The Latest: Ex-execs of Haslam-owned chain charged

AP News
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Posted: Feb 09, 2016 7:54 PM

NASHVILLE, Tenn. (AP) — The Latest on the case against the former president of the truck stop chain Flying J (all times local):

6:30 p.m.

An indictment says 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.

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 charges came in an indictment 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.

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1:30 p.m.

The former president of the truck stop chain owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam pleaded not guilty on Tuesday to participating in a conspiracy to defraud customers.

Pilot Flying J President Mark Hazelwood left Pilot in 2014, a year after the FBI raided the company's Knoxville headquarters. A federal indictment unsealed on Tuesday accuses Hazelwood and seven other former employees of participating in a scheme to cheat customers out of promised rebates and discounts.

Pilot earlier 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 have previously pleaded guilty in the scheme.

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.

The indictment includes emails between the sales staff and executives recounting how they were able to dupe customers who were not sophisticated enough to detect the fraud.

Hazelwood faces an additional charge of witness tampering. Former vice president of national accounts Scott "Scooter" Wombold faces an additional charge of making false statements. Wombold also pleaded not guilty on Tuesday.

Pilot issued a statement saying it was "disappointed and saddened" by the news of the indictments.

"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 statement reads.