Repair shop president, Alpha sourcing agents charged with fraud - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Repair shop president, Alpha sourcing agents charged with wire fraud

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Three Alpha Natural Resources sourcing agents and the president of a Logan County repair and rebuild shop have been charged with wire fraud and aiding and abetting, court documents state.

Informations were filed March 25 against M&S Hydraulics Inc. President Donald Bryan Steele, 34, of Barboursville, and Alpha sourcing agents Nicholas J. Coleman, 29 of Lester, Edward Ellis Mullins, 41, of Peytona, and Joey R. Phalin, 36, of Crab Orchard.

According to a news release from U.S. Attorney Booth Goodwin's office, all four have agreed to plead guilty and are cooperating with the ongoing investigation.

Coleman worked for the Marshfork Mine No. 1 in Whitesville. Mullins worked for Shonk Powellton No. 1 in Sylvester, and Phalin worked for the Slip Ridge No. 2 mine in Whitesville.

A sourcing agent is responsible for "ordering goods and services from vendors to ensure the continuation of mining operations," the news release notes.

According to the news release, Mullins approached a tire supplier with the intention to allow the tire seller to submit false invoices to Alpha for payment.

"For its participation, the tire seller was told to ‘pad' the false invoices," the news release states.

The news release said the tire vendor gave this information to Alpha's corporate security, who then contacted the FBI and the West Virginia State Police.

"Through the sourcing agents' cooperation and other information, the agents identified an even more prominent supplier involved in the false-billing scheme," the news release continued.

According to the information filed against Steele, his company provided mine supplies and equipment to mines in Boone and Raleigh counties.

From July 2007 through June 2012, the information alleges, Steele, Mullins, Phalin Coleman and others devised a scheme to fraudulently obtain money.

The information filed against Coleman, Mullins and Phalin alleges the three aided and abetted others from November 2011 through May 2012 by creating false purchase orders and submitting them to the company.

Federal prosecutors allege Steele paid cash and gave other things of value to Mullins, Phalin and Coleman and in exchange for these favors, these sourcing agents would certify a payment for false invoices from the company for services it had not provided.

Mullins, Phalin Coleman and Steele face up to 20 years in prison and a $250,000 fine.