Two former Pilot Flying J sales employees pleaded guilty in federal court in Downtown Knoxville on Monday to criminal charges in connection with the investigation of rebate fraud by the fuel company.
The latest guilty pleas came from two people higher up Pilot's corporate ladder than the previous five employees to cut plea deals. They include a senior account manager as well as a former regional sales manager.
Janet Welch, a senior account manager for Pilot Flying J, pleaded guilty to a charge of conspiracy to commit fraud under criminal code 18USC371.
Welch left the courthouse just after 11:15 on Monday morning with her attorney, Robert Kurtz. Kurtz said his client no longer works for Pilot Flying J and wants to put the entire situation in the past.
"She is happy to have this part of the case resolved. And is looking forward to moving on with her life," said Kurtz. "What moving on means is spending time with her family, beginning a new career, and getting this part behind her."
Scott Fenwick, a regional sales manager for Pilot, also pleaded guilty on Monday morning to a count of mail fraud. Fenwick was mentioned in federal affidavits that were released following the FBI's raid on Pilot headquarters in April 2013.
The affidavits with transcripts of secret audio recordings made by a couple of confidential sources within the company specifically mention Fenwick. The affidavit states in December 2012, "Fenwick told CHS-2 (Confidential Human Source #2) that he was engaging in rebate fraud that was costing customers a total of $70,000 to $90,000 in lost rebates each month."
The prosecution filed a motion to seal the terms of both Fenwick's and Welch's of the plea agreements. The motion says the public filing of the agreements "could compromise the government's ongoing investigation."
The pleas by Fenwick and Welch make a total of seven Pilot employees who have pleaded guilty in connection with rebate fraud by the fuel company.
Former IRS special agent and federal prosecutor Jack Sammon told Gannett-owned television station WKYC in Cleveland it is hard to say how far up Pilot's corporate ladder the investigation will go. The biggest question remains whether it will reach C-E-O Jimmy Haslam, who maintains he knew nothing about the rebate scheme.
"Everybody is wondering is Jimmy Haslam going to be charged or not, which we don't know. We don't know how far away from him [Haslam] they are with a regional sales manager, but it appears this investigation is going as far as it can lead them. Once they get to the point nobody has any new information, that's the end of the investigation," said Sammon.
A Pilot Flying J spokesperson released the following statement on Monday afternoon:
"We are disappointed and saddened to learn that one of our employees and a former employee have admitted to knowingly and intentionally taken actions detrimental to the best interests of our customers. However, this news does not come as a surprise in light of the current investigation. We reiterate that the company, led by CEO Jimmy Haslam, is committed to do what is right, to pay back every customer affected by these actions, to implement policies and procedures to ensure this does not happen again, and to restore our customers' trust and confidence, which is still well-placed in Pilot Flying J."