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2 plead guilty in FBI 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 Wednesday 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.

Pilot Flying J spokeswoman Lauren Christ declined to comment on the guilty pleas. She also would not say whether the two who pleaded guilty Wednesday are still employed by the company.

Jimmy Haslam has denied wrongdoing and told an audience of trucking executives earlier this month that while he accepts responsibility, he knew nothing of any attempts to defraud them. He also said an internal review suggested that about 5 percent of the company’s customers that have a contract that includes rebates or discounts had a manual adjustment “to the benefit of our company and to the detriment of the trucking company.”

Haslam also has said he suspended several members of the sales team, but has declined to identify exactly who has been suspended.

A message left with the governor’s spokesman was not immediately returned.

At least eight trucking firms have sued Pilot over the rebate program. Some of them have retained former FBI Director Louis Freeh’s firm as part of their lawsuits.

Federal prosecutors did not immediately respond to a message seeking comment.


Associated Press writer Lucas L. Johnson III in Nashville and AP Sports Writer Tom Withers in Cleveland contributed to this report.