Wed. 4:23pm: Two plead guilty in probe of Pilot Flying J
NASHVILLE, Tenn. (AP) – Two employees of the truck stop chain owned by the family of Tennessee Gov. Bill Haslam and Cleveland Browns owner Jimmy Haslam pleaded guilty today in a federal probe of the company’s business practices.
Regional sales director Arnold Ralenkotter pleaded guilty to one count of conspiracy to commit mail fraud in U.S. District Court in Knoxville, Tenn. Regional accounts representative Ashley Smith Judd also pleaded guilty to conspiracy.
They are the first to be charged in the investigation. Federal prosecutors allege members of Pilot’s sales team deliberately withheld rebates to boost Pilot profits and pad sales commissions.
Ralenkotter’s lawyer Ed Yarbrough said his client has agreed to cooperate with authorities. Ralenkotter and Judd were charged earlier this month in a document typically used by prosecutors when the targets of an investigation are working with authorities who may eventually charge others.
On April 15, the same day FBI agents raided the company’s headquarters, they also searched the homes of three regional sales directors, including Ralenkotter’s home in Hebron, Ky., according to an affidavit. That document indicated that the FBI and the IRS have been investigating the company for about two years, and that they had secret recordings of company officials discussing the rebate scheme.
The Knoxville-based chain is run by CEO Jimmy Haslam, the governor’s brother. Pilot Flying J, the country’s largest diesel retailer with annual revenues of $31 billion, was founded by their father.
Jimmy Haslam was at a news conference Wednesday at FirstEnergy Stadium in Cleveland to welcome back Hall of Famer Jim Brown as a “special adviser” to the team, but he did not take any questions related to the investigation.