The trial of four former Pilot Flying J officials accused of fuel rebate fraud started this week. The prosecution and defense offered opening statements in a Tennessee courtroom, with prosecutors painting a picture of an alleged culture of deceit at the company.
by Staff
November 7, 2017
HDT file photo
2 min to read
HDT file photo
The Pilot Flying J Fraud trial has started this week with the prosecution and representatives of the four accused former executives offering opening statements in a Chattanooga, Tennessee, courtroom.
Mark Hazelwood, former executive vice president and president of Pilot Flying J, Scott Wombold, former vice president of national accounts, and two former sales representatives, Karen Mann and Heather Jones, are on trial for a diesel fuel rebate scam. In a case dating back to 2012, the FBI found that Pilot defrauded as many as 5,500 customers of more than $56 million in rebates that were owed but never paid. The company reached settlements with authorities and customers in 2014 for $92 million and $87 million respectively.
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In an opening statement, federal prosecutors described the sales department of Pilot Flying J as being "infected" with fraud, according to local news channel ABC 6 Wate.com. The defendants were accused of lying to and cheating customers in order to profit themselves, specifically going after customers that it saw as easier targets.
In September, four former Pilot employees plead guilty to mail fraud and wire fraud in connection with the scam, including former Pilot Sales Vice President John Freeman, former Pilot Regional Sales Manager John Spiewak, former Director of Inside Sales Vicki Borden, and former regional sales representative Katy Bibee. Prosecutors said it was likely that the 14 former Pilot employees who have pleaded guilty for their roles in this scandal will be brought in as witnesses.
Attorneys for Hazelwood and Wombold argued that their clients were only guilty by association. Attorneys for Mann and Jones argued that their clients did not intend to commit fraud and were unaware of any conspiracy to scam customers, according to a CBS Cleveland report.
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The FBI and IRS raided Pilot Flying J headquarters in Knoxville, Tennessee, in 2013, gathering evidence that included emails and audio recordings of Hazelwood and his alleged co-conspirators discussing their intent to cheat less-sophisticated trucking companies out of their rebates. In one recording, Hazelwood allegedly not only gave verbal approval of the expansion of the fraud scheme but also directed his sales executives on how to choose victims.
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