CHARLESTON - A Mingo County resident and two others from the Pike County, Ky. side of the Tug River were sentenced on Wednesday in U.S. District Court for their roles in a workers’ compensation scheme.
Jerome Edward Russell of Williamson, along with Frelin R. Workman and his son, Randy Workman, both of Belfry, Ky., entered guilty pleas to tax evasion and aiding in the scheme to defraud the I.R.S. of money owed to them, while padding their own pockets.
U.S. District Judge John Copenhaver sentenced both Russell and the eldest of the Workman’s’ to 30 months in a federal prison. Randy Workman received a 15-month sentence for his role in the crime.
Russell and F. Workman were the owners and operators of Aracoma Contracting LLC. Federal prosecutors say that former BrickStreet Mutual Insurance Company auditor Arville Sargent, of Chapmanville, allowed Aracoma and three other companies controlled by the defendants and another partner, Arthur White Jr., to under-report their payroll in exchange for cash and other items.
White is scheduled to be sentenced for his role in the scheme. Sargent pleaded guilty in March of this year to mail fraud and tax evasion charges. Russell and the Workman’s had been facing a maximum sentence of 25 years in prison and a $500,000 fine prior to their hearing on Wednesday.
In a motion presented during the sentencing hearing, Assistant U.S. Attorney Thomas C. Ryan asked Judge Copenhaver to credit the men with providing “substantial assistance” to prosecutors. He said they had provided information leading the prosecution team to other contracting firms involved in similar schemes. The defendants were also said to have provided vital information that led prosecutors to a “kickback scheme” involving a coal mine superintendent who had used contractors to perform work at his home, and then falsely billed the mine operator for the work. Ryan did not identify the mine superintendent during the court proceedings, but said the individual plans to plead guilty to the accusations.
“These men were also helpful in providing information about an illegal gambling ring in the Mingo County/Pike County, Ky., area,” stated Ryan. “It’s been a long-term investigation with a lot of tentacles,” Ryan said. “I expect that investigation to take off, frankly, as soon as the agents and I have time to do so and further arrests will be forthcoming.”