published Monday, May 19th, 2014

President of Pilot Flying J leaves; Knoxville company is owned by Haslams

Pilot Flying J's corporate offices are pictured in this file photo.
Pilot Flying J's corporate offices are pictured in this file photo.
Photo by The Knoxville News Sentinel /Chattanooga Times Free Press.

KNOXVILLE — The president of a Knoxville, Tennessee-based company owned by Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam is out amid an ongoing federal investigation into a scheme to defraud customers.

The Knoxville weekly newspaper Metro Pulse obtained an email sent from Pilot Flying J CEO Jimmy Haslam to staff on Monday announcing Mark Hazelwood's immediate departure. The email did not say why Hazelwood was leaving.

Pilot attorney Aubrey Harwell said it is company policy not to publicly discuss personnel matters.

Knoxville-based Pilot is the nation's largest diesel retailer, with annual revenues around $30 billion.

Hazelwood is the highest-ranking official to leave the company since it was raided by federal agents in April 2013.

In November, the company agreed to pay out nearly $85 million to settle claims with 5,500 trucking companies that were cheated out of promised rebates and discounts. Several companies have filed separate lawsuits against Pilot that are ongoing.

The federal investigation also continues, with 10 former employees pleading guilty in the scheme so far. Jimmy Haslam has denied any previous knowledge of the scheme or any personal wrongdoing. Gov. Bill Haslam has said he is not involved with operating Pilot Flying J, though he continues to hold an undisclosed ownership stake.

FBI special agent Robert H. Root said in an affidavit filed in federal court last year that the scheme was known by a variety of euphemisms including "manual rebates," in which sales team members would make downward adjustments to the amount of money due to what they deemed to be less-sophisticated trucking company customers.

Hazelwood appears several times in the transcripts of recorded conversations at the company, jokingly referring to the practices as "Manuel."

"We're gonna intro, going to introduce him to a guy by the name of Manuel," Hazelwood said in one 2012 meeting.

About a month before the agents raided Pilot headquarters last year, Hazelwood was recorded speaking to fellow sales executives about establishing what the FBI said was an internal two-tiered pricing structure that would include higher prices for customers found unable to notice the difference.

"Customer A, Customer B," Hazelwood said.

Hazelwood's attorney could not be reached for comment Monday.

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