June 02–A magistrate judge is rejecting the portrait drawn by former Pilot Flying J executives of federal agents as storm troopers who descended on the Knoxville headquarters of the nation’s largest diesel fuel retailer and scared them into talking.
“The court finds that nothing about the ongoing execution of the search warrant transformed the familiar office location into an environment that a reasonable person would deem to be hostile,” U.S. Magistrate Judge Bruce Guyton wrote.
Attorneys for former Pilot Flying J vice president of direct sales Scott Wombold and direct sales staffer Heather Jones wanted Guyton to keep jurors from hearing anything they said to agents with the FBI and IRS Criminal Investigation Division in a dramatic daytime raid on Tax Day 2013 of the truck stop giant’s headquarters.
Wombold, Jones and former Pilot J President Mark Hazelwood, and a slew of direct sales managers and staffers have been accused of a plot to shortchange trucking companies on millions of dollars in promised diesel fuel rebates in a scheme dating back as early as 2008. Pilot CEO Jimmy Haslam, owner of the Cleveland Browns football team and brother to Tennessee Gov. Bill Haslam, denies involvement and has not been charged.
Attorneys for Wombold and Jones painted a portrait of armed agents storming inside the building in raid gear, yelling at employees to show their hands without explanation and so frightening to Wombold and Jones the pair talked to agents against their will.
Federal prosecutors Trey Hamilton and David Lewen can’t use anything the pair said against them at trial if the agents forced them into talking. What the pair said has not been revealed, so it’s not clear if it was incriminating. The agents outright accused Wombold of defrauding trucking companies, and he is now charged with lying to them. His attorneys’ motion said he denied involvement. Jones, too, was accused by the agents.
The agents admittedly did not formally advise Wombold and Jones of their full constitutional rights, including the right not to talk to law enforcement. But testimony showed they didn’t order the pair to say anything and instead told them they could keep quiet if they wanted. Both agreed to talk. The agents let Wombold call Hazelwood during their interview with Wombold in his office while the raid was still underway. Hazelwood wasn’t in the building at the time.
It was up to Guyton to decide if the raid itself and the agents’ behavior was so intimidating the pair thought they couldn’t refuse to talk.
Guyton labeled the defense attorneys’ narrative of the agents as storm troopers to be misleading at best.
“The Court finds that the agents made a show of authority when they came on the floor, asking the employees to stand, raise their hands, and step back from their computers,” Guyton wrote. “The agents then stationed themselves around the floor in order to monitor the actions of the employees. However, the court finds that the agents’ initial show of authority was short-lived, lasting for about fifteen minutes while the agents located all the employees, confirmed that no one was in a position to destroy evidence, and swept the floor for weapons.
“The court finds that the agents securing the cubicle area did not yell at the employees,” he ruled. “In fact, some of the employees in the back could not hear them. After about fifteen minutes, the employees were allowed to lower their hands and sit down, although they were still required to remain away from their computers.”
Guyton noted the agents were dressed in jackets, not riot gear, and, though armed, never brandished their weapons in front of Wombold or Jones.
The pair have the right to appeal the decision to U.S. District Judge Curtis L. Collier. It’s a legally cursory move. District judges rarely overturn the decisions of magistrate judges, who are tasked with handling all the legal battles that take place before a case is ready for trial. Collier will handle the trial, currently set for October.
The FBI has revealed in court records that the agency had a mole who made recordings, including a sales staff meeting at which employees were trained in how to trick unsophisticated trucking firms. Recordings showed the alleged scheme had been dubbed “Manuel” because some of those firms were owned by Hispanics and because the method employed a “manual” rebate process, according to the FBI search warrant affidavit.
Wombold, Jones and Hazelwood face charges of conspiracy to commit mail fraud and wire fraud in the alleged rebate scam. Hazelwood also faces charges of witness tampering, and Wombold faces additional charges of lying to federal agents.
Ten other former Pilot employees have pleaded guilty, and the company board of directors has admitted legal responsibility for the scheme in a $92 million criminal enforcement settlement. The company also settled a class-action lawsuit for $87 million.
(c)2017 the Knoxville News-Sentinel (Knoxville, Tenn.)
Visit the Knoxville News-Sentinel (Knoxville, Tenn.) at www.knoxnews.com
Distributed by Tribune Content Agency, LLC.