November 14, 2017
In the early days of the Pilot Flying J Fuel Rebate Fraud trial, a former sales director’s testimony and emails have given jurors a look at the fraud operation from the inside, according to reports in the Knoxville News Sentinel.
Arnie Ralenkotter, the former director of sales for the northeast region during the fraud scheme, gave testimony this week explaining his interactions with his sales staff and with company higher-ups. He is a witness in the trial of four former Pilot employees, Mark Hazelwood, former executive vice president and president of Pilot Flying J, Scott Wombold, former vice president of national accounts, and two former sales representatives, Karen Mann and Heather Jones.
Through spoken testimony and company emails from the time of the scandal, Ralenkotter described how he pressured a lower level salesman, Tim Prins, into cutting discounts given to certain small trucking companies. Ralenkotter admitted that he threatened to pull sales accounts from Prins if he didn’t comply after Prins expressed his reluctance to participate in the fraud. Prins was not charged for his role in the fuel rebate scam. Ralenkotter is one of the 14 Pilot sales employees who has previously admitted guilt.
In another instance with Prins, Ralenkotter sent an email to Pilot Flying J CEO Jimmy Haslam, relaying information from Prins on the Smith Transport trucking company. Smith Transport refused to make an exclusive deal for fuel with Pilot Flying J and in an email response, Haslam called the situation disappointing. Haslam has denied any knowledge of the fuel rebate scam and has not been charged in the case.
Smith Transport was later one of the companies that had its discount cut. Both Hazelwood and Mann were both included in emails about the cuts. The email evidence was submitted by Mann’s attorney to argue that Mann was following orders in her compliance with fraud.
Mann did earn a portion of the money earned from defrauding trucking companies of their rebates, however, her attorney argued that it was so minuscule, just $10 in one instance, that it was not a real incentive.