Half of the former Pilot Flying J employees set to stand trail on federal fraud charges later this year have now agreed to plead guilty in the company's multi-million dollar fuel rebate scam.
Four of the defendants have now signed plea agreements in the case, which were filed Monday in U.S. District Court for the Eastern District of Tennessee.
The four include John "Stick" Freeman, former vice president of sales; John Spiewak, former regional sales manager in Ohio; Vicki Borden, former director of wholesale and inside sales; and Katy Bibee, a former account representative.
Documents show Freeman pleaded guilty to conspiracy to commit mail fraud and wire fraud. He faces up to 20 years in prison and a $250,000 fine.
Pilot Flying J released the following statement about the plea agreements Monday:
“We are saddened by news of the pleas of four people who worked for Pilot Flying J acknowledging that they participated in defrauding some of our diesel fuel customers. After learning of such improper activities more than four years ago, we made whole every customer negatively affected; entered into a Criminal Enforcement Agreement with the government, which included a $92 million penalty; continued to cooperate with the investigation; and made policy, procedure and staff changes to make certain nothing like this happens again.
“It is Pilot Flying J’s commitment to be a great partner to trucking companies across North America, always focusing our undivided attention on the best interests of our customers, team members and business.”
The trial for four more former employees is set to begin Oct. 31 in Chattanooga. The trial was moved out of Knoxville due to heavy pre-trial publicity, and is expected to take four to six weeks.
The defendants are former Pilot President Mark Hazelwood; Scott "Scooter" Wombold, former vice president of national accounts; former account representative Heather Jones; and Karen Mann, former regional account representative.
Pilot CEO Jimmy Haslam is not under indictment and has said he knew nothing about the alleged scheme.
Haslam answered questions during a day-long deposition in connection to a number of lawsuits filed against the company in December.
The former employees are accused of cheating some trucking customers out of fuel rebates.
Federal agents raided Pilot's Knoxville headquarters and several other nearby offices in April 2013.
Two former employees have been granted immunity in the case for working with federal investigators. Ten other former employees have already pleaded guilty to various charges related to mail fraud and wire fraud, and are cooperating with the government. They have not yet been sentenced.
Those 10 employees are: Arnold “Arnie” Ralenkotter, Northeast regional sales director; Ashley Judd, an account representative who addressed rebate concerns among the customers; Holly Radford, a regional account representative; Jay Stinnett, who worked with senior sales executives; Kevin Clark, regional sales manager out of Kansas City, Mo.; and Scott Fenwich, western regional sales manager out of Salt Lake City; Janet Welch, former Pilot senior account manager; Christopher W. Andrews, a regional sales manager based in Dallas, and Lexie Holden, a sales representative in Knoxville.