, Vince Greco, turned FBI informant in exchange for immunity and recorded the tapes at a corporate retreat in October 2012.

The jury trial lasted 27 days, with nearly 30 witnesses, including cooperating Pilot employees who pleaded guilty for their roles in the conspiracy. The jury returned its verdict after deliberating for five days. They found Hazelwood guilty of conspiracy to commit mail fraud and wire fraud as well as witness tampering. LL

Land Line Now news anchor Terry Scruton contributed to this report.