CHATTANOOGA, Tenn. - In a bid to discredit a key government witness in the ongoing Pilot Flying J fraud trial, a defense attorney on Thursday offered up this question about any scheme to defraud customers:

“Would you agree with me it is incredibly dumb … from a business standpoint?” attorney Rusty Hardin asked about the judgment of former Pilot Flying J President Mark Hazelwood and current Chief Executive Officer Jimmy Haslam if, in fact, they approved of the $92 million fraud scheme.

“Would you agree if Mark Hazelwood and Jimmy Haslam … knew, allowing it is a dumb business decision?” continued Hardin, who represents Hazelwood.

Brian Mosher, former director of national accounts for the nation’s largest diesel fuel retailer and a confessed conspirator in the fraud scheme, answered simply, “Yes.”

Key witness on stand

Mosher was in his third day on the witness stand Thursday in U.S. District Court in Chattanooga, where Hazelwood and three subordinates are standing trial on charges including conspiracy to commit wire and mail fraud by deceiving trucking companies with promises of higher discounts on diesel fuel than actually paid them.

He and 13 other former Pilot Flying J sales executives and staffers have pleaded guilty. Two others have been granted immunity. Pilot Flying J’s board of directors has confessed criminal responsibility. Haslam, who also owns the Cleveland Browns, has denied knowledge and is not charged.

Mosher is a key witness for Assistant U.S. Attorneys Trey Hamilton and David Lewen. He has authenticated secret recordings in which he taught the art of fraud at a mandatory sales training meeting at Pilot Flying J headquarters in Knoxville in November 2012. Hazelwood speaks at the meeting of expanding “Manuel” – the code salesmen used for the fraud – to even more trucking companies in February 2013.

The recordings were made by former Pilot Flying J salesman Vincent Greco, who has been granted immunity after he turned mole for the FBI and IRS Criminal Investigation Division in 2011. The fraud scheme, testimony has shown, stretched back to at least 2008 and continued until federal authorities raided the truck stop giant’s headquarters in April 2013.

Dutiful salesmen or renegades?

Hardin is using his cross-examination to paint Mosher and other sales executives who have testified against or will testify against Hazelwood as a band of renegade salesmen who were committing fraud under the noses of both Hazelwood and Haslam.

On Thursday, Hardin zeroed in on the fact that as a percentage of total profit for Pilot Flying J, the fraud accounted for only a small portion of the firm’s revenue stream. He did not address testimony that the bogus discounts were also used to lock in loyalty agreements from trucking companies, which allowed Pilot Flying J to grow the number of truck stops it operated during the five-year conspiracy.

“How was it to the advantage of (Pilot Flying J) to risk everything … by lying to customers?” Hardin pressed Mosher.

Mosher replied, “I can’t give you any reason why it was a good idea. I didn’t think it was a good idea.”

'Everyone in the room knew'

Mosher has testified he began defrauding trucking companies in 2008 after he learned John "Stick" Freeman, vice president for sales, was already doing so and after, he said, Hazelwood all but ordered him to get on board with the scheme.

Hardin also attacked Mosher’s repeated use of the phrase “cheating customers” during his testimony, noting the words “cheat” and “fraud” were never used in a meeting of executives secretly recorded by Greco in October 2012.

“No where in this is anybody talking about cheating the customer,” Hardin said.

Mosher answered, “Everyone in the room knew that’s what we were talking about. We all knew what that meant.”

The trial won’t resume again until Wednesday because of scheduling issues cited by U.S. District Judge Curtis Collier.