CHARLESTON, W.Va. -- A former workers' compensation insurance company auditor on Friday was sentenced to prison for taking hundreds of thousands of dollars in bribes in exchange for helping coal-company contractors lower their premiums.Arville Sargent, 52, of Chapmanville, was ordered to spend six years in jail after he pleaded guilty in a scheme that defrauded his employer, BrickStreet Insurance, out of millions in insurance premiums.U.S. District Judge John T. Copenhaver Jr. called Sargent's actions "an enormous fraud" that involved repeated bribes over a nearly decade-long period of time. Copenhaver called the amount of lost premiums -- $7.1 million -- "staggering" for BrickStreet and its predecessor, the state-run workers' compensation program.The judge said Sargent showed an "utter disregard" for his position as an auditor whose job it was to ensure that companies insured by BrickStreet properly reported payroll figures that were used to calculate premiums.
"This scheme is the ultimate breach of trust by this defendant," said Assistant U.S. Attorney Thomas Ryan, who prosecuted the case. "He was taking enormous bribe payments from the clients of BrickStreet who worked in the most dangerous industry."Sargent is the fifth man to be sentenced to jail in the case, a multimillion-dollar scheme aimed at lowering workers' compensation premiums for contract firms that provided workers to some of the state's largest coal producers.The other men prosecuted so far were coal contract company officials who also admitted their roles in plea agreements with U.S. Attorney Booth Goodwin.The scheme involved four mining contract firms -- Aracoma Contracting, Christian Contracting, T&W Services, and Newhall Contracting. All were "employee leasing" services that supplied miners for coal companies, including Alpha Natural Resources and Patriot Coal, under arrangements that are common in the coal industry.In the scheme, the contract firms paid their workers in cash, avoiding employment taxes and allowing them to hide their true payrolls from BrickStreet, dramatically lowering their workers' compensation premiums.Sargent admitted that he took bribes to cover up the activity when he performed audits for BrickStreet of the contract firms. In March, Sargent pleaded guilty to "honest services" mail fraud, which means he deprived BrickStreet of its intangible right to his honest services, and to tax evasion.By statute, Sargent faced a maximum sentence of 25 years in prison.Copenhaver sentenced him right in the middle of the 63- to 78-month range recommended by the federal advisory sentencing guidelines. But the judge also sided with prosecutors in first determining that Sargent had defrauded BrickStreet and the state workers' compensation program of just more than $7 million, a level above which the recommended sentencing range increased by 12 to 15 months.Sargent's attorney, Troy Giatras, had argued that prosecutors did not have concrete evidence to back up any exact figures for the amount of money Sargent defrauded BrickStreet of in reduced premiums for the coal contractors.Reach Ken Ward Jr. at firstname.lastname@example.org or 304-348-1702.