August 16, 10

NEWS / Mining Firm Officials Plead Guilty to Defrauding Firm Out of Thousands

LEXINGTON—Three officials from a mining firm in Georgetown, Ky. have all pleaded guilty to their roles in a scheme to defraud their employer out of hundreds of thousands of dollars.

Clifford Bramel Jr., 51, was the final member of the scheme to plead guilty. Bramel pleaded guilty today to conspiracy to commit mail fraud before U.S. District Court Judge Karl S. Forester.

Bramel, the company’s former maintenance supervisor, admitted that he conspired with the company’s former vice-president of operations, John Tapp, and others to defraud the mining firm known as Minova out of more than $700,000.

Minova is an international company, which specializes in the production and sale of chemicals and associated equipment that are used in the underground mining industry. The three defendants in the case worked out of Minova’s facility in Georgetown.

Tapp, 43, previously admitted that he conspired with other Minova employees and some of the company’s outside vendors in order to defraud Minova. Tapp admitted that he led the scheme which cost the company $700,000.

According to Tapp’s plea agreement, starting in 2006, he used illegal tactics such as kickbacks, falsely inflated invoices, fraudulent abuse of the company’s expense accounts and payments to himself and to bogus vendors for services and products that were never performed. Tapp pleaded guilty to a wire fraud conspiracy charge on August 6.

According to court documents, Tapp was a Minova employee from 1992 until 2009. He negotiated prices and contracts with vendors that provided goods and services to Minova. He also approved many business related expenses incurred by Minova’s employees.

Bramel and Alexander admitted that under Tapp’s direction they served separate but similar roles in the scheme. They also acknowledged that they caused Minova to pay conspirators for unnecessary or nonexistent services or goods that were never delivered. Both also said they were involved in the abuse of Minova’s employee expense reimbursement system. Alexander admitted that his criminal actions as part of Tapp’s scheme cost the company approximately $148,000 (out of the $700,000) and Bramel admitted that he defrauded the company of $63,000 (out of the $700,000).

Bramel had worked for Minova from 1981 until 2009, while Alexander was employed there from 1997 to 2009. Alexander pleaded guilty on August 6 to a mail fraud conspiracy charge.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, and Elizabeth Fries, Special Agent in Charge of the Federal Bureau of Investigation jointly made the announcement today after Bramel entered his guilty plea.

The investigation was conducted by the FBI. The U.S. Attorney’s Office was represented in the case by Assistant United States Attorney Brandon W. Marshall.

Sentencing hearings for all three defendants are set for November 12. All three men face maximum prison sentences of 20 years. However, any sentence following conviction would be imposed by the court after consideration of the United States Sentencing Guidelines and the federal statute governing the imposition of sentences.

http://louisville.fbi.gov/dojpressrel/pressrel10/lo081310.htm

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