Bluefield Daily Telegraph, Bluefield, WV

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October 3, 2013

3 sentenced in W.Va. workers’ comp fraud scheme

CHARLESTON — A West Virginia man and two Kentucky residents have been sentenced for their roles in a workers compensation scheme.

Jerome Edward Russell of Williamson, Frelin R. Workman of Belfry, Ky. and his son, Randy Workman of Belfry, each pleaded guilty Wednesday to tax evasion and aiding in the scheme. U.S. District Judge John Copenhaver sentenced both Russell and Frelin Workman to 30 months in prison. Randy Workman received a 15-month sentence, the Charleston Gazette  reported Thursday.

Russell and Frelin Workman are principals in Aracoma Contracting LLC. Prosecutors say former BrickStreet Mutual Insurance Company auditor Arville Sargent of Chapmanville allowed Aracoma and three other companies controlled by Russell, the Workmans and Arthur White Jr. to underreport their payroll in exchange for cash and other items.

White was scheduled to be sentenced Thursday for his role in the scheme. Sargent pleaded guilty in March to mail fraud and tax evasion charges.

Russell, Frelin Workman and Randy Workman each had faced a maximum 25 years in prison and a $500,000 fine.

In a motion, Assistant U.S. Attorney Thomas C. Ryan asked Copenhaver to credit the men with providing “substantial assistance” to prosecutors. He said they had provided information leading prosecutors to other contracting firms involved in similar schemes.

The men also had led prosecutors to a “kickback scheme” involving a coal mine superintendent who had used contractors to perform work at his home, and then falsely billed the mine operator for the work, Ryan said.

He did not identify the mine superintendent, who he said plans to plead guilty.

There also was helpful information about an illegal gambling ring in the Mingo County-Pike County, Ky., area, he said.

“It’s been a long-term investigation with a lot of tentacles,” Ryan said. “I expect that investigation to take off, frankly, as soon as the agents and I have time to do so.”

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