CHARLESTON — A workers’ compensation auditor and four coal company contractors were charged Tuesday in a multimillion-dollar fraud scheme.

Arville Sargent, 52, of Chapmanville, was charged with mail fraud and tax evasion for allowing companies to underreport their payroll in exchange for hundreds of thousands of dollars in cash bribes and other items, including an all-terrain vehicle, according to a release from U.S. Attorney Booth Goodwin. Sargent was an auditor for BrickStreet Mutual Insurance Company, the state’s largest workers’ compensation insurance provider. Goodwin said the fraud cheated BrickStreet out of millions of dollars in insurance premiums it was owed.

The companies involved in the scheme are Aracoma Contracting LLC, Christian Contracting, Newhall Contracting and T&W Services. Each provided labor on a contract basis to coal companies in southern West Virginia.

Two principals for Aracoma — Jerome Eddie Russell, 50, of Williamson; and Frelin Workman, 58, of Belfry, Ky. —  admitted paying a significant number of their employees in cash as part of a tax evasion scheme to avoid the associated payroll taxes, Goodwin said. 

Randy Workman, 36, of Belfry, Ky., also used cash payments to evade payroll taxes, the prosecutor said. Arthur White Jr., 60, of Lenore, paid a portion of the payroll for T&W Services LLC through a shell company to avoid paying taxes.

Sargent, Russell, Frelin Workman and Randy Workman each face up to 25 years in prison and a $500,000 fine. 

White faces up to ten years in prison and a $500,000 fine.

It wasn’t immediately clear whether they had attorneys.

Goodwin said in a release that the charges, filed as an information to indicate the defendants’ cooperation, show that his office takes mine safety seriously.

“Employers in the coal mining industry who cheat the workers’ compensation insurance system are really only cheating the hard-working miners who risk injury to perform dangerous jobs to provide for their families,” he said.

He said failing to report employment exposed the coal miners to “devastating financial misfortune” if there had gotten injured on the job.

“These charges are even more disturbing because these crooked operators were able to compromise the one person entrusted to make sure the employees are properly accounted for:  the insurance company’s auditor,” he said. “This type of corruption has long plagued the coal industry in southern West Virginia and must be stopped.”