Tape of Haslam, Hazel­wood be­ing ac­cused played at trial


Pi­lot Fly­ing J Chief Ex­ec­u­tive Of­fi­cer Jimmy Haslam not only knew one of his vice pres­i­dents was rip­ping off truck­ers but “loved it,” ju­rors heard a sub­or­di­nate claim Tues­day in a se­cret record­ing.

“He knew — ab­so­lutely,” for­mer Pi­lot Fly­ing J vice pres­i­dent of sales John “Stick” Free­man said of Haslam in a record­ing played for ju­rors in U.S. District Court in Chat­tanooga on Tues­day.

Haslam has de­nied any knowl­edge of the fraud scheme and is not charged. Af­ter the day’s tes­ti­mony, the com­pany reis­sued a state­ment say­ing: “As we have said from the out­set, Jimmy Haslam was not aware of any wrong­do­ing.”

A tran­script of the record­ing was re­leased by fed­eral prose­cu­tors shortly af­ter the com­pany was raided in April 2013. But this was the first time the record­ing had

been heard in pub­lic.

Free­man said in the record­ing — se­cretly made by sub­or­di­nate Vin­cent Greco at the be­hest of the FBI and IRS Crim­i­nal In­ves­ti­ga­tion Di­vi­sion — for­mer Pi­lot Fly­ing J Pres­i­dent Mark Hazel­wood also knew about the fraud.


Hazel­wood is stand­ing trial along with for­mer sub­or­di­nates Scott Wom­bold, Karen Mann and Heather Jones on charges in­clud­ing con­spir­acy to com­mit wire and mail fraud in a scheme to prom­ise truck­ing firms big dis­counts but short­ing them in­stead.

Free­man, along with 13 other for­mer ex­ec­u­tives and em­ploy­ees of the truck-stop gi­ant, has pleaded guilty and is ex­pected to tes­tify against Hazel­wood and the three oth­ers. Greco and a sec­ond for­mer Pi­lot Fly­ing J em­ployee were granted im­mu­nity.

As­sis­tant U.S. At­tor­ney Trey Hamil­ton on Tues­day played for ju­rors a record­ing Greco made in a ho­tel lobby in Fe­bru­ary 2013 — two months be­fore the Knoxville head­quar­ters of the na­tion’s largest diesel fuel re­tailer was raided.

Sales­man Chris An­drews tes­ti­fied he was learn­ing the ropes from Greco and Free­man when the record­ing was made. Nei­ther he nor Free­man knew Greco was wear­ing a wire. An­drews has pleaded guilty, too.


In the record­ing, Free­man ex­plained that “we’ve all had cases where we’ve got­ten busted,” mean­ing sit­u­a­tions in which a truck­ing com­pany dis­cov­ered they were be­ing shorted. Free­man told the pair he got caught by Western Ex­press in Nashville to the tune of $1 mil­lion. To soothe Western Ex­press, Pi­lot Fly­ing J bought a bro­ken-down air­plane from the firm for $1 mil­lion.

“What does Mark [Hazel­wood] and Jimmy [Haslam] say about — — like that?” Greco asked.

Jimmy Haslam, CEO of Pi­lot Fly­ing J, spoke with the me­dia in 2013 on the state of the com­pany’s re­sponse to the fed­eral in­ves­ti­ga­tion re­lated to man­ual re­bates is­sued to truck­ing com­pany cus­tomers.

Free­man said both Hazel­wood and Haslam knew. He told them, he said.

“— — ,” Free­man said. “I mean, I called Jimmy and told him I got busted at Western Ex­press … He knew — ab­so­lutely. I mean, [Haslam] knew all along that I was cost-plussin’ [code for the fraud scheme] this guy. He knew it all along. Loved it. We were mak­ing $450,000 a month on [Western Ex­press].”

Free­man boasted that al­though his de­ceit cost Pi­lot Fly­ing J $1 mil­lion, the truck stop gi­ant was still mak­ing nearly $6 mil­lion in its deal with Western Ex­press.

Free­man said on the record­ing that “it wasn’t a se­cret” at Pi­lot Fly­ing J that the firm’s man­ual re­bate sys­tem was be­ing used to de­fraud truck­ing com­pa­nies.


Pi­lot Fly­ing J’s board of di­rec­tors has con­fessed crim­i­nal re­spon­si­bil­ity and agreed to pay $92 mil­lion as pun­ish­ment. It has set­tled law­suits by truck­ing com­pa­nies to the tune of $85 mil­lion and is pay­ing for the de­fense of Hazel­wood, Wom­bold, Mann and Jones.

The trial is ex­pected to span at least six weeks. Tues­day was the sixth day of the trial, which is be­ing held in Chat­tanooga be­cause that’s where U.S. District Judge Cur­tis Col­lier holds court.

An­drews worked his way up the cor­po­rate lad­der at Fly­ing J be­fore that truck-stop chain merged with Pi­lot in 2010. Free­man hired An­drews.

An­drews told ju­rors Fly­ing J did not al­low its sales staff to ne­go­ti­ate dis­counts or de­cide whether those dis­counts would be hon­ored. In­stead, Fly­ing J’s cor­po­rate lead­ers fash­ioned dis­count of­fers based solely on how many gal­lons of diesel a truck­ing firm bought in a month.

“There was no ne­go­ti­a­tion,” An­drews said. “You could not de­vi­ate in any way.”


An­drews said he was schooled on the art of fraud soon af­ter join­ing Pi­lot Fly­ing J in mid-2010 by the sales­man whose ac­counts he was tak­ing com­mand of — Jay Stin­nett. Stin­nett, too, has pleaded guilty.

“He told me … the lo­gis­tics of how it worked,” An­drews tes­ti­fied.


For­mer Pi­lot Fly­ing J Pres­i­dent Mark Hazel­wood, left, leaves court af­ter be­ing ar­raigned in Fe­bru­ary on charges in­clud­ing con­spir­acy to com­mit wire fraud and mail fraud as well as wit­ness tam­per­ing.

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