A federal magistrate judge is refusing to allow former Pilot Flying J President Mark Hazelwood to upend his defense team less than three months before he faces prison unless he can prove he’s not trying to delay his fate.
Hazelwood is staring down the barrel of a prison term of as much as two decades for his role as chief among a band of thieving sales executives at the nation’s largest diesel fuel retailer that cheated trucking companies of at least $56.5 million and as much as $85 million in five years.
He faces sentencing Aug. 22 in the Chattanooga courtroom of U.S. District Judge Curtis Collier on convictions including conspiracy to commit wire fraud.
Judge: Delay is not an option
In mid-May, Knoxville attorney Brad Henry filed notice Hazelwood had hired him and wanted to fire the attorneys who have been heading up his defense since his 2016 indictment. A day later, members of a New York law firm staffed with former federal prosecutors began filing notices that Hazelwood had hired them, too.
Henry quickly filed another set of documents seeking to attack Hazelwood’s lead defense attorney – Texas legal powerhouse Rusty Hardin – as the cause of his conviction.
U.S. Magistrate Judge Bruce Guyton is having none of it, yet.
Guyton noted federal rules lay out a strict procedure on switching up attorneys in the midst of a case in large part because criminals convicted at trial want to postpone their day of reckoning as long as possible.
“Although Mr. Henry agrees to be substituted for Mr. Hardin and his co-counsel, there will be no continuity of counsel, i.e., none of the attorneys who have represented Hazelwood at trial and throughout this case would be remaining,” Guyton wrote.
“Thus, the court has no assurance that Hazelwood, who will be represented by a totally new defense team, will be able to proceed with his sentencing hearing,” Guyton continued.
Collier already has ordered up a sentencing schedule constructed on the shoulders of Hazelwood’s August hearing. If Hazelwood’s sentencing is delayed, then hearings for his 19 former subordinates – either convicted alongside him or confessed – also must be postponed.
No flight for this jetsetter
Guyton ruled this week that Hardin and his law firm must file a motion – following the federal rules at play – and attach to it an affidavit from Henry “stating whether Hazelwood’s new defense team have any conflicts with the August … sentencing hearing and can be prepared to represent the (him) at his sentencing hearing.”
Collier, meanwhile, is refusing to allow Hazelwood – described by his own defense team at trial as a rich, jet-setting, hard-driving businessman - to fly to New York to visit his new attorneys and go over the case with them.
Guyton put Hazelwood on electronic lockdown inside his Sequoyah Hills home and ordered his private jet and speedboat disabled a day after a jury in U.S. District Court in Chattanooga convicted the former Pilot Flying J president.
Federal prosecutors Trey Hamilton and David Lewen argued Hazelwood was a wealthy man – even after losing his $26.9 million job at Pilot Flying J – with means to flee and places to hide.
His former bosses were paying him $40 million in a settlement over his employment contract and picking up his defense bill while he launched a half dozen businesses since he left the truck stop giant. All those businesses, testimony showed, are tied to the trucking industry.
Henry promised in his motion to allow Hazelwood to travel that Hazelwood would be kept under guard by Hazelwood’s wife and Henry’s wife as well as another attorney.
Collier, in his ruling, had a different solution: Use the phone.
“The court sees no violation of Mr. Hazelwood’s due process right or his right to counsel where he has methods other than personal interstate travel to communicate with the counsel he chose to retain,” Collier wrote.
A mole and a racist
Agents with the IRS Criminal Investigation Division and FBI raided Pilot Flying J’s Knoxville headquarters in April 2013 after a mole within the company secretly recorded fraud talk at executives meetings and a mandatory sales training meeting in 2012 and 2013.
Seventeen former Pilot Flying J staffers soon struck plea deals as did the truck stop giant’s board of directors. Its chief executive officer – Cleveland Browns owner Jimmy Haslam – denied any knowledge of the fraud scheme and was not charged. Two more former staffers were convicted alongside Hazelwood on varying charges.
Per an employment contract struck before the fraud plot was uncovered, Pilot Flying J is paying Hazelwood’s legal bills.
Records unsealed in the criminal case also showed the firm paid Hazelwood $20 million to keep him from going to work for a competitor, $4 million to settle an employment contract dispute and $16 million in “future unearned income.”
That settlement came after Haslam confronted Hazelwood over racist rants captured on the mole’s recordings that targeted the Cleveland Browns, its fan and the city in which the team plays, records show. Hazelwood, in turn, threatened to drag the Cleveland Browns into court in a fight over whether he had violated his employment contract.
Hazelwood promised in that settlement to keep quiet about the existence of the racist recordings and, if the recordings were publicly revealed by someone else, to take responsibility and shield Pilot Flying J from blame.
The recordings were kept under wraps – even from Collier, who is black – until Hardin began in his defense strategy at trial to try to portray Hazelwood as too savvy a businessman to endanger his fat paycheck at Pilot Flying J by ordering his sales team to shave pennies off promised discounts on diesel fuel.
Hamilton and Lewen argued in a secret hearing that USA TODAY NETWORK- Tennessee and media partners successfully fought to make public that Hardin’s strategy had paved the way for the prosecutors to play those racist recordings.
They contended Hazelwood wasn’t being business savvy when he aired his racist views among sales executives since Pilot Flying J would have faced protests and lawsuits if the public knew Hazelwood was a racist.
Collier agreed. That decision is now expected to be a key appellate issue in the case. Henry wrote in his motion that’s why Hazelwood wants to fire Hardin now.