WILLIAMSON, W.Va. — A scheme which bilked the state and federal government and Brickstreet Insurance out of millions of dollars will send at least three people to prison and more could be coming.
Jerome Russell, 50, of Williamson, W.Va. and Frelin Workman, 58, of Belfry, Ky. will soon be sentenced for their role in a monetary structuring scheme uncovered by federal investigators. Russel and Workman were the principles of Aracoma Contracting. A third individual, Arville Sargent, 52, of Chapmanville, W.Va. will also face prison time for his role. Sargent is a former field auditor for Brickstreet.
According to U.S. Attorney Booth Goodwin Aracoma officials arranged for numerous transactions at the Bank of Mingo Williamson Branch in which they withdrew cash in amounts just under the limit which required federal reporting. The cash became the payroll for Aracoma employees and helped the company avoid Millions of dollars in taxes and withholdings.
“It should have triggered reporting requirements for the bank,” said U.S. Attorney for the Southern District of West Virginia Booth Goodwin. “That did not occur.”
So far, nobody connected to the bank has been named in the investigation and Goodwin isn’t saying much about whether the probe is looking into any bank employees who may have been complicit in the scheme.
“They were able to funnel millions of dollars in cash out of the bank and use that cash to pay under the table cash payments to employees to avoid taxes and Social Security,” Goodwin said. “As well as bribe an official with Brickstreet Mutual Insurance Company to keep their workers comp premiums low.”
A federal information named Sargent as the Brickstreet official who accepted the bribe. He faces 25 years in prison and a half million dollar fine.
The scheme would entail individuals showing up at a teller window and being presented with a cashier’s check. The check was endorsed and the individual handed precounted cash. Federal investigators said many times the checks exceeded Aracoma’s 10,000 dollar line of credit, but no currency transaction reports were filed by the bank as required by law.
“Our investigation is ongoing down there in Mingo County and I think facts will continue to emerge about this particular incident,” said Goodwin.