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2 Pilot Flying J employees take pleas, now 7 guilty in fraud scheme

10:37 AM, Jul 29, 2013   |    comments
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  • Michael Scott Fenwick leaves U.S. District Court in Knoxville, Tenn.
  • Former Pilot employee Janet Welch leaves U.S. District Court in Knoxville, Tenn.
    
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KNOXVILLE, Tenn. -- Two Pilot Flying J employees entered guilty pleas Monday, adding to the five people who've already admitted to their roles in an alleged plot to cheat trucking company customers out of rebates.

Federal prosecutors are continuing their investigation into the family company of Browns Owner Jimmy Haslam. 

Janet Welch, a senior account manager in Knoxville, pleaded guilty to conspiracy to commit a federal criminal offense. 

Her attorney says she's parted ways with Pilot Flying J.

"What moving on means is that: spending time with her family, beginning a new career and putting this part behind her," said Robert Kurtz.

Welch admitted to conspiring with other employees to commit mail fraud, lowering the rebate amounts due to trucking companies.

Welch could face up to five years in prison. 

Michael Scott Fenwick, a western regional sales manager who is based in Salt Lake City, Utah, also appeared in U.S. District Court in Knoxville.

Fenwick entered a guilty plea to one count of mail fraud.

He's mentioned in the FBI affidavit that was released after an April raid at Pilot's headquarters; quoted telling an informant he was responsible for $70,000 to $90,000 a month in fraud.

Five other employees have entered guilty pleas to fraud and other charges, agreeing to cooperate with prosecutors in their case.

Fenwick's plea agreement says he worked closely with Ashley Judd in the scheme. 

Judd and Regional Sales Director Arnold Ralenkotter pleaded guilty in May. 

Holly Radford, Jay Stinnett and Kevin Clark entered pleas in June.

Fenwick and Clark both worked under Vincent Greco, a regional sales director who has been identified as a confidential informant for federal authorities.

Pilot Flying J faces nearly 20 civil lawsuits following the FBI's raid of the company headquarters in April. The company offered a settlement in a class action lawsuit earlier this month. 

A spokesperson for Pilot Flying J released this statement:

"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."

Who else was involved in the scheme is what federal prosecutors are working on now says retired Assistant US Attorney Jack Sammon.

"They're trying to figure out how high it goes," said Sammon. "Eventually it's going to stop. Once there's no more evidence to go beyond the next guy, then that's the end of the investigation."

Since the FBI first started this investigation in 2011, Sammon says the documentation is tied down. Now federal agents are likely searching for testimony to support the numbers on paper.

Most Clevelanders have only one name they're waiting to hear: Jimmy Haslam.

"If they're going to charge someone like a Jimmy Haslam, they are going to want to make sure that they have proof beyond a reasonable doubt," said Sammon. "That should hold for anybody they charge, but especially in a case like that."

"Mr. Haslam, as you know, from day one, has professed his innocence, and all of his actions to this point seem to be consistent with that. So they are going to have to have more than just a testimony from one of his employees," he said. "They are going to have to have some hardcore, strong evidence that would assure them that they're going to get a conviction."

WKYC-TV

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