Workers compensation auditor accused of defrauding employer

A West Virginia workers compensation auditor is accused of defrauding his employer, BrickStreet Mutual Insurance Co., after he allegedly allowed clients to underreport payroll to the Charleston, W.Va.-based insurer.

Arville W. Sargent, 52, was charged with honest services mail fraud and tax evasion Tuesday, according to a statement from the U.S. Attorney's Office for the Southern District of West Virginia.

According to the attorney's office, Mr. Sargent allegedly defrauded BrickStreet between 2006 and 2011 by allowing four temporary staffing firms that work in the coal mining industry to "drastically" underreport their payrolls. In return, Mr. Sargent is accused of receiving hundreds of thousands of dollars in cash and gifts, including a Yamaha Rhino all-terrain vehicle.

Several staffing agency principals have admitted their participation in the alleged scheme, according to the attorney's office. If convicted, Mr. Sargent and three of the staffing executives face up to 25 years in prison and a fine of up to $500,000.

Another staffing executive faces up to 10 years in prison and a $500,000 fine after he allegedly paid part of his firm's payroll through a shell company to avoid paying higher comp premiums.