According to a statement from Goodwin’s office, the “pay-to-play” circle originated at the Mountain Laurel complex in Logan County and resulted from a joint federal and state criminal investigation into what he called a “far-reaching scheme orchestrated by Arch employees.”
At the center of the scheme was former Mountain Laurel General Manager David Runyon, who has been charged with receiving cash kickbacks from certain vendors in exchange for receiving work.
Runyon is charged with extorting certain vendors for cash kickbacks — sometimes to the tune of hundreds of thousands of dollars — in exchange for ensuring that those complicit vendors continued to receive work from Mountain Laurel.
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.
Also charged are Gary Griffith, with making a materially false statement to federal and state law enforcement when interviewed in the Mountain Laurel kickback scheme investigation; Stephen Herndon, the former Mountain Laurel warehouse manager and now owner of Tri-State Mine Service, with “structuring” a cash withdrawal from a local bank; and Scott Ellis, Herndon’s business partner in Tri-State, with structuring a cash withdrawal from a local bank account.
Alvis Porter, owner and operator of Quality Oil, doing business as Southern Construction of Logan, which provided construction services at the Mountain Laurel Mining Complex, has also been charged with failing to collect, account for, and pay over trust fund taxes of an employee. David Herndon has been charged with engaging in an unlawful monetary transaction of criminally derived property of a value greater than $10,000.
Ronald Barnette is accused of making a materially false statement to federal and state law enforcement investigating the Mountain Laurel kickback scheme and Gary Roeher was charged with filing a false tax return for his company, CM Supply.
Additionally, Chadwick Lusk was charged with honest services mail fraud. Lusk, while the purchasing agent at Mountain Laurel, defrauded Arch Coal of its right to honest services by receiving illegal cash kickbacks in a crib block kickback scheme.
Finally, James Evans II, owner and operator of Baisden Recyling, which had a contract with Arch to recycle scrap metal from the complex, has been charged with conspiracy to commit honest services fraud.
None of the employees are still with Arch, Goodwin said.
“This kind of pay-to-play scheme hurts honest coal-industry vendors who refuse to pay bribes as a way to get customers,” Goodwin said.
“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.”
Arch officials previously reached out to Booth’s office for help investigating possible misconduct; despite speculation at the time on the nature of the probe, the producer did not disclose any details.
On May 31, the company said in a statement that the agency was quick to respond to the issue.
“While it was extremely disappointing to find that former employees had failed to live up to our trust in them, we are pleased and relieved to have this issue behind us,” the company said.
All of the charges stem from an investigation being conducted by the FBI, IRS Criminal Investigation, United States Postal Inspection Service, and the West Virginia State Police.