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black hawk mining fraud watch
CHARLESTON - Several local men pleaded guilty to federal charges of orchestrating a multimillion-dollar fraud against the state's leading workers' compensation provider.
U.S. Attorney Booth Goodwin announced that Arville W. Sargent, 52, of Chapmanville; Jerome Eddie Russell, 50, of Williamson; Frelin Workman, 58, of Belfry, Ky.; Randy Workman, 36, of Belfry, Ky.; and Arthur J. White, Jr., 60, of Lenore; pleaded guilty this week, Tuesday, Wednesday and Thursday, to frauding BrickStreet Mutual Insurance Company.
Sargent, previously employed by Brickstreet, pleaded guilty to honest services mail fraud and tax evasion.
Sargent admitted that, from its inception in January 2006 until at least Feb. 1, 2011, he led 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 on behalf of BrickStreet for the intended purpose of confirming those policyholders were paying accurate workers' compensation insurance premiums.
Sargent further admitted that he purposely allowed four "employee leasing" companies, Aracoma Contracting, LCC., Christian Contracting, Newhall Contracting and T&W Services, LLC., all of whom provided labor on a contract basis to coal companies in southern West Virginia, to falsify documents drastically understating their actual payroll.
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