A jury in Chattanooga is deliberating in a fraud trial involving executives from the largest privately held company in Tennessee: truck stop chain Pilot Flying J.
It's part of the ongoing legal quagmire that started with a federal raid five years ago but has never quite touched the Haslam family, which owns the business. Already, 14 former executives and staffers have pled guilty — and two others were granted immunity — for taking part in a rebate scam.
In this trial, former company president Mark Hazelwood, former vice president Scott Wombold and former account representatives Heather Jones and Karen Mann are accused of conspiracy to commit wire and mail fraud, among other charges.
"The basic allegation is that the direct sales team at Pilot Flying J would lure smaller trucking companies in, in return for promises of discounts or rebates on their fuel purchases," explains Jamie Satterfield, an investigative reporter with the Knoxville News Sentinel. "Pilot would say, 'Well, we'll shave six pennies off the gallon for you.' But [the companies] were actually being paid two cents or three cents. And of course they weren't told."
We talked with Satterfield, who's been covering the trial, about its implications for the Haslams.
At the very top of the company is the CEO Jimmy Haslam, brother of Tennessee Gov. Bill Haslam. Was there anything new revealed about his potential knowledge of the scheme?
"Jimmy Haslam has denied any knowledge of the scheme from the get-go. However, yes, there was lots of new information. We had at least three to four former sales executives and also a couple of subordinates who testified about Jimmy Haslam.
"Brian Mosher, for instance — he was one of the biggest fraudsters in this scheme — insisted that he told Jimmy Haslam what he was doing that he was cheating these truckers, that he actually showed him spreadsheets.
"The other thing that came out at the trial is that Jimmy's voice was actually captured on a secret recording. This recording was made at Pilot headquarters in November of 2012. There was a mandatory sales training meeting that day, and Brian Mosher taught how to carry out this fraud at one of those sessions. And during that session, which a mole was recording, Jimmy Haslam's voice was identified during the trial as saying something related to a fraud committed by another sales executive."
With this new information, is there another trial on the horizon where Jimmy Haslam would be pulled up to the stand?
"The feds have known all of this information since the raid. You know, they've interviewed all these people. They had those recordings. So although this information about Jimmy Haslam is new to the public, it's not new to the feds. Does it change the game? I don't think so.
"I will say that the statute of limitations on this particular fraud scheme runs out in April, so if the feds are going to move on Jimmy Haslam, they need to do between now and April."
Governor Bill Haslam is still involved in the business in the sense that he still gets money from Pilot Flying J. How has this really never touched him politically through this entire process?
"I think it's been clear from the beginning that by the time this fraud scheme was underway in 2008, Bill Haslam no longer had any function with Pilot at all. He was running the city of Knoxville as mayor.
"Granted, because he's making money off his family business like the rest of the family, he — just like Jimmy Haslam — profited in the sense that this scheme and the way it was carried out help to grow Pilot Flying J. So financially, there's a connection. But there's just never been any indication that Governor Haslam was involved with, aware of, or would have had cause to be aware of this scheme. Jimmy Haslam was running that company, not Bill Haslam."