BrickStreet Auditor, 4 Coal Contractors Plead Guilty to Workers’ Comp Fraud

A workers’ compensation auditor and four coal company contractors in West Virginia have pleaded guilty to federal charges in a multimillion-dollar fraud scheme.

Federal prosecutors said that Arville Sargent pleaded guilty to mail fraud and tax evasion. He was an auditor for BrickStreet Insurance, the state’s largest workers’ compensation insurance provider.

Prosecutors said Sargent admitted allowing labor contractors for southern West Virginia coal operators to under-report their payroll in exchange for hundreds of thousands of dollars in cash bribes and other items, including an all-terrain vehicle.

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

Four others in West Virginia and Kentucky pleaded guilty to charges stemming from paying workers in cash or through a shell company to evade either workers compensation premiums or payroll taxes.

Sargent, 52, of Chapmanville; Jerome E. Russell, 50, of Williamson; Frelin Workman, 58, of Belfry, Ky., and Randy Workman, 36, also of Belfry, each face up to 25 years in prison and a $500,000 fine.

Sargent’s sentencing was set for July 8 in U.S. District Court in Charleston. Russell and the Workmans will be sentenced on July 2.

Arthur J. White, Jr., 60, of Lenore, faces up to 10 years in prison and a $500,000 fine when he’s sentenced on July 11.