On Wednesday, May 29, two Pilot employees pleaded guilty to charges including conspiracy to commit mail fraud and wire fraud for their involvement in the alleged rebate fraud scheme.
Ashley Judd, a regional account executive in Knoxville, and Arnold Ralenkotter, director of sales for the Northeast region for Pilot, who lived in Hebron, KY, entered guilty pleas in the U.S. District Court for the Eastern District of Tennessee in Knoxville.
In the affidavit unsealed in mid-April, informants cooperating with the FBI alleged that sales staff entered into rebate or discount programs with trucking companies for purchasing a certain volume of fuel each month, but then manually reduced the amounts the company were owed.
On March 7, Judd told the informant, who was secretly recording their conversation, that she “spoke with the regional sales managers that she supports over the phone each month about their customer deals and rebates, that she was reducing her customers’ rebate amounts, and (that) she did not send emails related to the rebate reductions, but kept a file in her desk drawer related to the rebate reductions.”
She also told the informant, who was cooperating with the FBI, that “if anyone ever came in the office that that file would be the first one that Judd would burn.”
According to the FBI affidavit, Ralenkotter was supervised by John Freeman, vice president of sales at Pilot.
In a recorded conversation with the FBI informant and Freeman, Ralenkotter explained the discount system he used to manually reduce rebate checks and reminded them to be “careful” not to raise customers’ suspicion by having months where customers received a large rebate check, then another month where they received a small rebate check.
“If the guy’s been getting $100,000, $100,000, $100,000, now you send him $180,000, and then the next month you send him $75,000…”
He is interrupted by Freeman, who added, “He thinks you’re (expletive) ’em.”
Ralenkotter then stated in the affidavit, “He thinks you’re (expletive) ’em. So you might as well be (expletive) ’em.”
Pilot Flying J issued the following statement late in the day Wednesday, May 29:
“The statements released by the federal court today 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.”
Since news of the alleged rebate fraud was made public in mid-April, eight lawsuits have been filed against the truck stop chain.
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