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Man Pleads Guilty To Tax Fraud In Kickback Scheme

Reported by: Send eMail Jeff Morris
Reported: Jul. 9, 2014 4:10 PM EDT
Updated: Jul. 9, 2014 4:16 PM EDT
MGN Online/Wiki Commons Photo
MGN Online/Wiki Commons Photo

Charleston , Kanawha County , West Virginia

A 52-year-old Logan County man faces up to three years in prison after admitting to filing false tax returns in connection with a kickback scheme that authorities said involved an Arch Coal official.

Gary Roeher of Holden entered a guilty plea Wednesday before U.S. District Judge Thomas Johnston, according to a news release from U.S. Attorney Booth Goodwin’s Office.

Roeher admitted that on his 2010 and 2011 federal tax returns, he illegally claimed business-expense deductions for kickbacks that he paid to an Arch Coal official at the company’s Mountain Laurel Mining Complex.

The U.S. Attorney’s Office said Roeher and the official receiving the kickbacks stole money from Arch through a dummy invoice scheme. In the scheme, Roeher would submit bills to Arch for non-existent supplies that Roeher had purportedly provided to the company. The Arch official on the other end of the scheme would then falsely certify that the supplies had been received, so that Arch’s accounting department would pay the false bills that Roeher had submitted.

After he got paid by Arch, Roeher would then pay the Arch official a kickback in exchange for his participation in the scheme, the U.S. Attorney’s Office said. It was these kickback payments that Roeher falsely claimed as legitimate business expenses on his 2010 and 2011 tax returns.

Between 2010 and 2011, Roeher paid the known person more than $35,000 in kickbacks. In accordance with his plea agreement, Roeher has agreed to forfeit that amount to the Internal Revenue Service.
Arch’s Mount Laurel Mining Complex is located in Sharples.

Roeher also admitted he deducted about $43,000 as a business expense for his company, CM Supply, when Roeher actually used those funds to install an in-ground swimming pool at his residence.

Roeher is scheduled to be sentenced at 2 p.m. Oct. 15 in Charleston.

Nine more guilty plea hearings are scheduled for other defendants associated with the Arch kickback scheme:

* Alvis Porter, scheduled for 9 a.m. Thursday.
* Gary Griffith, scheduled for 1:30 p.m. on July 14.
* Ronald Barnette, scheduled for 3 p.m. July 14.
* Scott Ellis, scheduled for 10 a.m. July 16.
* Scott Herndon, scheduled for 10:30 a.m. July 16.
* David Herndon, scheduled for 10:30 a.m. July 17.
* Chadwick Lusk, scheduled for 10:30 a.m. July 21.
* James Evans III scheduled for 10:30 a.m. Aug. 4.
* David Runyon, scheduled for 10 a.m. Aug. 7.

Wednesday’s charge stems from an investigation being conducted by the FBI, IRS Criminal Investigation, United States Postal Inspection Service, and the West Virginia State Police. Assistant United States Attorney Meredith George Thomas is in charge of the prosecution.



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