Today former Pilot Flying J president Mark Hazelwood was sentenced to 150 months in prison for a diesel fuel rebate scheme designed to dupe small business truckers.
In addition to the twelve and a half year sentence, Hazelwood was fined $750,000.
On February 15, 2018, a Tennessee jury reached a verdict of guilty on charges of conspiracy to commit wire and mail fraud for former company president Mark Hazelwood. He has been on house arrest since that day.
Senior U.S. District Judge Curtis Collier noted that Hazelwood’s motive did not appear to be greed but instead the desire for dominance over Pilot’s competitors: “The motive is hubris – his competitiveness, his desire to capture more market share.”
Knox News reports that at least four trucking companies that were duped by the Pilot Flying J rebate fuel scheme asked the judge for leniency for Hazelwood. The fraud victims have been paid restitution by Pilot Flying J.
Moments ago, Judge Curtis Collier said he didn’t believe, based on the evidence, that Mark Hazelwood was motivated by financial gain, but rather motivated by his competitiveness and desire for power. That could hint at a lesser sentence for the former PFJ President. @6news #WATE pic.twitter.com/RTPJn2I0bL
— Bridgette Bjorlo (@bridgettebjorlo) September 26, 2018
Seventeen other former Pilot Flying J employees have already pled guilty to fraud charges associated with the now-infamous diesel fuel rebate scam, which involved Pilot Flying J employees making false promises to deliver discounted fuel to truckers who they believed were too unsophisticated to notice that they were being conned. Following a 2013 raid of company headquarters, Pilot Flying J took responsibility for the fraud scheme and has already paid out $92 million in fines to the federal government along with $85 million in settlements.
While his salesmen were ripping off trucking companies, former Pilot Flying J president Mark Hazelwood was playing the role of “Mark the driver,” testimony shows. https://t.co/KX9n7zT2u2 pic.twitter.com/zv5xIEO0rb
— USA TODAY (@USATODAY) November 30, 2017
The U.S. Department of Justice describes the rebate scam as Pilot Flying J’s attempt to use truck drivers to gain a leg up on their competitors: “Evidence presented at trial proved a scheme to defraud certain Pilot Flying J trucking company customers through false and fraudulent representations and promises of diesel fuel discounts that were intended to induce victim customers to purchase diesel fuel from Pilot Flying J rather than a competitor. The scheme resulted in victim customers being cheated out of their promised diesel fuel discounts. The evidence at trial showed that the scheme’s goals were to increase Pilot’s market share of diesel fuel sales over its competitors, maximize Pilot’s profits, and maximize the scheme-participants’ potential for profit- and commission-based compensation from trucking companies targeted through the scheme to defraud.”
Jimmy Haslam, CEO of Pilot Flying J, has denied any knowledge of the fraud and has not been charged.