CHARLESTON, W.Va. (WSAZ) – Six people have now been sentenced for their roles in a major false billing scheme involving sourcing agents at former Massey Legacy Mines -- now Alpha Natural Resources -- and certain companies that provided supplies, equipment, and services to Alpha,.
Thursday, Donald Bryan Steele, 43, of Barboursville, who is the former owner of M&S Hydraulics, a major Alpha supplier, was sentenced to 18 months in federal prison.
Steele previously pleaded guilty to wire fraud and aiding and abetting in connection with the fraud scheme.
Federal prosecutors say that when Steele was approached by law enforcement in February 2013, he admitted to providing cash and other items of value to former Massey sourcing agents Joey R. Phalin, Edward Ellis Mullins, and Nicholas R. Coleman, in exchange for bogus invoices for payment that M&S Hydraulics knowingly had not provided.
Between at least July 2007 through 2012, Steele falsely billed, through the sourcing agents, approximately $1.3 million for goods and services that were not provided.
The sourcing agents, who were generally responsible for ordering goods and services for mining operations from Alpha suppliers, participated in the illegal scheme to obtain goods for their own personal benefit. The sourcing agents hid numerous illegal transactions by creating false invoices.
Phalin, 36, of Crab Orchard, W.Va., was sentenced Thursday to five years probation, the first three months of which are to be served on home confinement.
Mullins, 41, of Peytona, W.Va. was sentenced Wednesday to five years probation, the first ten months of which are to be served on home confinement.
Coleman, 29, of Lester, W.Va. was sentenced Wednesday to five years probation for his role in the scheme.
Federal prosecutors say during the investigation, Steele identified other sourcing agents involved in the scheme.
Last week, former sourcing agent Ricky R. Smith, of 49, Glen Daniels, was sentenced to 1 ½ years in federal prison. James Rodger Long II, 34, of Beckley, also a sourcing agent, was sentenced to 1 ½ years in prison.
Harold Wayne Brown, II, a former Alpha underground maintenance chief, previously pleaded guilty to making a false statement to federal authorities regarding benefits he had received from the false billing scheme.
Brown, II, 41, of Madison, W.Va. is scheduled to be sentenced on Jan. 2.