5 in W.Va., Ky. charged in tax fraud scheme - WVVA TV Bluefield Beckley WV News, Weather and Sports

5 in W.Va., Ky. charged in tax fraud scheme

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CHARLESTON, W.Va. (AP) -- A workers' compensation auditor and four coal company contractors are facing federal charges in a multimillion-dollar fraud scheme.

U.S. Attorney Booth Goodwin on Tuesday charged 52-year-old Arville Sargent with mail fraud and tax evasion for allowing companies that provide labor contracting to coal operators in southern West Virginia to underreport their payroll in exchange for hundreds of thousands of dollars in cash bribes and other items, including an all-terrain vehicle. Sargent was an auditor for BrickStreet Mutual Insurance Company.

The companies involved in the scheme are Aracoma Contracting LLC, Christian Contracting, Newhall Contracting and T&W Services.

Four others in West Virginia and Kentucky were charged with tax evasion for paying workers in cash or through a shell company to avoid paying taxes.

It wasn't immediately clear whether they had attorneys.

The following is a statement from Brickstreet President and CEO Greg Burton:

"BrickStreet has been informed that it is one of the victims of a crime committed by a former employee working with a very small number of our policyholders, nearly all of which were owned or controlled by one family in Southern West Virginia.  BrickStreet has been fully cooperating with and assisting the authorities in this investigation since we were first informed of it in August 2012.  No BrickStreet policyholder lost money because of this crime.  We are thankful to U.S. Attorney Booth Goodwin and his office for the plea agreements that have been secured to date.  We will continue to cooperate and support the prosecution of any individuals or companies who may be found to be involved with this incident to the fullest extent of the law.  We are committed to fighting fraudulent activity that may impact our policyholders and we will take this same aggressive approach any time fraud is committed against BrickStreet."

-Greg Burton, President & CEO

BrickStreet Insurance

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