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You chose:

  1. Report to the manager of the sales department what the senior salesmen have asked you to do and how you were threatened when you refused to pad your expenses. Say that it has made you very feel uncomfortable as you don't wish to behave unethically, and the hostility of the sales personnel has now made it impossible for you to function as a member of the team.
This is not the best outcome.

The sales manager is almost certainly aware of the padding and considers that it is an acceptable practice to help keep the sales force satisfied and productive. He would consider you as a disturbing and negative influence and would probably suggest that you should immediately consider another job placement. He is not likely to take any significant action concerning your complaint.

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