Former Pilot Flying J president gets prison time
Hazelwood also fined for role in market scheme
CHATTANOOGA, Tenn. – A federal judge on Wednesday ordered the former president of Pilot Flying J to serve more than 12 years in federal prison as the mastermind of a five-year fraud plot to grow the firm’s market share.
In addition to spending 150 months behind bars, Senior U.S. District Judge Curtis Collier ordered Mark Hazelwood to pay a $750,000 fine.
“The motive was hubris – his competitiveness ... his desire to capture more market share,” Collier said. “He violated the law on a constant and repeated basis for half a decade.”
Collier is allowing Hazelwood to remain free through November while the U.S. Bureau of Prisons determines in what facility he will be housed. He will remain under conditions of house arrest imposed after his conviction in February.
Hazelwood was convicted after a four-month trial for conspiracy to commit wire fraud, wire fraud and witness tampering. He was the highestranking member of Pilot Flying J convicted. Two subordinates were convicted of varying crimes, and 14 others pleaded guilty. Two were granted immunity. Pilot Flying J’s board admitted criminal responsibility.
Hazelwood was earning $26.9 million at the height of the fraud plot – double his pay when the scheme be- gan in earnest. Even after his indictment in 2016, Hazelwood continued to make money from the trucking industry. He heads a trucker recruitment firm and a trucking consulting firm and markets himself as an agent for truckers – all while under house arrest.
Trial testimony showed Hazelwood and his subordinates used a diesel fuel discount program Hazelwood created that was supposed to allow small trucking companies the same type of breaks on diesel fuel granted much larger firms.
But Hazelwood and his subordinates shaved pennies off those discounts – with the trucking firms unaware. Prosecutors Trey Hamilton and David Lewen argued the fraud plot not only netted money from the thievery itself but also, more importantly, lured trucking firms to do business with Pilot.
At the start of the fraud scheme in 2008, Pilot Flying J had 300 truck stops. By the end of the scheme in 2013, Pilot Flying J had 475 truck stops.
Hazelwood denied guilt in his remarks to Collier on Wednesday.
“I’m devastated I’m having to stand before you today,” he told the judge before sentencing. “I will be appealing my conviction. I do proclaim my innocence. We should have had policies and procedures to prevent this. We didn’t. I’m truly sorry.”