A federal appeals court, in a 2-1 decision, has thrown out convictions in the long-running 2018 Pilot Travel Center case held before a jury in Chattanooga.
New trials were ordered for president Mark Hazelwood, vice president Scott "Scooter" Wombold and account administrator Heather Jones.
The court said Judge Curtis Collier should not have allowed the jury to hear a racist tape from a raucous Pilot party in which Hazelwood was a leading figure.
Hazelwood got 12 1/2 years in prison, but he has been under home confinement at his Knoxville home. He earlier alleged that Judge Collier was a "biased judge."
Wombold got six years and Ms. Jones 33 months. They began serving their sentences earlier.
The case involved what Judge Collier called an "unprecedented fraud" of trucking firms.
Senior Judge Richard F. Suhrheinrich and Judge Eric Murphy wrote, "In this wire fraud and mail fraud conspiracy case against employees of a multi-billion-dollar gas company, Pilot Flying J (Pilot), the district court allowed the government to play audio recordings in which one of the defendants, Pilot President Mark Hazelwood, is heard using deeply offensive racist and misogynistic language. The district court admitted the recordings on the theory that if the defendant was reckless enough to use language that could risk public outrage against the company, he was a “bad businessman,” and as a bad businessman, he was also reckless enough to commit fraud. This is vintage bad character evidence—and precisely the type of reasoning the Federal Rules of Evidence forbid. The use of the audio recordings in this case jumped the rails of those rules. First, none of the Rules of Evidence support the recordings’ admissibility. Second, and more importantly, even if somehow otherwise admissible, the recordings are a textbook violation of Rule 403, because the risk of unfair prejudice eviscerates any purported probative value. For these reasons, we reverse the convictions of all three defendants."
The judges also said, "The recordings were made undercover by Vince Greco, a member of Pilot’s direct sales team who agreed to cooperate with federal agents in the investigation that led to the charges in the case. On Oct. 25, 2012, Greco attended a management meeting of Pilot executives at the lake house of co-conspirator John Freeman, vice president of sales. During the meeting, some of the executives discussed the manual-rebate scheme. Freeman decided that Mosher, reputed for his aggressive manual rebates, would lead a session on that topic the next month during the all staff sales meeting. Hazelwood was not present for these discussions. Wombold was. In the evening hours, after the business meeting had ended, the colleagues watched a football game on television, drank alcohol, and spewed profanities about African Americans and women. This racist and chauvinist banter is captured on three recordings. Hazelwood was present by then and prominently featured in these conversations."
Judge Bernice Bouie Donald dissented. She said, "What matters here is that the evidence was relevant, as rebuttal evidence; properly admitted in substance and form, even if it is character evidence or risks findings based on propensity; and the probative value of the evidence is not substantially outweighed by the risk of unfair prejudice."