Pilot fuel rebate scandal spurs unusual legal fight over racism

Trucks parked at a Pilot truck stock at night-time.

In April 2013, agents from the FBI and IRS raided the Knoxville headquarters of the largest truck stop chain in the United States: Pilot Flying J. It was part of a massive investigation into a fuel rebate scam. In all, 14 former Pilot employees pleaded guilty in what was known as “jacking the discount.”

Eight years later, the story is far from over as the 6th U.S. Circuit Court of Appeals has overturned the convictions of former Pilot President Mark Hazelwood and two of his staffers, who are still fighting to clear their names.

They allege they were victims of reverse racism as the trio and their attorneys prepare for a second trial in the fuel rebate scam that rocked the truck stop dynasty. FreightWaves’ true crime podcast, Long-Haul Crime Log, investigates the claims in its latest episode.

In court filings, Hazelwood, who is white, claims Senior U.S. District Judge Curtis L. Collier, who is Black, was biased because he allowed prosecutors to play alleged prejudicial recordings of Hazelwood spewing “profanities about African Americans and women” during his first trial.

Hazelwood is also seeking to have his trial moved from the U.S. District Court for the Eastern District of Tennessee to Arkansas, Missouri or North Carolina, stating that intense press coverage of his alleged role in the rebate scheme “has poisoned the jury pool to the point that a fair trial in East Tennessee is impossible.”

Heather Jones and Scott “Scooter” Jones are seeking a change of venue for the retrial as well.

The new trial will also focus more on the Haslam family, including former Gov. Bill Haslam and Cleveland Browns’ owner Jimmy Haslam III.

The Haslams have denied any involvement in the fuel rebate scam.

“We note that, for various reasons, the retrial will focus much more on members of the Haslam family than in the original trial,” according to court documents, citing social functions that were attended by both Collier and Gov. Haslam and asking the judge to “consider whether any relationship or connection between the court and Gov. Haslam merits recusal.”

The truck stop chain reached a $92 million agreement with the U.S. Department of Justice in July 2014 over the 15-month probe of its five-year fuel rebate scam that targeted customers it considered “too unsophisticated to catch on.” Pilot also agreed to pay an $85 million settlement to trucking companies with fuel rebate agreements.

Besides the 14 former Pilot employees who have pleaded guilty, two other former employees were granted immunity for cooperating with federal investigators, and one was found not guilty.