Knoxville — Former Pilot Flying J president Mark Hazelwood won't have to report to prison at the end of this month as originally ordered by a federal judge.
Hazelwood is appealing his fraud conviction to the Sixth Circuit U.S. Court of Appeals in Cincinnati. He argues U.S. District Court Judge Curtis Collier improperly allowed prejudicial evidence to be used against him.
The appeals court ruled Tuesday that while the case is under appeal Hazelwood doesn't have to report to prison at month's end. It observed that Hazelwood has raised the question of whether his trial was flawed because prejudicial recordings of him making racist comments were presented to the jury.
"The recordings were offered by the government to prove that he participated in conduct that, if disclosed, would have jeopardized Pilot's success and reputation," the court wrote. "Hazelwood argues that this evidence was inadmissible.
"Having considered whether there is a reasonable possibility that this evidence might have contributed to his conviction, we conclude that his appeal raises a substantial question for purposes of release under the bail statute."
Hazelwood faces a 12.5-year term after a jury in Chattanooga decided he'd taken part in a multimillion-dollar sales department conspiracy to cheat some Pilot diesel fuel customers of promised rebates. The jury also convicted him of witness tampering in a monthslong case that ended with the verdict in February.
Collier had turned down Hazelwood's bid to delay reporting to a federal prison until early January. He was supposed to report to prison after Thanksgiving this month.
The appellate court's ruling makes that moot.
Hazelwood, who made millions as he climbed through the privately held Pilot ranks, already faces numerous conditions while on bond. He's wearing a monitoring device, has to check in with federal probation officials and can only undertake limited travel.
In the meantime, he's been involved in numerous start-up businesses related to the trucking industry.
Government prosecutors have repeatedly argued he's a flight risk, a suggestion Hazelwood's lawyers refute.
Hazelwood, Heather Jones and Scott Wombold, a former Pilot vice president, were all convicted at trial. Jones and Wombold face lesser prison sentences and must report Jan. 7.
Last week, Collier also sentenced another former vice president, John Freeman, and former Pilot sales executives Brian Mosher and Vicki Borden for taking part in the sales fraud scheme. The trio had pleaded guilty.
In all, 14 former Pilot employees pleaded guilty. Eleven still must be sentenced.
Federal authorities raided Pilot Flying J's Bearden headquarters in April 2013. Indictments eventually followed.
