Attorney Says Pilot President "Wasn't Part Of The Scheme"

Tuesday, November 7, 2017

Houston attorney Anthony Drumheller told a federal jury in Chattanooga on Tuesday that former Pilot Flying J president Mark Hazelwood "wasn't part of the scheme" to defraud trucking companies.

The lawyers for three other defendants also argued that their clients should be acquitted at the close of a trial that may last a couple of months.

Attorney John Kelly said former Pilot vice president of national accounts Scott "Scooter" Wombold was also innocent, saying, "This is a case of guilt by association."

Lawyers for sales directors Heather Jones and Karen Mann also said they should be acquitted and not punished for the sins of others. A number of Pilot employees have already pleaded guilty and are awaiting sentencing by Judge Curtis Collier, who is overseeing the case.

Attorney Drumheller said there was not enough personal money involved in the fraud for Hazelwood to risk "what he had devoted so much and sacrificed so much to."

He said Hazelwood sent out a memo in January of 2008 instructing personnel to write memos following up on promised discounts and giving all details of what was promised.

The attorney said in the wake of a federal raid on company headquarters in Knoxville on April 15, 2013, that Hazelwood "helped save the company," staying on until May of 2014. He said he led in formulating "a new way of doing business" at Pilot.

Pilot, which former UT football star Jim Haslam started in 1958 with a single gas station, was the sixth largest private U.S. company in 2011. It grew to 750 travel centers, one attorney said, but it faced fierce competition for trucking company accounts from Love's Travel Stops and TravelCenters of America (TA), among others.

Attorney Drumheller denied that Hazelwood was guilty of witness tampering in calling his longtime executive assistant Sherry Black about trip reports.

Attorneys warned jurors they would hear "salty, horrible" language in emails confiscated by the government and in secret taped conversations.

They said two employees who worked with the government as whistleblowers were expecting a windfall from the case. One had already received tens of thousands of dollars from the government, it was stated.

Attorney Kelly said Wombold "had no intent to defraud." He said several of the outside sales people acted as "lone wolves." He said of the sales battles, "It's a tough business. Everyone is trying to get an edge."

He said Wombold "did not approve things he felt were unethical or 'were playing in the gray.' He didn't like it. He didn't encourage it. He didn't do it."

The attorney said Wombold joined the firm pumping gas at a service station, then rose through the ranks. 

As to charges that Wombold lied three times to agents on the day of the raid, he said it was a time of "chaos with agents storming into the office and people having to put their hands in the air." He said this was one of the few interviews that was not recorded, though audio equipment was available.

He called charges against Wombold "government over-reach."

The government's first witness, Janet Welch of Huntsville, Tn., told of "sales guy" Arnie Ralenkotter promising trucking firms one discount, then telling her to put into the billing system a lesser discount.

Prosecutors said this was often done for smaller, less sophisticated smaller trucking firms, who didn't pay close attention to how the discounts were working out.

Prosecutor John Lewen said it would have been "foolish" to try that on a large firm with elaborate software that closely analyzed such charges.

Ms. Welch said Ralenkotter was told by an Ohio firm that TA was offering them a better deal than Pilot. She said Ralenkotter said Pilot had been "making a bunch of money" on the firm under the previous less generous arrangement. She said Ralenkotter responded by telling a PI&I official that Pilot would give a CP2 discount. However, she said he told her to put in a CP4 (a lesser discount) instead.

The witness, who has pleaded guilty to mail fraud, said she told him, "Okay."







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