The first guilty pleas in the Pilot Flying J case have been entered.
In the U.S. District Court for the Eastern District of Tennessee, regional sales director Arnold Ralenkotter pleaded guilty to one count of conspiracy to commit mail and wire fraud in the fraud case that has engulfed the Haslam family business.
Regional accounts representative Ashley Smith Judd also pleaded guilty to conspiracy.
Pilot Flying J is a private company owned by the Haslam family of Knoxville. Gov. Bill Haslam served as the company’s president in the 1990s before becoming mayor of Knoxville in 2002. Pilot CEO Jimmy Haslam, Bill’s brother, is among those mentioned in a scheme that the government alleges enriched the company and sales staff by not providing promised fuel rebates to trucking fleets. Jimmy Haslam is also the owner of the Cleveland Browns professional football team.
In pleading guilty Ralenkotter and Judd become the first Pilot employees to admit to fraudulently obtaining money in a scheme that cost trucking companies rebate money. As part of a plea agreement reached by Ralenkotter with the government, he will not be found responsible for money illegally obtained that he did not personally authorize, that he did not employ sophisticated means in participating in the scheme, and that he is acknowledged as the first to admit guilt.
Further, he may receive a reduction in his eventual sentencing by cooperating with federal authorities investigating others charged in the scheme.
In a 120-page document  filed in federal court in April, the government alleged that members of the company's sales force preyed on smaller trucking companies by reducing the amount of rebates they were owed for buying certain amounts of fuel.
FBI Special Agent Robert H. Root alleged a "conspiracy and scheme to defraud executed by various Pilot employees to deceptively withhold diesel fuel price rebates and discounts from Pilot customers ... for the dual purposes of increasing the profitability of Pilot and increasing the diesel sales commissions of the Pilot employees participating in the fraud."
At least eight trucking firms have sued Pilot over the rebate program. FBI agents raided the company's headquarters April 15.
(The Associated Press contributed to this report)