CHARLESTON, W.Va. -- A southern West Virginia coal company contractor has been charged with conspiring to defraud the federal government.
Aracoma Contracting LLC of Williamson is accused of structuring cash withdrawals in increments of $10,000 or less from its accounts at the Bank of Mingo to evade federal reporting requirements. Federal law requires financial transactions of more than $10,000 to be reported to the Internal Revenue Service.
Aracoma was charged Wednesday in a federal information.
The information charged that Aracoma used the money generated by the withdrawals to pay employee wages in cash and to bribe Arville Sargent, 52, of Chapmanville, a former BrickStreet Mutual Insurance Company auditor who allowed the company to underreport its payroll.
U.S. Attorney Booth Goodwin's office says the scheme cheated BrickStreet out of insurance premiums it was owed. Prosecutors are seeking a $405,000 forfeiture from the Aracoma.
According to the information, Aracoma contacted employees at the bank's Williamson branch in advance of the withdrawals, told them the amount that would be withdrawn, and identified the individuals who would withdraw the cash. The individuals, who weren't identified, then went to the bank, endorsed cashier's checks and received the cash.
Sargent had pleaded guilty in March to charges of honest service mail fraud and tax evasion. He was also accused of taking bribes from three other coal company contractors in exchange for allowing them to underreport their payroll. Sargent is scheduled to be sentenced Aug. 28. He faces up to 25 years in prison and a $500,00 fine.
Two principals for Aracoma - Jerome Edward Russell, 50, of Williamson and Frelin R. Workman, 58, of Belfry, Ky., also pleaded guilty in March to charges stemming from the scheme. Both men are scheduled to be sentenced Aug. 22. They each face up to 25 years in prison and a $500,000 fine.
Aracoma and the other contractors provided labor on a contract basis to coal companies.