Judge ponders request to release racially charged recordings

Several media organizations including WBIR are seeking the release of some secretly recorded conversations that lawyers say are racially charged.

UPDATE: 7:30 PM Friday: A federal judge said Friday afternoon he's taking "under advisement" a request by WBIR, the News Sentinel and several other media organizations that he release secretly recorded and racially charged conversations involving some former Pilot Flying J executives.

Judge Curtis Collier's ruling came after about a 90-minute hearing in U.S. District Court in Chattanooga, where former Pilot president Mark Hazelwood, Scott Wombold, Heather Jones and Karen Mann are being tried on fraud charges.

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10News, the newspaper and several other TV stations and newspapers want a copy of the audio recordings submitted by government prosecutors to jurors this week in the trial. The government argues the recordings show a side of Hazelwood's character that's legally relevant.

Sealed motions regarding the recordings also are part of the media's request.

The recordings were made in October 2012 at a lake house in Rockford owned by a former Pilot vice president, John Freeman.

Snippets played this week show several people lobbing insults about the Cleveland Browns and Cuyahoga County, Ohio. Hazelwood can also be heard inquiring about playing a blatantly racist song from the early 1980s by musician David Allan Coe that frequently refers to the N word.

In December, lawyers and the judge debated presenting parts of the tapes to jurors. They warned the recordings could offend some.

The judge allowed the portions to be presented Wednesday.

WBIR and other media organizations are asking for the recordings just as WBIR asked for and received copies of other secretly recorded past conversations among some Pilot employees talking about ways to cheat some trucking customers.

The organizations argue the recordings are newsworthy and public.

Collier heard argument from First Amendment attorney Rick Hollow and arguments from defense attorneys in the trial.

The defense is adamant in opposing the release to the press of the recordings, arguing they could lead to death threats or violence, could end up getting back to the jury and could damage any future jury selection if this trial ends in a mistrial. They also say the conversations are prejudicial against their clients.

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Hollow argued it's in the public's interest to get the recordings as well as a transcript of the conversations that was provided to jurors this week during the trial. Hollow also told Collier the Constitution provides for the public disclosure of such information.

Neither Jones nor Mann were present when the recordings were made.

Pilot Flying J has called things said on the recordings "extremely offensive" and "deplorable."

Rusty Hardin, who represents Hazelwood, said he would not oppose releasing the information after the trial. But not right now, he said.

By taking the media's request under advisement, the judge gives himself the option of making a decision at his discretion.

PREVIOUS STORY: Hundreds of Pilot Flying J trucking customers were defrauded out of rebates they'd been promised over at least a five-year period, federal prosecutors allege.

But what's the exact number? That's not been released.

A Pilot fuel accounting expert may shed more light on the figure.

Darren Seay took the stand Thursday afternoon in U.S. District Court in Chattanooga as a government witness. He's testifying in the criminal fraud trial of four former Pilot employees, including the former president, Mark Hazelwood. Also charged are Scott Wombold, Karen Mann and Heather Jones.

All were involved in some way with diesel fuel sales to trucking customers. Testimony in the trial that started in early November has shown that many Pilot employees profited handsomely through diesel fuel sales from 2008-2012.

Graphic of organizational chart for Pilot Flying J, showing which top employees have been indicted or pleaded guilty in a rebate scheme. WBIR

Federal prosecutors allege some of that profit came from duping some trucking customers about fuel rebates on purchases. They'd be promised one rate but get another. Some alleged victims never even knew they were being shortchanged, according to testimony.

The exact number hasn't been explicitly released since the FBI and IRS raided Pilot headquarters in Bearden in April 2013.

Seay's appearance on the stand may offer more insight.

A Pilot veteran of more than 15 years, Seay has experience in fuel accounting and data analysis.

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After the raid, Seay told jurors on Thursday that Pilot set about trying to determine just how many of its customers were due refunds because of the rebate scam. It wanted to pay them back, Seay testified.

Only a fraction of Pilot's customers fell prey to what was called the manual rebate scam, the government alleges. But Pilot elected to check every account, Seay testified. That amounted to some 7,000, he said.

In July 2014, the Department of Justice announced that scheming Pilot sales members had caused about $56 million in losses to customers. There were "hundreds" of victims, the DOJ said.

Pilot Flying J has paid a $92 million penalty and more than $80 million in civil settlements to trucking firms.

The government has sought to show Pilot employees made a lot of money selling diesel fuel.

Wombold, for example, made more than $1 million one year, 2012, mostly in commission.

Hazelwood, testimony showed, received more than $77 million in compensation from 2008-2012, including almost $27 million in 2012.

This will be the first Friday that the jury has been called on to hear testimony since the trial started. They previously had only worked Mondays through Thursday - and sometimes not all of those days.

U.S. District Court Judge Curtis Collier said this week he wants to pick up the trial's pace. The court took a one-month break that covered Christmas and New Year's.

Collier asked a witness Thursday if necessary if she could come back in a month or six weeks. Some jurors glanced at each other and quietly smiled.