You chose:

4. 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. To back up your position you admit your relationship with the owners of the company.

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. You have also gone over his head and confronted him with your hidden identity. He will consider it unethical on your part that you did not reveal this earlier. He is very unlikely to be cooperative and will likely register a strong objection with your grandparents. Possibly, he would even submit his resignation.