The former longtime executive assistant to former Pilot Travel Centers president Mark Hazelwood testified Monday that he told her to say he did not review incriminating trip reports from sales reps involved in cheating trucking firms.
Sherry Blake told a federal jury in Chattanooga that Hazelwood called her on June 9, 2014, shortly after he had been forced to resign by Pilot for an alleged racist slur.
She said Hazelwood stated, "I just need you to know I didn't read the trip reports. Do you understand?"
Ms. Blake, a 22-year Pilot employee at the Knoxville headquarters, said, "I responded yes because I wanted the phone call to be over."
She said afterward "I felt I had been betrayed. I felt every generosity I had received from Mark in the past was being called upon."
Hazelwood is on trial along with Scott Wombold, Heather Jones and Karen Mann on mail and wire fraud charges. Hazelwood is also charged with witness tampering, and Wombold is also charged with lying to a federal agent.
Ms. Blake said of the Hazelwood call, "I didn't believe it. I was in complete shock."
Defense attorney Rusty Hardin said she sounded bitter about the incident, and she said possibly so.
Ms. Blake said while she was handling travel arrangements for Hazelwood as well as his calendar and monitoring his emails, he also asked her to pay some bills and do some scheduling for his side businesses.
She said this was done "on Pilot's time." She said he had started the Hazel Development firm as well as an airplane business. He later was part owner of a sports agency.
Ms. Blake said she was not paid a salary for the side work, but was rewarded by Hazelwood and his second wife, JoAnne. She said in 2014 that Hazaelwood gave her a $10,000 payment and Ms. Hazelwood added another $10,000.
The witness said Hazelwood was making a big salary at Pilot, but she said he also was a big spender. She said he was spending between $60,000 and $70,000 a month.
She said Hazelwood had houses in Knoxville, Nashville, Kiawah Island, S.C., and Park City, Utah.
Attorney Hardin said Hazelwood had worked himself up to president after starting as a dish washer at a Pilot center when he was 13. His mother was also working there. He said he eventually was awarded three and a half percent of the flourishing company.
Ms. Blake said she was at the Pilot headquarters at the time of the April 15, 2013, raid, but she said Hazelwood had just left to go to the airport. She said agents asked her where he was. She said she handed her cell phone to an agent, who got on the phone with Hazelwood and asked him to return. He was back at Pilot in about 20 minutes.
Ms. Blake said of the raid, "I was confused. I had no idea what was going on."
She said she had often heard talk about manual rebates, but had no idea that trucking firms were being cheated out of millions of dollars of promised rebates.
Knoxville FBI Agent Andrew Fisher told of the Pilot raid, which he said involved 54 FBI and IRS agents, including some from Kentucky.
The witness said the FBI learned some details of the layout of the building from watching a video that was filmed by Pilot on the first and second floors and showed various employees dancing. It did not cover the third floor, where the sales team was located, along with Hazelwood, Wombold and CEO Jimmy Haslam.
He said he and an IRS agent were assigned to interview Wombold, and he agreed to talk with them. He said at one point during the interview Wombold lowered his hands from where he had them on top of the desk. He said he went behind the desk to make sure Wombold was not going for a weapon.
He said there were no problems with employees during the raid, though agents knew that two of them had conceal-carry permits.
He said agents had weapons and wore body armor. He said they were in business suits, but also wore identifying vests.
The raid started at 1:48 p.m. and he encountered Wombold at 1:55 p.m. The interview started at 2:05 p.m. and lasted about an hour and 45 minutes.
He said at a point in the interview "when it became more direct" that "I began to come to the conclusion that he was not being candid with us."
Agent Fisher said Wombold told them he was not aware of any trucking customers being cheated on rebates.
He said Wombold also stated that cheating truckers had not been discussed at sales meetings, and that was something that would not come up at those meetings. It was testified earlier that Wombold was in the room when sales leader Brian Mosher gave a sales talk on how to cheat trucking companies.