"Schemes like this create unfair obstacles for suppliers who want to do business honestly," Goodwin continued, "and they drive up prices for everyone. There's no place for that in the American economy."
Mullins was employed as the sourcing agent for the Shonk Powellton #1 Mine, operated by the Elk Run Coal Company, an Alpha subsidiary.
According to Goodwin, Mullins approached a tire and wheel supplier in November 2011 about supplying him and other Alpha employees with tires and wheels for their personal vehicles.
In exchange, Mullins agreed to allow the tire seller to submit false invoices for payment to Alpha reflecting that tires used in the mining operations had been delivered, Goodwin said.
For its participation, the tire seller was told to "pad" the false invoice, authorities said. The tire seller immediately provided this information to Alpha corporate security, who, in turn, contacted the FBI and West Virginia State Police, Goodwin's office said.
Over the course of the next six months, the criminal investigation revealed that not only Mullins, but also other sourcing agents, including Phalin and Coleman, who were employed by another Alpha subsidiary, Marfork Coal Company, were also engaged in the false billing scheme.
Through the sourcing agents' cooperation and other information, the agents identified an even more prominent supplier involved in the false-billing scheme. In February 2013, the FBI and the State Police confronted Steele, the owner of M&S Hydraulics, a major Alpha supplier. The significant evidence uncovered by the FBI and the State Police led Steele to agree to cooperate immediately in the investigation.Mullins, Phalin, Coleman and Steele each face up to 20 years in prison and a $250,000 fine.