U.S. District Judge James M. Moody approved a $84.9 million settlement in the Pilot Flying J fuel rebate scandal in a Little Rock, Arkansas courtroom Monday.
KNOXVILLE, Tenn. - A third Pilot employee has pleaded guilty to a federal fraud charge.
Kevin Clark admitted to one count of mail fraud Tuesday in U.S. District Court in Knoxville.
Clark worked as regional sales manager for Knoxville-based Pilot from 2008 to 2011. According to federal documents filed in April, Clark worked remotely and lived in Lee's Summit, Mo., a suburb of Kansas City.
He admitted today that he approved checks shorting customers on fuel rebates.
Clark agreed to cooperate against others in the case and is to be sentenced at a future date.
In May, Ashley Judd and Arnold "Arnie" Ralenkotter entered guilty pleas.
Judd, who worked as a direct sales representative at Pilot, pleaded guilty to conspiracy to commit mail fraud by mailing rebate checks she knew undercut the actual amount owed by Pilot to customers.
Ralenkotter, a regional sales director, confessed to conspiracy to commit mail and wire fraud for inking his approval for those rebate checks and receiving monthly reports on actual rebates owed and proposed rip-offs, which he approved. Sometimes he slashed the rebates even further and, according to court records, once threatened an employee with losing an account and, therefore, sales commission, if the unnamed employee did not go along with the rebate rip-off scheme.
Federal agents descended on Pilot headquarters on Lonas Drive in April with search warrants in an ongoing probe of fuel rebate ripoffs.
Judd quickly began cooperating, documents show. She provided authorities on the scene with a rebate tally sheet she privately had been keeping.
Those spreadsheets allowed the FBI and the IRS Criminal Investigation Division to quickly build a case that such a scheme existed, identify some of the employee conspirators and start the move up the corporate chain — without having to wait months for the forensic examination of seized computers, the documents show.
Clark was supervised by Vincent Greco, a regional sales director who lives in Bedford, Texas, and also works remotely.
Greco appears to be a confidential informant, dubbed CHS-2, who agreed to record conversations with co-workers after he was confronted by the FBI last October.
The informant is identified in the affidavit as "a current Pilot regional director of sales" who worked out of a"remote office location in Bedford, Texas."
He also is identified as having supervised Cathy Giesick, a former Pilot regional sales manager named in the affidavit as providing information to the FBI.
Greco, in turn, was supervised by Vice President of Sales John Freeman, who worked at Pilot headquarters and also oversaw Ralenkotter and Kevin Hanscomb.
Hanscomb worked out of Nashville as director of sales for the company's east region, according to the affidavit submitted in support of the April headquarters search.
Agents executed a search warrant on Hanscomb's house in April along with the residences of Ralenkotter in Kentucky and Brian Mosher, director of sales for national accounts, in Iowa.
Judd and Ralenkotter are cooperating in the federal investigation.
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