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On Wednesday, Regional Sales Director Arnold Ralenkotter pleaded guilty to one count of mail fraud, while Regional Accounts Representative Ashley Smith Judd pleaded guilty to conspiracy to commit mail fraud. They were the first guilty pleas from employees in connection with alleged fraud in Pilot Flying J's fuel rebate program.
However, according to The Associated Press, information obtained in an April 15 raid on the company's headquarters combined with secret recordings and at least three key cooperating witnesses, point to more charges to come.
"The government is not going to offer what appears to be attractive plea bargains to people unless they fully intend to prosecute perhaps the company or perhaps higher-ups in the company," said Nashville attorney David Raybin, who is not involved in the case. "These two people are not their ultimate targets. The targets are the company and the higher-ups at the company."
Court documents do not make clear exactly which executives may have known about the alleged fraud. But the two employees who pleaded guilty appear to be key players in terms of knowledge and information, and could prove valuable witnesses, Raybin said.
One former federal prosecutor told the AP the government can offer powerful incentives to get employees in a corporate fraud case to implicate their co-workers.
"Usually, people lower level have information and in my experience, the government is going to want that information to see whether they can go up the chain," said Ty Howard, a former assistant U.S. attorney in Nashville who now defends people accused of white-collar crimes. He is not involved in the Pilot Flying J case.
A 120-page FBI affidavit details a two-year investigation into the alleged fraud. According to the news agency, court documents said sales employees were trained on how to defraud trucking companies of discounts and rebates owed to them by being loyal customers of Pilot Flying J.
Pilot Flying J CEO Jimmy Haslam has denied any wrongdoing and any knowledge of wrongdoing. He has said the company is cooperating with federal officials, adding that it is taking several steps to address several issues that came to light as a result of the investigation.
In addition to the criminal proceedings, the company is facing multiple class-action lawsuits filed in several states.
Pilot Flying J is a family-owned business that operates more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America.