CHARLESTON, WV—United States Attorney Booth Goodwin announced today that Darrin McCormick, 50, of Williamson, West Virginia, pled guilty to lying to federal agents from the FBI and IRS. McCormick, the former Williamson branch manager of the Bank of Mingo, admitted that he lied during an interview in February 2013 about suspicious banking activities undertaken by the principals of Aracoma Contracting LLC, a contract labor company providing employees to local coal companies. Aracoma, owned by Jerome Edward Russell, 50, of Williamson, and Frelin R. Workman, 58, of Belfrey, Kentucky, routinely sent employees to the Bank of Mingo’s Williamson branch to simultaneously withdraw cash in increments of $10,000, commonly referred to as “structuring,” so as not to trigger mandatory reporting to the IRS. Russell and Workman were using the cash to pay a cash payroll as part of a scheme to avoid payroll taxes and also to pay bribes to Arville W. Sargent, 52, of Chapmanville, a premium auditor employed by BrickStreet Mutual Insurance Company (BrickStreet). In exchange for cash, Sargent intentionally underreported Aracoma’s payroll, which resulted in reducing Aracoma’s insurance premium to BrickStreet.

In February 2013, federal agents interviewed McCormick at his home in Williamson. He denied knowledge of Aracoma’s suspicious banking practice when specifically asked. At today’s hearing, McCormick admitted that he lied to the agents knowing it was important to a federal investigation.

“Lying to federal investigators is always a serious crime, but it’s particularly disappointing when the lie comes from someone who’s both an elected officeholder and a bank official,” said U.S. Attorney Goodwin. “Cash structuring provides the fuel for any number of financial crimes—including bribery, as we saw with the auditor from BrickStreet—which is why it’s so important that banks report structuring when it happens. The defendant understood that perfectly well. It’s a shame he chose to deceive federal agents rather than help them get to the truth.”

In October 2013, Sargent was sentenced to 72 months in prison and ordered to pay over $7 million in restitution to BrickStreet and the IRS for his role in the fraudulent scheme. Russell and Workman were sentenced to 30 months for their respective roles. The corporation, Ararcoma, was ordered to pay $405,000 in forfeiture to the United States as part of its sentence.

McCormick faces up to five years in prison and $250,000 fine. Sentencing is scheduled for August 28, 2014, at 2 p.m.

This investigation was conducted by the FBI and IRS Criminal Investigation, with assistance from the West Virginia State Police and the West Virginia Insurance Commission. Assistant United States Attorney Thomas Ryan is handling the prosecution.