The Trucker Newspaper - October 15, 2018

4 • October 15-31, 2018 Nation
THETRUCKER.COM
Former Pilot Flying J President Hazelwood sentenced to
12½ years in fraud scheme; gets $40 million settlement
THE TRUCKER STAFF
CHATTANOOGA, Tenn. — The former
president of the largest U.S. fuel retailer, who
has been sentenced to 12½ years in prison and
fined $750,000 for his involvement in a scheme
to defraud trucking companies, earned $26.9
million at the height of the fraud plot and has
been paid $40 million by Pilot Flying J since he
left the company after his arrest.
The Knoxville News Sentinel reported U.S.
District Judge Curtis Collier sentenced Mark
Hazelwood to 150 months on September 26.
Hazelwood was convicted earlier this year
of conspiracy, wire fraud and witness tampering.
The jury heard secret recordings of Hazelwood
using racial slurs and profanely criticizing
his board of directors and his boss’ football
team and fans. Hazelwood apologized for his
language.
“The motive was hubris — his competitiveness
… his desire to capture more market
share for Pilot,” Collier said, according to the
newspaper report. “The defendant improperly
took it upon himself to use the Pilot name and
reputation … This degree of commandeering
… the court is not aware of any reported case
where such a situation has happened.
“Mr. Hazelwood abused the trust of Pilot
and the trust placed in him,” Collier continued.
“The participants [in the fraud scheme] laughed
and joked about it. They used extreme and offensive
language. They used Pilot’s email …
cellphones … financial management system.
They talked openly of this criminal activity …
He violated the law on a constant and repeated
basis for half a decade.”
Collier is allowing Hazelwood to remain
free through November while the U.S. Bureau
of Prisons determines in what facility he will
be housed. He will remain under conditions
of house arrest imposed after his conviction in
February.
Hazelwood was convicted after a fourmonth
trial of conspiracy to commit wire fraud,
wire fraud and witness tampering.
He was the highest-ranking member of Pilot
Flying J who was convicted in the plot. Two
subordinates were convicted of varying crimes
alongside him, and 14 others pleaded guilty.
Two were granted immunity. Pilot Flying J’s
board also admitted criminal responsibility.
Court documents showed Hazelwood was
earning $26.9 million at the height of the fraud
plot — double his pay when the scheme began
in earnest.
Even after his indictment in 2016, Hazelwood
continued to make money from the
trucking industry. He heads a trucker recruitment
firm, a trucking consulting firm and markets
himself as an agent for truckers — all
while under house arrest.
According to testimony by Darren Ming,
who described himself as CFO of Hazelwood’s
other business interests, Hazelwood was involved
as “advisor” and “strategist” for Professional
Driver Agency, Conversion Interactive
Agency, EcoFlaps, Travel Center Experts, Fuel
Experts and ELDS.
Ming was listed as the agent who registered
Associated Press: MICHAEL PATRICK/Knoxville News Sentinel
Former Pilot Flying J President Mark Hazelwood, left, leaves federal court after his arraignment
in Knoxville, Tennessee, in February 2016. Hazelwood has been convicted
for his part in a five-year fraud scheme and has been sentenced to 12½ years in prison.
the companies with the Tennessee Secretary of
State’s office, beginning in 2014.
All the companies were formed after Hazelwood
left Pilot Flying J, court records showed.
Testimony in a detention hearing earlier this
year showed Hazelwood had residences in several
locations, including Italy, and had access
to a plane and boat.
Citing Hazelwood as a flight risk because of
his financial status and transportation possibilities,
the judge ordered the plane and the boat be
made inoperable.
He did acknowledge that Hazelwood had
been present for all his court hearings as required
by the court, however.
Trial testimony showed Hazelwood and his
subordinates used a diesel fuel discount program
Hazelwood created that was supposed to
allow small trucking companies the same type
of breaks on diesel fuel granted to much larger
firms.
But, court records show, Hazelwood and
his subordinates shaved pennies off those discounts
— with the trucking firms unaware.
Prosecutors Trey Hamilton and David Lewen
argued the fraud plot not only netted money
from the thievery itself but, more importantly,
lured trucking firms to do business with Pilot.
The Knoxville newspaper reported that
defense attorney James Walden argued Hazelwood
wasn’t “preying on old ladies.” Walden
said the trucking companies barely suffered —
if at all.
“They are not mom and pop stores,” Walden
said, according to the newspaper’s report,
“They’re corporations … You’ve never heard
from a representative of even one of these customers
… The victims have come forward in
droves to support [Hazelwood].”
At least four trucking company owners
who were listed as victims of the fraud plot —
which involved at least 78 firms — filed letters
of support on behalf of Hazelwood.
Walden argued Hazelwood revolutionized
the trucking and truck stop industry and has
used his wealth and his time for good deeds
after working his way up from “humble beginnings.”
Hazelwood denied guilt in his remarks.
“I’m devastated I’m having to stand before
you today,” the newspaper said he told the
judge before sentencing. “I will be appealing
my conviction. I do proclaim my innocence.
We should have had policies and procedures to
prevent this. We didn’t. I’m truly sorry.”
Pilot Flying J paid Hazelwood $40 million to
settle his employment contract when Pilot Flying
J CEO Jimmy Haslam fired him, a year after
the April 2013 raid on Pilot Flying J headquarters
in Knoxville that unraveled the scheme.
Pilot Flying J is also paying Hazelwood’s
legal bills as part of the contract settlement.
Lewen noted all that money Pilot has
shelled out when he urged Collier to hit Hazelwood
with a fine in addition to a prison term.
“Mr. Hazelwood is not being required to
pay one red cent to one victim in this case …
because the company Pilot Flying J has already
paid restitution to the victims in this case,”
Lewen said.
Collier described Pilot Flying J as a victim,
too, of Hazelwood’s fraud plot.
“Pilot had a good brand, but as a result
of the defendant’s actions … Pilot suffered
harm,” Collier said.
Pilot Flying J is controlled by the family of
Jimmy Haslam and Tennessee Gov. Bill Haslam.
The Haslams haven’t been charged with any
wrongdoing. The governor hasn’t been involved
in the company in recent years. 8
USPS 972
Volume 31, Number 20
October 15-31, 2018
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