Logan County man sentenced for role in Arch Coal kickback scheme
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that Stephen B. Herndon, 37, of Holden, Logan County, West Virginia, was sentenced by United States District Judge Thomas E. Johnston to five years of federal probation for his role in a multi-million dollar scheme orchestrated at Arch Coal’s Mountain Laurel Mining Complex in Sharples, West Virginia.
In July 2014, Herndon pleaded guilty to structuring a transaction in order to evade federal reporting requirements. He also admitted that he and business partner Scott Ellis paid hundreds of thousands of dollars in kickbacks to David Runyon, Mountain Laurel general manager. The kickbacks were in exchange for business that Runyon directed to Tri-State Mine Service, Inc., a Mountain Laurel vendor in which Herndon was a part owner.
To generate the necessary cash for the kickbacks, Herndon and Ellis structured cash withdrawals from various personal and business accounts for $10,000 or less. This was to avoid triggering the bank’s obligation to file a currency transaction report with the Internal Revenue Service for sums greater than $10,000.
Between April 1, 2011, and September 30, 2013, Herndon and Eillis structured around $183,853. They estimate they used almost all those funds to pay cash kickbacks to Runyon, and in total paid around $237,000 during that period.
Herndon has agreed to forfeit $132,000 to the United States, representing a portion of the funds involved in, and traceable to, the structuring.
This sentence stems from an investigation being conducted by the Federal Bureau of Investigation, IRS Criminal Investigation, United States Postal Inspection Service and West Virginia State Police. Assistant United States Attorney Meredith George Thomas is in charge of the prosecutions.