Raceway fraud case

MIDLAND The first man has pleaded guilty in a supposed fraud scheme involving the Penwell Knights Raceway.

Fred Welch Foster admitted to conspiracy to commit mail fraud Thursday in federal court. He and three others still face six counts of mail fraud.

U.S. Magistrate Judge David Counts granted an extension until next Thursday for a possible plea deal for Cody Dale Eckel, and Gary and Jerrod Gardenhire, both owners of the raceway. Eckel and the two Gardenhires still face one count each of conspiracy to commit mail fraud.

A jury trial is scheduled to begin Sept. 27.

The four men are accused of defrauding The Hose Connection Inc., where both Gardenhires worked, between 2007 and 2009 by selling equipment from the company and creating false invoices to get payment for the equipment sent to a shell company. Foster and Eckel are accused of receiving kickbacks to facilitate the fraud with the purchasing companies.

The four men are accused of making $2.6 million in fraudulent sales in this way, spending money on luxury items and improvements to the Penwell raceway.

The penalty for mail fraud is up to 20 years in federal prison and a fine of $250,000.