CHARLESTON, W.Va. -- A Logan County field auditor for BrickStreet Mutual Insurance has been charged with orchestrating a multi-million dollar fraud on his employer by altering workers' compensation premiums and pocketing cash bribes.
Arville W. Sargent, 52, of Chapmanville was indicted by a federal grand jury, according to U.S. District Attorney Booth Goodwin. He was charged with mail fraud and tax evasion.
According to court documents, from January 2006 until at least February 2011, Sargent engaged in a scheme to defraud BrickStreet by allowing certain policyholders operating in the coal mining industry to drastically underreport their payroll during annual field audits he conducted.
Sargent allowed four leasing companies, Aracoma Contracting LLC, Christian Contracting, Newhall Contracting and T&W Services, LLC, to falsify documents drastically understating their actual payroll. Those companies provided labor on a contract basis to coal companies in Southern West Virginia.
In exchange for saving those policyholders millions of dollars in insurance premiums owed to BrickStreet, Sargent accepted hundreds of thousands of dollars in cash bribes and other gifts, including an all-terrain vehicle.
Principals of those companies who collaborated with Sargent have been also been charged. They are: Jerome Eddie Russell, 50, of Williamson; Frelin Workman, 58, of Belfrey, Kentucky; Randy Workman, 36, of Belfrey, Kentucky; and Arthur White Jr., 60, of Lenore.
Those employers paid a significant number of their employees in cash to avoid payroll taxes or paid a portion of the payroll through a shell company, avoiding taxes.
White faces 10 years in prison and the others face a possible 25 years in prison for the scheme.
Greg Burton, president of BrickStreet, said his company cooperated in the investigation. Sargent is no longer an employee there, he said.