Two Pilot Flying J employees plead guilty in federal court to charges connected to allegations that the diesel giant scammed trucking companies out of rebates.
Cameras were rolling when two Pilot Flying J employees left a federal court after entering guilty pleas Wednesday.
This makes them the first charged in the investigation to admit guilt.
Arnold Ralenkotter pleaded guilty to one count of conspiracy to commit mail and wire fraud. Ralenkotter is the northeast regional sales manager for Pilot and worked in Kentucky.
“Mr. Ralenkotter expressed to me very early on his desire to do the honorable thing which he felt in part involved the guilty plea and cooperation with investigators,” said Edward Yarbrough, defense attorney for Ralenkotter.
Ralenkotter admits to tricking trucking companies out of rebates and ordering his subordinates to do the same.
In the initial federal affidavit for the investigation, authorities state that he bragged about cheating customers into thinking they were getting a good deal when really they were not getting a discount at all.
Ralenkotter could face up to 20 years in prison.
“It would be expected or hoped at least that his sentence would be more lenient than other members of the conspiracy because of his willingness to come forward early,” said Yarbrough.
Ashley Smith Judd, 27, also pleaded guilty to one count of conspiracy to commit an offense against the United States.
Prosecutors said Judd knowingly sent a reduced rebate check to Joe's Trucking in California and they say she purposely discussed rebates over the phone to limit an electronic trail of the fraudulent rebate amounts.
She could face up to 5 years in prison.
The Knoxville-based chain is run by CEO Jimmy Haslam, Tennessee Governor Bill Haslam's brother.
The Governor said he stands by his brother.
“I said all along that I have complete faith in my brother. He's done the right thing and I think the company is committed to finding what the issue is and fixing it,” Haslam stated.
Ralenkotter's attorney said it is likely the defendants who pleaded guilty Wednesday could end up testifying against other Pilot employees listed in that federal affidavit.
A status hearing is set for Ralenkotter and Judd for September 24.
- May 28, 2013: Another trucker sues Pilot Flying J
- May 15, 2013: Former FBI Director Louis Freeh joins Pilot investigation
- April 30, 2013: Former Pilot employee defends Jimmy Haslam
- April 29, 2013: Pilot lauds denial of witness tampering claim
- April 24, 2013: Haslam family begins rebuilding business relationships amidst investigation
- April 24, 2013: Haslams try to halt fallout from FBI raid on Pilot
- April 22, 2013: Pilot Flying J CEO Jimmy Haslam to make another statement
- April 18, 2013: FBI: Pilot worker says Haslam knew of rebate fraud
- April 16, 2013: Governor's brother defends family company after FBI raid