Owners structured millions out of bank, feds say
CHARLESTON, W.Va.-- The owners of Aracoma Contracting were charged in federal court Wednesday with structuring more than $2 million out of the Bank of Mingo.
The company is accused of breaking down cash transactions at the Bank of Mingo in amounts of $10,000 or less to avoid reporting requirements of the Internal Revenue Service, according to a news release from U.S. Attorney Booth Goodwin's office.
In March, company principals Jerome Edward Russell, 50, of Williamson, and Frelin R. Workman, 58, of Belfry, Ky., pleaded guilty to their involvement in a mail fraud scheme to defraud BrickStreet of insurance premiums and tax evasion.
Wednesday's charges allege Aracoma generated cash to bribe BrickStreet auditor Arville Sargent, 52, of Chapmanville, and pay employees cash wages generated by the alleged structuring.
The company was charged by information, which usually means a defendant is cooperating with an investigation.
Acting on behalf of Aracoma, Russell and Workman formed a longstanding relationship with the Bank of Mingo, and, particularly, one of its employees at the bank's Williamson branch, the release states.
An investigation determined that the cash structured out of the bank by Aracoma was used to pay the company's payroll in cash, therefore avoiding the payment of employment taxes and also to make bribe payments to a former BrickStreet field auditor, Arville Sargent.
Sargent pleaded guilty in March to honest services mail fraud and tax evasion. As a field auditor, Sargent purposely allowed four "employee leasing" companies, including Aracoma, to falsify documents drastically understating their actual payroll, the release states. In exchange for saving those policyholders millions of dollars in insurance premiums, Sargent accepted cash bribes, among other things, including a Yamaha Rhino all-terrain vehicle.
Russell and Workman each face up to 25 years in prison and a $500,000 fine when they are sentenced on Aug. 22. Sargent faces up to 25 years in prison and a $500,000 fine when he is sentenced Aug. 28.