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The Journal Gazette

  • Associated Press Former Pilot Flying J President Mark Hazelwood, left, leaves federal court after being arraigned in Knoxville, Tenn., last year. Hazelwood is back in court this week in Chattanooga, Tenn.

Wednesday, November 08, 2017 1:00 am

Flying J scam role denied

Executives deny any knowledge, calling it guilt by association

ERIK SCHELZIG | Associated Press

CHATTANOOGA, Tenn. – Attorneys for two former executives at the Pilot Flying J truck stop chain told jurors on Tuesday that their clients shouldn't be found guilty by association with other members of the company's sales team who pleaded guilty to the scheme to defraud customers through diesel fuel rebates.

The rebate scam caused the company to pay an $85 million settlement to jilted customers and a $92 million penalty to the government. Pilot is controlled by the family of Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam, who have denied any prior knowledge of the scheme and have not been charged.

The company operates two locations in Allen County.

Defense attorneys presented their opening statements on behalf of former Pilot President Mark Hazelwood, former Vice President Scott “Scooter” Wombold and two former saleswomen, Heather Jones and Karen Mann, on the second day of the trial Tuesday. Federal prosecutors have said some of the 14 former employees who pleaded guilty will testify against their onetime Pilot colleagues.

“What motivates them on the witness stand?” said Wombold attorney John Kelly. “It used to be money; now it's something a lot more important.”

Kelly said his client did not participate in the scheme, and even saw his professional prospects dim as others who were directly involved in the fraud rose to positions of prominence within Pilot.

Wombold was the supervisor of Brian Mosher, a former Iowa-based sales director whose guilty plea agreement says he held break-out sessions during an annual sales meeting to show colleagues how to defraud trucking companies without getting caught. Wombold's attorney described Mosher as a “lone wolf” whose connections to the upper reaches of the company granted him wide autonomy to strike deals and change them without the customers' knowledge.

Wombold may have had knowledge about the illegal practices, but did not engage in them, Kelly told the jury.

“He didn't like it, didn't do it, didn't encourage it,” Kelly said.