CHATTANOOGA, Tenn. — Three months after the government launched its fraud conspiracy case against the former president of the nation’s largest diesel fuel retailer and three subordinates, a jury should begin deliberations next week.
U.S. District Judge Curtis Collier said Thursday closing arguments in the case against former Pilot Flying J President Mark Hazelwood and three former subordinates will begin Monday afternoon.
Those arguments are expected to span hours, and Collier said he anticipates deliberations will get underway on Wednesday.
Hazelwood, former Pilot Flying J Vice President Scott “Scooter” Wombold and former account representatives Heather Jones and Karen Mann are accused in a five-year scheme to defraud trucking companies by luring them with big discounts on fuel if they’d agree to switch their business to Pilot Flying J but shortchanging them behind their backs.
Fourteen other former Pilot Flying J executives and staffers have confessed guilt. Two other former staffers were granted immunity for serving as moles for the FBI and IRS Criminal Investigation Division. Pilot Flying J Chief Executive Officer Jimmy Haslam, who owns the Cleveland Browns, has denied knowledge of the scheme and has not been charged.
Assistant U.S. Attorneys Trey Hamilton and David Lewen rested their case Wednesday, and Hazelwood’s lead attorney, Rusty Hardin, announced he would not be summoning witnesses on Hazelwood’s behalf or sending his client to the witness stand.
Attorneys Ben Vernia, on behalf of Jones, and Jonathan Cooper, on behalf of Mann, announced Thursday in U.S. District Court in Chattanooga they, too, would not be sending witnesses to the stand to testify, including their clients.
Wombold’s defense team on Wednesday sent a forensic accountant to the witness stand to try to show jurors Wombold had little to gain financially from the fraud scheme. Attorney Eli Richardson on Thursday sought to play a recording — secretly made by mole Vincent Greco — in which Wombold complained Pilot Flying J executives made big money compared to the firm’s workers and advocated higher pay and better benefits for those workers.
But Collier ruled that Wombold’s comments, “while commendable,” have nothing to do with whether he participated in the fraud scheme.
“This is not relevant to the (alleged) infraction,” Collier said in blocking Wombold’s defense from playing the recording for jurors.
Richardson then formally rested the defense case on behalf of Wombold.
Paying the bills
The trial, which began in November but has included only roughly 19 days of testimony, came nearly five years after a stunning daytime raid of Pilot Flying J’s Knoxville headquarters on Tax Day 2013 and nearly seven years after the FBI and the IRS Criminal Investigation Division first began its probe of the fraud scheme.
Haslam initially denied the existence of any fraud scheme but promised an internal investigation. Hazelwood remained employed at the truck stop giant until May 2014. Pilot Flying J’s board has not made public the findings of its probe but later agreed to shell out $92 million in criminal penalties and $85 million to settle lawsuits filed by victimized trucking firms.
The board also agreed to pick up the defense bill for its accused employees, including Hazelwood, who was making $26.9 million at the truck stop giant in 2012. That bill likely will cost the firm millions. Testimony Wednesday showed, for instance, the board paid $250,000 just for the services of the forensic accountant who testified on behalf of Wombold.
Each of the four defendants are represented by some of the best — and priciest — defense firms in the nation. Pilot Flying J itself has paid for representatives of the Nashville firm Neal & Harwell to attend the trial on the firm’s behalf and shelled out money for a public relations firm to monitor media coverage of the trial.
Prosecutors Hamilton and Lewen say it was Pilot Flying J that reaped the rewards of the fraud scheme through increased market share and profitability.