Defense seeks mistrial in Pilot fraud case - WRCBtv.com | Chattanooga News, Weather & Sports

Defense seeks mistrial in Pilot fraud case

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UPDATE: The defense attorney for the former president of Pilot Flying J sought a mistrial Wednesday, arguing that secret conversations presented to a jury in an ongoing fraud trial were so prejudicial his client couldn't get a fair proceeding.

Government prosecutors presented transcripts and secretly recorded conversations that involved former president Mark Hazelwood and several other Pilot employees during a casual, social meeting in October 2012.

During one of the conversations, Hazelwood could be heard asking about a song by David Allan Coe with racially charged lyrics. In other parts of the conversation, recorded at the Rockwood lake home of John Freeman, a former Pilot Flying J vice president, the men present could be heard disparaging the Cleveland Browns and the people of Cuyahoga County, Ohio, in which Cleveland is located, among others.

U.S. District Judge Curtis Collier has not ruled on attorney Rusty Hardin's motion for a mistrial. Last month, Collier acknowledged before the evidence was presented that it contained highly offensive content.

The song referred to by Hazelwood can be heard playing in the background during the gathering, and the lyrics repeatedly refer to an epithet for black people.

Pilot Flying J on Wednesday reiterated statements that it was "appalled" and "disturbed" by the comments made in 2012. The company immediately acted after learning about the comments, according to the statement.

No current Pilot employee was present when the song was played and remarks made, the statement reads.

Attorneys for Hazelwood's three co-defendants, Scott Wombold, Heather Jones and Karen Mann, have objected to the evidence, arguing that even though their clients weren't present when the remarks were made that they still could suffer for it in the eyes of the jury.

The jury was told several times that the government only wanted to introduce the evidence to show another side of Hazelwood's character.

Wednesday marked the first day of testimony in a month.

Read more from WBIR's website.



PREVIOUS STORY: CHATTANOOGA, Tenn. (WBIR) After a one-month hiatus, the criminal trial of four former Pilot Flying J employees, including the ex-president, resumes Wednesday in Chattanooga.

Federal prosecutors are still calling witnesses and introducing evidence. It's not clear when they plan to wrap up, but they've only called a handful of the 14 former Pilot employees who have pleaded guilty and agreed to cooperate with the prosecution.

Jurors, picked from the Chattanooga area, have yet to work a full, five-day week. The trial began the week of Nov. 5.

U.S. District Judge Curtis Collier announced last summer he planned to hold court Mondays through Thursdays and give the jury Fridays off.

But this week the schedule calls for the trial to be held Wednesday through Friday.

Next week, the schedule calls for the jury to hear testimony Wednesday and Thursday. Monday is a federal holiday to honor the Rev. Martin Luther King Jr.

Former president Mark Hazelwood, Scott Wombold, Karen Mann and Heather Jones are accused of defrauding some trucking company customers of promised rebates.

The government's case has focused on two key areas so far: testimony from ex-employees who have pleaded guilty and secret recordings made by an employee of conversation with Pilot execs.

Among those who have testified is former sales exec Brian Mosher, who spent several days on the stand. Yet to be called is John "Stick" Freeman, a former Pilot vice president who was considered a leader in the scheme to rip off some trucking customers.

According to the government, sales staff schemed to short some customers of promised rebates included in a plan dubbed "cost-plus" or "manual."

Some Pilot execs boasted that customers didn't understand the process, didn't know what they really were entitled to and were just happy to be told they were getting a discount competitive to what was being offered by other fuel sellers.

"I'm sending cost-plus pricing to a guy that has absolutely no idea what cost-plus pricing is," a Pilot exec told staffers in one secretly recorded meeting that the government has. "He's heard it, he doesn't have a clue what it means to him…He doesn't know what it means and he's not going to take the time to know what it means because frankly he's lazy and he doesn't care. But he's heard the buzzword long enough to know this is valuable and 'I should have cost-plus pricing.'"

Prosecutors allege the company made tens of millions of dollars in the scheme. Pilot has paid a $92 million penalty and also paid firms more than $80 million to settle lawsuits.

A former Pilot employee, Vincent Greco, secretly recorded Pilot meetings at which sales personnel talked about duping some customers out of their rebates. The recordings were made months before an April 2013 federal raid on Pilot Flying J's Bearden headquarters.

Personnel also warned salesmen to be careful about what they were doing. If they got caught, they risked angering a customer, the recordings showed.

"Don't ever be foolish -- and be extremely cautious -- when you're doing something of this nature," an executive warned Pilot Flying J employees at a secretly recorded meeting. "But at the same time you've got to know your customers to be able to do this.”

Read more from WBIR's website



PREVIOUS STORY: CHATTANOOGA, Tenn. (AP) - A federal judge is setting a month-long break in the fraud trial of former executives and sales representatives at the truck stop chain controlled by the family of Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam.

The Knoxville News Sentinel reports U.S. District Judge Curtis Collier announced that after Thursday's proceedings, the trial will be put on hold until Jan. 8.

Jimmy Haslam, the CEO of Pilot Flying J, has not been charged with any wrongdoing and has said he had no prior knowledge of the fraud scheme before federal agents raided the company's headquarters in 2013.

Fourteen members of the Pilot sales department have pleaded guilty, and the company has paid an $85 million settlement to scammed customers and a $92 million penalty to the government.

Information from: Knoxville News Sentinel, http://www.knoxnews.com

Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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