May 30--CHARLESTON -- United States Attorney Booth Goodwin Friday filed a variety of charges in U. S. District Court in Charleston arising out of a joint federal and state criminal investigation into cash kickbacks paid to Arch Coal, Inc. employees working at the Mountain Laurel Mining Complex near Sharples in Logan County.
The charges lay out a far reaching scheme orchestrated by Arch employees, including the former Mountain Laurel General Manager David E. Runyon, 45, of Delbarton, (Mingo County), to receive cash kickbacks from certain vendors in exchange for receiving work. According to the charges, vendors were required to pay hundreds of thousands of dollars over several years to ensure that vendors received and continued to receive work at Mountain Laurel.
"This kind of pay-to-play scheme hurts honest coal-industry vendors who refuse to pay bribes as a way to get customers," commented U.S. Attorney Booth Goodwin. "The corrupt way that these defendants did business should be a thing of the past. It's bad for the economy and, ultimately, bad for consumers."
According to the charges:
David E. Runyon, 45, of Delbarton, is charged with extorting certain vendors for cash kickbacks in exchange for ensuring that those complicit vendors continued to receive work from Mountain Laurel. As outlined below, Runyon and other Arch employees are charged with receiving kickbacks approaching $2 million over a five-year span from sometime in 2007 through sometime in 2012. Runyon faces up to 25 years' imprisonment and a fine of up to $500,000 if convicted.
Gary K. Griffith, 62, of Oceana, Wyoming County, was charged with making a materially false statement to federal and state law enforcement when interviewed in the Mountain Laurel kickback scheme investigation. According to the charge, he was the maintenance manager at Mountain Laurel, and received cash kickbacks in the amount of at least $250,000 on behalf of him and the mine GM David E. Runyon from a vendor who refurbished shuttle cars. When he was asked by federal agents about receiving kickbacks either personally or on behalf of Runyon, he denied it. Griffith faces up to 5 years' imprisonment and a fine of up to $250,000 if convicted.
Stephen B. Herndon, 37, of Holden, Logan County, the former Mountain Laurel warehouse manager and now owner of Tri-State Mine Service, Inc., is charged with "structuring" a cash withdrawal from a local bank. The term "structuring" is used to describe criminal conduct when an individual engages in cash transactions with a financial institution in increments of $10,000 or less for the purpose of avoiding the financial institution's currency transaction report ("CTR") filing requirement with the Department of Treasury. Herndon faces up to 5 years' imprisonment and a fine of up to $250,000 if convicted.
Scott E. Ellis, 44, of Holden, Logan County, Stephen B. Herndon's business partner in Tri-State, is also charged with structuring a cash withdrawal from a local bank account. According to the Information filed in Runyon's case, Tri-State, through Ellis and Herndon, paid nearly $425,000 over a five-year period to receive rebuild work from Mountain Laurel. Ellis faces up to 5 years' imprisonment and a fine of up to $250,000 if convicted.
Alvis R. Porter, 61, of Holden, Logan County, owner and operator of Quality Oil, Inc., which was doing business as Southern Construction of Logan, provided construction services at the Mountain Laurel Mining Complex. Porter was charged with failing to collect, account for, and pay over trust fund taxes of an employee. As part of Runyon's charge, Porter paid approximately $400,000 in kickbacks directly to Runyon. Porter faces up to 5 years' imprisonment and a fine of up to $250,000 if convicted.