Gary May, 43, of Bloomingrose, W.Va., pleaded guilty today in federal court before United States District Judge Irene C. Berger to conspiracy to impede MSHA’s enforcement efforts at Massey Energy’s Upper Big Branch mine between February 2008 and April 5, 2010.
Signaling that the case is far from over, May has agreed “to be named as an unindicted co-conspirator and unindicted aider and abettor, as appropriate, in subsequent indictments or informations,” and will also appear again before a grand jury. He faces up to five years’ imprisonment and a $250,000 fine when he is sentenced on August 9, 2012.
In commenting on May’s guilty plea, U.S. Attorney for W.Va., Booth Goodwin said, “People who run coal mines have a fundamental obligation to be honest with mine regulators. When mine operators resort to tricks and deceit to keep government officials in the dark, our mine safety system unravels and miners are put in harm’s way. The least we can do for coal miners is protect the integrity of the laws designed to keep them safe.”
Under the conspiracy charge, “May, together with others known and unknown, unlawfully, willfully, and knowingly combined, conspired, confederated, and agreed together with each other to defraud the United States and an agency thereof, to wit, to hamper, hinder, impede, and obstruct by trickery, deceit, and dishonest means, the lawful and legitimate functions of DOL and its agency, MSHA, in the administration and enforcement of mine health and safety laws at UBB,” according to court documents.
May has stated to the court that he and others gave advance notice of MSHA inspections, “knowing and intending that the persons receiving this advance notice would conceal and cover up violations of mine health and safety laws that otherwise would result in citations and orders issued by MSHA.” May and others used code phrases to underground miners to try and conceal and cover up MSHA violations before the MSHA inspectors got down into their section of the mine. May also admitted that he would hang or rehang ventilation curtains to direct additional air to the area where the inspection was to take place or if there were going to be respirable dust samples taken for that particular area. May would also rock dust areas when he knew MSHA was coming.
May pleaded guilty to falsifying and authorizing the falsification of examination record books at UBB and ordered an employee to omit from the record book conditions of high water that made it unsafe to travel in parts of the mine. He also admitted to having a methane monitor rewired so a continuous miner would not automatically shut-off when excessive methane was detected.
May has stated that during his entire employment at UBB, “health and safety laws were routinely violated at the mine, in part because of a belief that following those laws would decrease coal production …and
also would result in monetary penalties.” May also knew that additional citations would bring the mine that much closer to a “potential patten of violations,” resulting in “increased scrutiny of the mine by MSHA and in MSHA’s issuance of additional serious citations and orders.”
Gary May was charged and pleaded guilty to violating 18 U.S.C. § 371, also known as the “general conspiracy statute.”
The following is from the U.S. Attorneys Criminal Resource Manual on the legal definition and case law relied upon for such a charge.
The general conspiracy statute, 18 U.S.C. § 371, creates an offense “[i]f two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose. (emphasis added). See Project, Tenth Annual Survey of White Collar Crime, 32 Am. Crim. L. Rev. 137, 379-406 (1995)(generally discussing § 371).
The operative language is the so-called “defraud clause,” that prohibits conspiracies to defraud the United States.
Although this language is very broad, cases rely heavily on the definition of “defraud” provided by the Supreme Court in two early cases, Hass v. Henkel, 216 U.S. 462 (1910), and Hammerschmidt v. United States, 265 U.S. 182 (1924). In Hass the Court stated:
The statute is broad enough in its terms to include any conspiracy for the purpose of impairing, obstructing or defeating the lawful function of any department of government . . . (A)ny conspiracy which is calculated to obstruct or impair its efficiency and destroy the value of its operation and reports as fair, impartial and reasonably accurate, would be to defraud the United States by depriving it of its lawful right and duty of promulgating or diffusing the information so officially acquired in the way and at the time required by law or departmental regulation.
Hass, 216 U.S. at 479-480.
In Hammerschmidt, Chief Justice Taft, defined “defraud” as follows:
To conspire to defraud the United States means primarily to cheat the Government out of property or money, but it also means to interfere with or obstruct one of its lawful governmental functions by deceit, craft or trickery, or at least by means that are dishonest. It is not necessary that the Government shall be subjected to property or pecuniary loss by the fraud, but only that its legitimate official action and purpose shall be defeated by misrepresentation, chicane or the overreaching of those charged with carrying out the governmental intention.
Hammerschmidt, 265 U.S. at 188.
The general purpose of this part of the statute is to protect governmental functions from frustration and distortion through deceptive practices. Section 371 reaches “any conspiracy for the purpose of impairing, obstructing or defeating the lawful function of any department of Government.” Tanner v. United States, 483 U.S. 107, 128 (1987); see Dennis v. United States, 384 U.S. 855 (1966).
The “defraud part of section 371 criminalizes any willful impairment of a legitimate function of government, whether or not the improper acts or objective are criminal under another statute.” United States v. Tuohey, 867 F.2d 534, 537 (9th Cir. 1989).
The word “defraud” in Section 371 not only reaches financial or property loss through use of a scheme or artifice to defraud but also is designed and intended to protect the integrity of the United States and its agencies, programs and policies. United States v. Burgin, 621 F.2d 1352, 1356 (5th Cir.), cert. denied, 449 U.S. 1015 (1980); see United States v. Herron, 825 F.2d 50, 57-58 (5th Cir.); United States v. Winkle, 587 F.2d 705, 708 (5th Cir. 1979), cert. denied, 444 U.S. 827 (1979).
Thus, proof that the United States has been defrauded under this statute does not require any showing of monetary or proprietary loss. United States v. Conover, 772 F.2d 765 (11th Cir. 1985), aff’d, sub. nom. Tanner v. United States, 483 U.S. 107 (1987); United States v. Del Toro, 513 F.2d 656 (2d Cir.), cert. denied, 423 U.S. 826 (1975); United States v. Jacobs, 475 F.2d 270 (2d Cir.), cert. denied, 414 U.S. 821 (1973).
Thus, if the defendant and others have engaged in dishonest practices in connection with a program administered by an agency of the Government, it constitutes a fraud on the United States under Section 371. United States v. Gallup, 812 F.2d 1271, 1276 (10th Cir. 1987); Conover, 772 F.2d at 771. In United States v. Hopkins, 916 F.2d 207 (5th Cir. 1990), the defendants’ actions in disguising contributions were designed to evade the Federal Election Commission’s reporting requirements and constituted fraud on the agency under Section 371.
The intent required for a conspiracy to defraud the government is that the defendant possessed the intent (a) to defraud, (b) to make false statements or representations to the government or its agencies in order to obtain property of the government, or that the defendant performed acts or made statements that he/she knew to be false, fraudulent or deceitful to a government agency, which disrupted the functions of the agency or of the government. It is sufficient for the government to prove that the defendant knew the statements were false or fraudulent when made. The government is not required to prove the statements ultimately resulted in any actual loss to the government of any property or funds, only that the defendant’s activities impeded or interfered with legitimate governmental functions. See United States v. Puerto, 730 F.2d 627 (11th Cir.), cert. denied, 469 U.S. 847 (1984); United States v. Tuohey, 867 F.2d 534 (9th Cir. 1989); United States v. Sprecher, 783 F. Supp. 133, 156 (S.D.N.Y. 1992)(it is sufficient that the defendant engaged in acts that interfered with or obstructed a lawful governmental function by deceit, craft, trickery or by means that were dishonest”), modified on other grounds, 988 F.2d 318 (2d Cir. 1993).