Southwest Virginia Coal Dealer Sentenced to Federal Prison for Fraud
GREENEVILLE, TN—Dale Edward Stanley, 54, of Clintwood, Virginia, was sentenced on June 11, 2014, by the Honorable J. Ronnie Greer, U.S. District Judge, to serve 12 months and one day in federal prison. A fine of $10,000 was also imposed. Following release from prison, Stanley will be subject to three years of supervised release under the supervision of a federal probation officer and must complete 200 hours of community service. Stanley will also be required to pay restitution in an amount to be determined by a later order of the court.
Stanley was indicted in November 2012 on 22 counts of wire fraud involving a scheme to defraud Eastman Chemical Company (Eastman), Kingsport, Tennessee, on spot market purchases of coal. He later pleaded guilty to one count of wire fraud. According to his plea agreement on file with the U.S. District Court, Stanley, the owner of Mountain Energy Resources Inc. in Norton, Virginia, contracted with Eastman to provide steam coal, which was to have a high BTU rate and low ash rate. In his plea agreement, Stanley admitted that he devised a scheme to defraud Eastman on the coal sales by circumventing the testing of the coal he sold to Eastman. His contract with Eastman stipulated that he would provide a certain quality of coal to Eastman and the coal would be tested to ensure it met the contract specifications. Stanley circumvented the testing process by bribing an employee of a coal testing service to submit unrepresentative samples of coal for analysis. As a result, Eastman believed they were receiving the quality of coal specified in the contract with Stanley, although he had actually directed his employees to load lower quality coal for the shipments to Eastman. Stanley caused to be sent via interstate wire communications false and fraudulent invoices for payment to Eastman and was paid for higher quality coal than he actually provided. Stanley engaged in this scheme to defraud Eastman from approximately February 2010 through February 2012.
This case is the result of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Neil Smith and Suzanne Kerney-Quillen represent the United States.