Ex-Williamson mayor pleads guilty to lying to FBI, IRS - Beckley, Bluefield & Lewisburg News, Weather, Sports

Ex-Williamson mayor pleads guilty to lying to FBI, IRS

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Darrin McCormick Darrin McCormick
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WILLIAMSON, WV -

Former Williamson Mayor Darrin McCormick has admitted he lied to federal agents investigating suspicious cash withdrawals orchestrated by the principals of Aracoma Contracting LLC.

McCormick, 50, faces up to five years in prison and a $250,000 fine at sentencing, which is set for 2 p.m. Aug. 28, after pleading guilty to lying to agents from the FBI and IRS.

U.S. Attorney Booth Goodwin said McCormick, who formerly managed the Williamson branch of the Bank of Mingo, denied any knowledge of a cash “structuring” scheme undertaken by Aracoma owner Jerome Edward Russell, 50, of Williamson and Frelin R. Workman, 58, of Belfrey, KY.

The two routinely dispatched employees to the Mingo bank to make cash withdrawals in increments of $10,000, a practice known as “structuring,” to avoid mandatory reporting to the IRS. The company used the money to pay employees with cash as part of a scheme to avoid payroll taxes, Goodwin said.

Some of the money also was used to bribe Arville W. Sargent, 52, of Chapmanville, a premium auditor for BrickStreet Mutual Insurance Co., Goodwin said. In exchange for cash, Sargent intentionally under-reported Aracoma's payroll, which resulted in the company paying lower insurance premiums to BrickStreet.

Agents interviewed McCormick at his home in February 2013. When they asked him if he was aware of Aracoma's suspicious banking practices, McCormick said he lied even though he knew it was important to the 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,” Goodwin said. “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.”

Sargent was sentenced in October to 72 months in prison and ordered to pay more than $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 roles in the scheme, while the corporation, Ararcoma, was ordered to forfeit $405,000 to the government.

The 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 U.S. Attorney Thomas Ryan is handling the prosecution.