Brickstreet auditor charged with role in workers’ comp fraud

A field auditor for Brickstreet Insurance is accused of taking bribes in exchange for allowing four coal industry contracting companies to lie about how many people were on their payrolls.

By doing so, they paid much less than they should have for workers’ compensation insurance coverage.

On Tuesday, U.S. Attorney Booth Goodwin filed a two count information against Arville Sargent, 52, from Chapmanville in Logan County.  An information filing indicates the defendant is cooperating with investigators.

The allegation is that, between January 2006 and at least February 2011, Sargent allowed coal industry contractors with Aracoma Contracting, Christian Contracting, Newhall Contracting and T&W Services to falsify documents and drastically understate the number of people they employed.

Those fake numbers allowed the companies to save millions of dollars in insurance premiums that should have been paid to Brickstreet to cover their workers if they were injured on the job.

“Mine safety is unquestionably a priority of my office.  Today’s filings underscore my commitment to approach this important issue from every angle,” U.S. Attorney Goodwin said in a statement.

“Employers in the coal mining industry who cheat the workers’ compensation insurance system are really only cheating the hard working miners who risk injury to perform dangerous jobs to provide for their families.”

Goodwin says, as an insurance company auditor, Sargent was in a safeguard position.  However, it’s alleged Sargent, instead, took hundreds of thousands of dollars and other items, like an all terrain vehicle, for allowing the fraud.

If convicted of the charges filed against him, he could be sentenced to up to 25 years in prison and pay a $500,000 fine.

“This type of corruption has long plagued the coal industry in Southern West Virginia and must be stopped,” the U.S. Attorney said.

Officials with the coal companies are facing separate charges on top of the fraud charges tied to Brickstreet via Sargent.

According to U.S. Attorney Goodwin, Jerome Eddie Russell, 50, from Williamson and Frelin Workman, 58, from Belfry, Kentucky have admitted to paying many of their workers with Aracoma Contracting in cash to avoid payroll taxes.

Randy Workman, 36, from Belfrey, Kentucky is also facing similar charges.

Arthur White, 60, from Lenore is accused of using a shell company for part of the payroll at T&W Services to avoid taxes as well.

The FBI and IRS have been handling the investigations.