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Appeals court upholds tossing of trucking-fraud convictions

by The Associated Press | January 5, 2021 at 2:05 a.m.

KNOXVILLE, Tenn. -- A federal appeals court has rejected a bid by prosecutors to restore the tossed convictions for the former president of Pilot Flying J and two of his former employees related to a rebate scheme to cheat trucking companies out of millions of dollars.

The 6th U.S. Circuit Court of Appeals panel last week declined the request to reconsider the court's ruling that jurors should not have heard recordings of racist language by the former president, Mark Hazelwood, the Knoxville News Sentinel reported.

U.S. Attorney Doug Overbey declined to comment on the latest ruling, the newspaper said.

The panel's split decision in October vacated convictions for Hazelwood, who received the harshest prison sentence at 12½ years, and two others. The panel ordered the case to be sent back to a lower court for a new trial, ruling further that it would not be necessary to assign the case to a different judge.

At trial, the jury heard secret recordings of Hazelwood using racial slurs and profanely criticizing his board of directors and his boss' football team and fans. Hazelwood later apologized for his language.

The majority wrote that the racist recordings were wrongly admitted 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."

Hazelwood was convicted in 2018 of conspiracy, wire fraud and witness tampering. Former company Vice President Scott "Scooter" Wombold was convicted of wire fraud and sentenced to six years in prison, and former account representative Heather Jones was convicted of conspiracy to commit wire and mail fraud and sentenced to more than 2½ years.

Fourteen former Pilot Flying J employees pleaded guilty earlier.

Pilot Flying J is controlled by the family of Cleveland Browns owner Jimmy Haslam and former Tennessee Gov. Bill Haslam. The Haslams have not been charged with any wrongdoing. The former governor has not been involved with the company in recent years.

The company earlier agreed to pay an $85 million settlement to defrauded customers and a $92 million penalty to the government.


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