Former Pilot president under house arrest until June sentencing

A jury convicted Mark Hazelwood on Thursday of several counts including conspiracy to commit mail and wire fraud.

The former president of Pilot Flying J can remain free while he awaits sentencing on fraud and witness tampering charges, a U.S. magistrate judge ruled Friday.

Mark Hazelwood is a flight risk, but steps can be taken to ensure he goes to court for sentencing on June 27 and doesn’t flee Tennessee, U.S. Magistrate Judge Bruce Guyton said.

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Hazelwood will have to wear a monitoring device to track his movements. He also will be bound to his Knoxville home except for certain times when he can leave, Guyton said.

Steps also must be taken to ensure the boat he owns in Florida and the turbo-prop plane he has here in Knoxville are inoperable, the judge said.

He also must put up a property bond on his Knoxville home.

Hazelwood also owns homes in Nashville, Kiowa Island, S.C., and Park City, Utah. He also has a timeshare in Italy, testimony has shown.

Defense attorney Rusty Hardin said Friday after the hearing he was glad his client can remain free until sentencing.

"He's the most incredibly optimistic person I've ever met in my life," Hardin said. "He's doing a lot better than we are. He deeply believes he's not guilty."

Government prosecutors Trey Hamilton and David Lewen sought to take Hazelwood into custody now that a federal jury has convicted him of conspiracy to commit wire fraud, wire fraud and witness tampering.

Because he faces some 160 months to 260 months in prison, he has no incentive to stay here before sentencing, they said.

He also remains a wealthy man, they said, receiving $40 million when he left Pilot in 2014.

Hazelwood is due a final $6 million payment from that agreement in May, according to Hamilton.

Pilot responded Friday to word of the agreement.

"When Mr. Hazelwood was separated from the company, he received payments due pursuant to his pre-existing employment agreement," the statement reads.

Hardin argued Hazelwood is a devoted family man with children and grandchildren in Knoxville and Nashville. He also has about a half-dozen business interests in Nashville, testimony showed.

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Hardin called several friends, family members and business associates to testify Friday morning that Hazelwood has no interest or desire to run away.

The hearing lasted about two hours in U.S. District Court in Knoxville.

Hazelwood is to be sentenced along with two other defendants in U.S. District Court in Chattanooga in June.

A jury in Chattanooga found him guilty Thursday afternoon of conspiracy to commit wire fraud, witness tampering and wire fraud itself.

Hazelwood took part in a staff scam to bilk trucking customers of fuel rebates for at least five years.

He's been free more than two years since a grand jury indicted him and seven others.

Rusty Hardin speaks on behalf of Mark Hazelwood after Thursday's guilty verdicts for his client.

Hardin said Hazelwood looks forward to appealing the verdict and getting another trial. He thinks a future jury will vindicate him, the lawyer said.

More than 60 people attended the Friday hearing, filling the limited seating. Many appeared to be family or acquaintances of Hazelwood and his wife, Jo.

Meanwhile Pilot says it's committed to doing right by its trucking customers.

Related: Jury convicts 3 in Pilot fuel scheme

"Our focus has been on the customers. Nearly five years ago upon learning of the improper transactions, we made whole every customer negatively affected, entered into a Criminal Enforcement Agreement with the government, cooperated fully with the government’s investigation, and made policy, procedure and staff changes to make certain nothing like this ever happens again."

Co-defendants Scott Wombold and Heather Jones remain free as well. The government was not seeking to take them into custody.

Defense attorney Jonathan Cooper speaks with reporters after client Karen Mann, shown in the maroon top, was acquitted Thursday.

Wombold was convicted of one count of wire fraud. Jones as convicted of conspiracy to commit wire and mail fraud.

Wombold was acquitted of the conspiracy count and a count of lying to federal agents after an April 2013 raid of Pilot Flying J headquarters in Knoxville.

Jones was acquitted of four counts of wire fraud.

Karen Mann faced a lone count of taking part in the conspiracy. She was found not guilty and is now free of any charge.

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Fourteen other former Pilot Flying J employees have pleaded guilty and are awaiting sentencing.

Pilot has paid a $92 million penalty for the crimes and also paid out more than $80 million in civil settlements to clients.