The scheme began in 2010, when Eastman Chemical purchased spot market coal from Mountain Energy Resources owner Dale Edward Stanley. Over two years Stanley delivered about 67,000 tons to the group, or about $US5.25 million worth of coal.
According to local news outlet The Times News, citing his plea agreement, Stanley was alleged to have provided Eastman with lower quality coal and concealed the lower quality product by loading it under the higher quality tonnage in rail cars.
Eastman indicated in its contract with MER that steam coal must contain at least 12,500 BTUs or higher and an ash rate of 10% or lower.
The chemical firm retained a third-party inspection and testing company to evaluate the purchased coal, but to sidestep that Stanley paid off a testing company employee to sample only the higher-quality coal.
Prosecutors, the paper said, alleged that Stanley paid the employee on multiple occasions.
Subsequent testing by another group found MER’s coal had an average ash rate of 16.57% and a BTU rate of 10,865.
In all, Stanley faces 22 counts of wire fraud under an indictment filed in the US District Court in November. He pleaded guilty to one of the counts earlier this year.
His sentencing has been set for October 21, at which time he faces up to 20 years’ jail and a $250,000 fine.
