Scott Ellis, Structuring, Kickback Scheme, West Virginia 2014

Defendant Sentenced for Role in Kickback Scheme

CHARLESTON, W.Va. – Scott Ellis, 45, of Holden, West Virginia, has been sentenced to three years of probation and a $3,000 fine for his role in a kickback scheme involving Arch Coal.

Ellis, who owned Tri-State Mine Service, Inc., a vendor at Mountain Laurel mining complex, pleaded guilty in July 2014 to structuring, a federal crime that involves the breaking down of cash banking transactions in amounts of $10,000 or less to avoid triggering a financial institution’s reporting requirements to the Internal Revenue Service (IRS).

Ellis admitted that he paid hundreds of thousands of dollars in kickbacks to the general manager of Arch Coal’s Mountain Laurel mining complex, located in Logan County. He also admitted to engaging in a bid-rigging scheme with his business partner, Stephen Herndon, where vendors had to pay cash kickbacks to David Runyon in exchange for a guaranteed winning bid on certain jobs.

Ellis structured cash withdrawals from various personal and business accounts in amounts of $10,000 or less to generate the necessary cash for the kickback payments. Between early 2009 and approximately March 2011, Ellis structured approximately $163,521.25 in cash transactions, with almost all of those funds being used to pay cash kickbacks to Runyon.

Ellis has agreed to forfeit $215,355.85 to the United States, representing a portion of the funds involved in and traceable to structuring. Today’s sentencing 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. Ellis and his business partner, Stephen Herndon, paid hundreds of thousands of dollars in kickbacks to the general manager of Arch Coal’s Mountain Laurel mining complex, located in Logan County.

The investigation into the kickback scheme is ongoing, and authorities are urging anyone with information to come forward. The case serves as a reminder of the importance of transparency and accountability in business dealings.

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