CHARLESTON, W.Va. — Aracoma Contracting, a company based in Mingo County, could be forced to pay a fine of up to $500,000 and spend five years on probation for a structuring scheme that involved more than $2 million in accounts the company once held at the Bank of Mingo.
Jerome Russell, 50, of Williamson, an executive for Aracoma Contracting, which is an employee leasing company, was in U.S. District Court Wednesday to plead guilty to a federal charge on behalf of the company itself.
Federal prosecutors said the company was using structuring, with the help of an employee at the Bank of Mingo, to break down cash transactions to amounts of $10,000 or less to avoid the Internal Revenue Service’s reporting requirements between 2009 and 2012.
Russell and Frelin Workman, 58, of Belfry, Ky., have already plead guilty, as individuals, to a scheme to defraud BrickStreet Insurance, a workers’ compensation insurance provider, and were sentenced to prison time for it.
In the structuring scheme, investigators found the two broke down at least $2.2 million out of the Bank of Mingo themselves and with the help of a number of other people.
The cash withdrawals, which were prepared in advance, were later used to pay workers so the company could avoid the payment of employment taxes and fund bribes for a former BrickStreet auditor.
That auditor, Arville Sargent, 52, of Chapmanville, plead guilty to fraud and tax evasion in March for allowing Aracoma and other companies to falsify documents to understate how many people they employed.
Sentencing for Aracoma Contracting is scheduled for Jan. 15.