Barbourville Police said Mike Jones, 48, of Pineville, is accused of stealing from his former employer in excess of $125,000.
Investigators said people at Bingham Tire reported in early August that inventory losses had been discovered in recent months, causing the company to implement new policies to track deliveries and sales.
Police said the new policies uncovered a former salesman, Mike Jones, had been delivering merchandise to businesses that weren't paying for the merchandise or were paying substantially discounted prices.
Accounts personnel at Bingham Tire worked with investigators who said there was evidence that Jones had delivered merchandise to businesses that weren't billed for the deliveries while placing the cost on accounts of other unsuspecting businesses.
Police said when they interviewed Jones, he admitted to his actions, but was unable to specify what accounts he had used, what the total loss was for Bingham Tire or where any potential cash that exchanged hands had gone.
Police said Jones was arrested on a warrant and lodged in the Knox County Jail.
Police said the investigation was expected to continue for some time while exact losses are determined.
Police said investigators would continue to try to find and question other individuals and businesses suspected of being involved.