Federal government investigating bankrupt Wyoming coal mine operator Blackjewel for fraud

Source: Casper Star-Tribune

Federal government investigating bankrupt Wyoming coal mine operator for fraud

Camille Erickson
Energy and Natural Resources Reporter
Oct 7, 2019 Updated 20 hrs ago

The unprecedented bankruptcy case involving coal operator Blackjewel showed signs of resolution last week when a federal judge approved the sale of two Wyoming coal mines to a new company called Eagle Specialty Materials. But a court document filed Saturday revealed the federal government has been investigating Blackjewel for potential fraud since before the company filed for bankruptcy, adding another possible wrinkle to a case that has rattled Wyoming’s coal country for over three months.

“The United States was investigating potential violations of the False Claims Act by Debtor, Blackjewel, LLC, and had issued a subpoena to Blackjewel in connection with that investigation,” Fred Westfall, a U.S. attorney stated in court documents.

The federal government asked the West Virginia federal bankruptcy court to delay discharging Blackjewel of its debts, a move that would allow the federal government to continue investigating possible violations of the False Claims Act.

The False Claims Act holds corporations that defraud the government liable.

“The idea behind the law is (a company) should not be able to use bankruptcy to defraud the government out of debts owed to the government,” Joshua Macey, a law professor at Cornell University, studying bankruptcy laws, told the Star-Tribune.

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Read more: https://trib.com/business/energy/federal-government-investigating-bankrupt-wyoming-coal-mine-operator-for-fraud/article_eead9988-e935-11e9-8826-43ce9933c9ef.html