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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Tennessee

FOR IMMEDIATE RELEASE
Thursday, October 4, 2018

Pilot Flying J’s Former President Hazelwood Sentenced to 12.5 Years, Former Vice President Wombold Sentenced to 6 Years, And Former Customer Account Representative Heather Jones Sentenced to More Than 2.5 Years

CHATTANOOGA, Tenn. On September 26, 2018, the Honorable Curtis L. Collier sentenced Mark Hazelwood to serve 12.5 years in prison and imposed a $750,000 fine.  On October 4, 2018, Judge Collier sentenced codefendant Scott Wombold to serve six years in prison and imposed a $75,000 fine, and sentenced codefendant Heather Jones to more than 2.5 years in prison. 

Following a multi-month trial, on February 15, 2018, Hazelwood, former president of Pilot Flying J, was convicted of conspiracy to commit mail fraud and wire fraud as charged in count 1 of the indictment, wire fraud as charged in count 8 of the indictment, and witness tampering as charged in count 14 of the indictment.   Wombold, a former vice president of Pilot Flying J, was convicted in the same trial of wire fraud as charged in count 2 of the indictment.  Jones, a former customer account representative for Pilot Flying J, also was convicted in that trial of conspiracy to commit mail fraud and wire fraud as charged in count 1 of the indictment.

Evidence presented at trial proved a scheme to defraud certain Pilot Flying J trucking company customers through false and fraudulent representations and promises of diesel fuel discounts that were intended to induce victim customers to purchase diesel fuel from Pilot Flying J rather than a competitor.  The scheme resulted in victim customers being cheated out of their promised diesel fuel discounts.  The evidence at trial showed that the scheme’s goals were to increase Pilot’s market share of diesel fuel sales over its competitors, maximize Pilot’s profits, and maximize the scheme-participants’ potential for profit- and commission-based compensation from trucking companies targeted through the scheme to defraud.

Before trial, 14 other former Pilot Flying J executives and employees had already pleaded guilty to conspiracy charges related to the same scheme to defraud.  They are awaiting sentencing.  In July 2014, Pilot Flying J entered into a Criminal Enforcement Agreement with the United States in which the company agreed that some of its employees in its Direct Sales group engaged in fraudulent conduct in the payment of diesel fuel discounts for certain targeted Pilot customers.  Pilot Flying J agreed that the conduct of those employees resulted in $56 million in loss to affected customers.  In accordance with that agreement, Pilot Flying J agreed to pay full restitution to all victim customers in addition to paying a $92 million monetary penalty.  Additionally, according to the terms of the Criminal Enforcement Agreement, this federal investigation not only resulted in the payment of full restitution to the scheme’s victims, but also created protection for trucking companies going forward through greater transparency in their future fuel pricing arrangements with Pilot Flying J.

Law enforcement agencies participating in this joint investigation included the FBI and IRS- Criminal Investigation.  Assistant U.S. Attorneys F.M. (Trey) Hamilton III and David P. Lewen, Jr. represented the United States.

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Updated October 4, 2018