Coal Operators Charged with Conspiring to Hide More than $10 Million in Cash
Seventeen Individuals Have Pleaded Guilty, $3 Million Forfeited Thus Far
ABINGDON, VIRGINIA – United States Attorney Timothy J. Heaphy and Rick A. Raven, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office, announced that an indictment was returned by a federal grand jury sitting in Abingdon, Virginia, charging five individuals with various charges related to a scheme to illegally withdraw over $10 million in cash from financial institutions and to pay kickbacks to mine supply purchasers. The individuals charged in the current indictment are listed below:
|William "Bill" F. Adams, Jr.||Yukon, WV||52|
|David Cline||Panther, WV||53|
|Joshua David Cline||Mohawk, WV||27|
|Michael W. Dunlap||Sumerco, WV||62|
|John B. Ward||War, WV||40|
The indictment alleges that Adams, Ward, the Clines and others engaged in a “Check Cashing Scheme” that was designed to hide the withdrawal of cash from various coal and coal related companies by the companies’ operators (“coal operators”). J.D. “Dot” McReynolds provided cash and fraudulent invoices to the coal operators. In return, the coal operators paid J.D. “Dot” McReynolds a 10% fee, which they included in the check that they made payable to J.D. “Dot” McReynolds or one of his businesses. Many of the 10% transactions involved fraudulent invoices. More than $10 million in cash was distributed as part of the Check Cashing Scheme. To obtain the necessary funds to funnel cash as part of the Check Cashing Scheme, J.D. “Dot” McReynolds and his associates structured over $10 million in cash out of financial institutions in Virginia and West Virginia to evade currency transaction reporting requirements by making multiple withdrawals of $10,000.00 or less.
The indictment further alleges that as part of the conspiracy Michael W. Dunlap received kickbacks from J.D. “Dot” McReynolds and caused the ordering of mine supplies and equipment from J.D. “Dot” McReynolds, in part, via telephone calls made from West Virginia to Virginia. J.D. “Dot” McReynolds created invoices that were inflated to disguise the fact that J.D. “Dot” McReynolds was paying a kickback to Michael W. Dunlap.
Each of the defendants is charged with conspiring to violate federal law. In addition, Adams is charged with fifteen counts of causing the structuring of currency transactions to avoid reporting requirements; David Cline is charged with twenty-two counts of causing the structuring of currency transactions to avoid reporting requirements; Joshua Cline is charged with twenty-two counts of causing the structuring of currency transactions to avoid reporting requirements and one count of making false statements under oath; Dunlap is charged with fifty-seven counts of wire fraud and twenty-four counts of causing the transportation of $5,000.00 or more in proceeds of fraudulent activity; and Ward is charged with thirty-one counts of causing the structuring of currency transactions to avoid reporting requirements. The maximum statutory sentences for each count charged in the indictment are set forth below:
|Causing the Structuring of Currency Transactions
to Avoid Reporting Requirements
|Causing the Transportation of $5,000.00 or More
in Proceeds of Fraudulent Activity
|Making False Statements Under Oath||5||$250,000.00|
Each count of conspiracy and making false statements under oath carries a maximum statutory sentence of imprisonment for a term of five years and a fine of $250,000.00. Each count of causing the structuring of currency transactions to avoid reporting requirements carries a maximum statutory sentence of imprisonment for a term of ten years and a fine of $500,000.00. Each count of causing the transportation of more than $5,000.00 in proceeds of fraudulent activity carries a maximum statutory sentence of imprisonment for a term of ten years and a fine of $250,000.00. Each count of wire fraud carries a maximum statutory sentence of imprisonment for a term of twenty years and a fine of $250,000.00. To date, sixteen defendants have pleaded guilty to felony charges of participating in the Check Cashing Scheme to hide income to avoid payment of federal taxes. They are awaiting sentencing. Those defendants, with the maximum statutory sentences they face, are listed below:
|Name||City||Age||Years of Imprisonment||Fine|
|Sandra M. Addair||War, WV||43||5||$ 250,000.00|
|Henry L. Barnett||Tazewell, VA||62||5||$ 250,000.00|
|David L. Cordill||Doran, VA||56||5||$ 250,000.00|
|Billy Ray Dotson||Meadowview, VA||58||5||$ 250,000.00|
|Darrell Felts||Ballard, WV||53||5||$ 250,000.00|
|Jeffrey K. Justus||Pounding Mill, VA||60||5||$ 250,000.00|
Charle E. "C.E." McReynolds
|Vallscreek, WV||42||5||$ 250,000.00|
|J.D. "Dot" McReynolds||Tazewell, VA||75||5||$ 250,000.00|
|Truong V. Nguyen||Tazewell, VA||55||5||$ 250,000.00|
|Hung Q. Nguyen||Iaeger, WV||38||5||$ 250,000.00|
|Melvin Parsley||Williamson, WV||46||5||$ 250,000.00|
|Angela D. Payne||War, WV||40||5||$ 250,000.00|
|Mike Poskas||North Tazewell, VA||61||5||$ 250,000.00|
|David M. Raber||Tazewell, VA||52||5||$ 250,000.00|
|Clinton Ramey||Abingdon, VA||55||5||$ 250,000.00|
|Allen H. Workman||Williamson, WV||55||5||$ 250,000.00|
In addition, as part of the ongoing investigation, the following individual pleaded guilty to felony tax evasion charges and is awaiting sentencing:
|Carl Blevins||Tazewell, VA||59||5||$ 250,000.00|
The indictment states that the United States seeks to forfeit the money involved in the crime. To date, the United States has collected over $3 million in forfeitures from the individuals who have already pleaded guilty.
Assistant United States Attorney Randy Ramseyer is prosecuting the case on behalf of the United States. The case is being investigated by the Bristol, Virginia, Office of the Internal Revenue Service – Criminal Investigation. The Charleston, West Virginia, offices of the United States Attorney’s Office and the Internal Revenue Service – Criminal Investigation are assisting in the prosecutions.
An indictment is only a charge and the defendants who have not pleaded guilty are presumed innocent. The burden at trial is on the government to prove the crimes beyond a reasonable doubt.