Quantcast
Channel: RSS Business
Viewing all articles
Browse latest Browse all 14206

More charges may come in case involving Haslams

$
0
0

NASHVILLE: Sudden guilty pleas by a pair of mid-level executives show the investigation into the truck stop chain controlled by the family of Tennessee’s governor and the Cleveland Browns’ owner is picking up steam, with prosecutors likely setting their sights on higher-ups at the company, experts say.

The guilty pleas entered Wednesday were the first stemming from a two-year investigation of a rebate program at Pilot Flying J, the company controlled by the family of Gov. Bill Haslam and Browns owner Jimmy Haslam. The charges were filed weeks after a raid of the company’s Knoxville headquarters and other locations. The fruits of that raid, along with secret recordings and at least three key cooperating witnesses, point to more charges to come.

“The government is not going to offer what appears to be attractive plea bargains to people unless they fully intend to prosecute perhaps the company or perhaps higher-ups in the company,” said Nashville attorney David Raybin, who is not involved in the case. “These two people are not their ultimate targets. The targets are the company and the higher-ups at the company.”

Court documents don’t make clear exactly which executives — or how high-ranking they were — may have known about the alleged fraud. But the two who pleaded guilty appear to be key players in terms of knowledge and information and could prove valuable witnesses, Raybin said.

One former federal prosecutor said the government can offer powerful incentives to get employees in a corporate fraud case to implicate their co-workers.

“Usually people lower-level have information, and in my experience the government is going to want that information to see whether they can go up the chain,” said Ty Howard, who is a former assistant U.S. attorney in Nashville who now defends people accused of white-collar crimes. He is not involved in the Pilot Flying J case.

Employees implicating their superiors is not unheard. Earlier this year, a longtime subordinate implicated former Massey Energy CEO Don Blankenship in the case of a mine explosion that killed 29 miners in West Virginia. David C. Hughart, the former president of Massey’s White Buck Coal Co., said Blankenship ordered his employees to warn miners of surprise federal inspections.

The subordinate pleaded guilty to two conspiracy charges, but an attorney for Blankenship has denied his client did anything wrong. Blankenship has not been charged.

Court documents say sales employees were trained on how to defraud trucking companies of discounts and rebates owed to them by being loyal customers of Pilot Flying J.

Court papers outlining the plea deals say regional sales director Arnold Ralenkotter and regional accounts representative Ashley Smith Judd — the employees who pleaded guilty — were part of the conspiracy to boost profits and pad commissions.

Pilot Flying J, the country’s largest diesel retailer with annual revenues of $31 billion, was founded by the Haslams’ father. Forbes listed the truck stop chain as the sixth largest privately owned company in America.

Jimmy Haslam has denied any wrongdoing and has suspended several members of the sales team, but he has declined to identify anyone.


Viewing all articles
Browse latest Browse all 14206

Trending Articles