Logan County man sentenced for accepting kickbacks as an employee of a subsidiary of Arch Coal

Not a procurement fraud case, but use of theft of honest services by Southern District of West Virginia.

Department of Justice
U.S. Attorney’s Office

Southern District of West Virginia

FOR IMMEDIATE RELEASE

Wednesday, February 8, 2017

Charleston, W.Va. – A Logan County man was sentenced today to five years of probation for his role in a kickback scheme, announced United States Attorney Carol Casto. Chadwick Lusk, 35, of Davin, previously pleaded guilty to honest services mail fraud. He was also ordered to pay $230,000 in restitution to Arch Coal.

Lusk admitted that while he was employed as a purchasing agent at the Mountain Laurel Mining Complex, he defrauded a wholly-owned subsidiary of Arch Coal, the Mingo Logan Coal Company, of its right to honest services by receiving illegal cash kickbacks in a crib block kickback scheme. Crib blocks are used to provide roof support in an underground mine. Beginning around September 2009 and continuing until at least March 2014, Gary L. Roeher, who owned CM Supply, Co., paid Lusk a portion of the profits for the crib blocks that the Mingo Logan Coal Company purchased from CM Supply to use at Mountain Laurel. Roeher usually paid Lusk 7.5% of the crib block sales price. Roeher estimates he paid Lusk approximately $230,000 in cash kickbacks as part of the scheme.

The FBI, the United States Postal Inspection Service, and the West Virginia State Police conducted the investigation. Assistant United States Attorney Meredith George Thomas is in charge of the prosecution. United States District Judge Thomas E. Johnston imposed the sentence.

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