Two Pilot Flying J Execs Plead Guilty in Rebate Fraud

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Two Pilot Flying J Execs Plead Guilty in Rebate Fraud


KNOXVILLE, Tenn. -– Two Pilot Flying J employees pleaded guilty today in federal court to mail and wire fraud charges related to accusations that the company schemed to reduce rebates owed to trucking customers.

According to a report by, 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.

Both employees are free on bond and reportedly cooperating in the federal probe of the Knoxville, Tenn.-based chain of travel centers and travel plazas. Court records state that the goal of the scheme was to increase profits and commissions, while hurting competitors.

In his plea agreement, Ralenkotter, a 10-year-plus employee, admitted to participating in the rebate scheme from 2008 to this April when the FBI and Internal Revenue Service raided Pilot Flying's J headquarters. Ralenkotter signed a waiver of indictment stating that he and other individuals conspired to commit mail fraud and wire fraud, and that the rebate-reduction plan was taught to others in the company.

"The primary purpose of the conspiracy was to send fraudulently reduced rebate check amounts to some of Pilot's trucking company customers so that Pilot could fraudulently retain rebates that were owed to those customers and so that Pilot could create and maintain the false pretense that those customers were in fact receiving their agreed upon diesel price discount with Pilot," the indictment reads.

A monthly spreadsheet reportedly listed owed rebate amounts and recommended deceptively reduced amounts. "On one occasion between 2008 and 2013, defendant Ralenkotter told a subordinate that if he was not willing to deceptively reduce a customer's rebate, then defendant Ralenkotter would take the customer's account from him," the plea agreement states.

Judd, who was tasked to mail rebate checks and discuss issues and concerns with rebate customers, is accused of lying to customers who questioned the accuracy of their rebates, according to court records. Judd reportedly held discussions over the phone when possible in order to "minimize the potential that evidence of the Pilot employee conspiracy to reduce customer rebates could be easily retrieved in e-mail."

Reacting to its employees' guilty pleas, Pilot Flying J issued a statement via company spokesman Tom Ingram.

“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," Ingram stated. "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.”

Multiple class-action lawsuits have been filed since the April 15 federal raid. Pilot Flying J CEO Jimmy Haslam has repeatedly insisted that he was not aware of inconsistencies in the company's rebate program. Earlier this month, he apologized to the trucking industry and vowed to "make things right."

Pilot Flying J operates more than 650 retail locations and is the largest operator of travel centers and travel plazas in North America.