UPDATED, 5:36 p.m., Eastern -- A regional sales director and an account representative for the truckstop chain Pilot Flying J have pleaded guilty to charges in federal court following a federal investigation into allegations the company cheated customers out of fuel rebates they were due.
Arnold Ralenkotter, Northeast regional sales director, entered a guilty plea on one count of mail fraud and one count of wire fraud today in Knoxville, Tenn., where the company is based, according to published reports. The waiver of indictment he signed reportedly says he conspired with others, including others at Pilot Flying J, to commit mail and wire fraud.
The Knoxville News Sentinel reports an account representative worked with Ralenkotter to produce reports for him that showed not only the actual amounts the company owed to trucking customers in the form of fuel rebates, but also showed smaller recommended amounts for the company to pay customers. Customes did not know they were not getting the full rebates owed.
Ralenkotter admitted he “caused and approved the sending of fraudulently reduced rebate checks and fraudulently determined invoice amounts by mail and commercial interstate carriers to certain targeted Pilot customers" and also trained other salespeople how to run the scheme.
His plea came along with that of Ashley Smith Judd, who reportedly worked at Pilot Flying J headquarters. She admitted to one count of conspiring to commit mail fraud and was involved in changing rebate amounts owed to customers.
Ralenkotter could receive up to 20 years in prison. His sentence could be less, because reports say he has agreed to cooperate with the FBI and may end up testifying in court. Judd could receive up to five years in prison.
Late Wednesday afternoon Pilot Flying J released a statement saying the pleas "do not come as a surprise given what we’ve been learning in our own internal investigations, but are nonetheless disappointing. We want to assure our customers that we are taking every step to correct any wrongdoing that has occurred and to make certain that it does not happen again.”
On April 15 agents from the FBI and IRS raided Pilot Flying J headquarters, following an investigation that showed company officials were involved in a scheme to cheat fleet customers out of money they were owed. The raid also included the private homes of some officials, including that of Ralenkotter, who has a home office.
CEO Jimmy Haslam, who has not been charged, has vehemently denied he knew anything about it and says the company believes it will clear its name. Several employees of Pilot Flying J have been placed on leave, and a number of lawsuits have been filed against the company by both fleets and drivers that are seeking class action status on behalf of anyone that was allegedly cheated by Pilot Flying J.
Update adds Pilot Flying J statement.