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8 former Pilot Flying J executives charged with conspiracy to defaud trucking companies
NASHVILLE, Tenn. — A former top executive of the truck stop chain owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam advised sales staff to "Say one thing, do another," when it came to dealing with customers, according to an indictment.
Former Vice President of Sales John "Stick" Freeman is one of eight Pilot Flying J former executives and sales employees charged with conspiracy to defraud the trucking companies who bought their fuel. The indictment was unsealed in federal court in Knoxville on Tuesday.
The indictment outlines a scheme that took place over a five-year period in which sales staff often promised customers one discount but gave them a different, lesser one. It offers several examples of employees and their bosses discussing the need to coordinate the lies they were telling customers so as not to get caught.
In one, an employee in an e-mail quotes Freeman as saying, "we just need to sing from the same hymn book."
Attorneys for Freeman did not immediately respond to a request for comment.
Other employee e-mails in the indictment discuss the need to determine which customers might be sophisticated enough to detect the fraud and prey only on the unsophisticated ones.
Other former executives charged in the conspiracy include former Pilot President Mark Hazelwood, who faces an additional charge of witness tampering, and former Vice President of National Accounts Scott "Scooter" Wombold, who faces an additional charge of making false statements.
Freeman, 52, Hazelwood, 57, Wombold, 56, and the other five former employees all pleaded not guilty on Tuesday, according to Sharry Dedman-Beard, spokeswoman for the U.S. Attorney's Office for the Eastern District of Tennessee.
The others indicated included account rep Katy Bibee, 35; account rep Heather Jones, 45; Vicki Borden, director of wholesale and inside sales, 62; Karen Mann, 57, regional account representative; and John Spiewak, 48, regional sales manager in Ohio.
Wombold's attorney, John Kelly, said in an e-mail, "Mr. Wombold disputes the charges against him and looks forward to having his day in court." Hazelwood's attorney did not respond to a request for comment.
Hazelwood was the first to appear Tuesday morning in U.S. District Court. He faces three counts of conspiracy to commit wire fraud and a witness tampering count.
Hazelwood was to be released and will be allowed to travel within East Tennessee. If he needs to travel nationally, he'll have to get clearance from a probation officer, authorities said in court.
Hazelwood, Wombold and Freeman left the company in May 2014. Wombold, Freeman and Borden reported directly to Hazelwood, the government alleges.
Pilot, which has paid out more than $170 million in fines and settlements since a 2013 federal raid, issued a statement Tuesday afternoon: "We're obviously disappointed and saddened by today's events but cannot comment further on any matters which are part of the ongoing investigation. We can say that since this unfortunate episode began, the company has put in place policies and procedures unparalleled in the industry to prevent anything like this from happening again.
"The company has cooperated with the investigation since its beginning and will continue to do so. The company repaid affected customers, accepted legal responsibility, and agreed to pay a monetary penalty. The trust and confidence of Pilot Flying J's customers continues to be of paramount importance to the company and their continued support and loyalty is very much appreciated."
Pilot paid a $92 million penalty to the government in an agreement with prosecutors in which the company accepted responsibility for the criminal actions of its employees. Ten former employees previously pleaded guilty in the scheme, which came to light after federal agents raided the company's Knoxville headquarters in April 2013.
Pilot paid out another $85 million to settle claims with 5,500 trucking companies in a class-action lawsuit.
Jimmy Haslam has denied any previous knowledge of the fraud or any personal wrongdoing. The governor has said he is not involved with operating Pilot Flying J.
Associated Press sources contributed to this article.
The Trucker staff can be reached to comment on this article at [email protected].