Brain Injury Newsroom

Slater's Companies Provided Employees Supposed To Provide Workers’ compensation Insurance

An owner of employment agencies that provided coal workers to many Kentucky mines was indicted yesterday by a federal grand jury on money laundering and mail fraud charges.

Gary Linsey Slater, 47, of Harrogate, Tenn., was indicted along with four others: his wife, Anita Carol Slater, 46; Oliver Bruce Hurley, 53, of Speedwell, Tenn.; Charles William Johnston, 55, of Tazewell, Tenn., and Carolyn Gambrel, 55, of Araja. The five face multiple counts related to a scheme to defraud insurance companies of more than $6 million.

If convicted, the maximum sentence each could face is 20 years in prison, a fine of $250,000 and three years of supervised release.

The indictment alleges that the Slaters, Johnston and Hurley defrauded insurance companies by hiding the number of employees the companies employed. According to the indictment, the companies Gary Slater owned or was the principal operator of include Carol & Dale Contracting Inc., Carol-Dale Inc., B&G Contracting, Cumberland Gap Contracting Inc. and Cumberland Gap Inc.

According to a press release from U.S. Attorney Gregory Van Tatenhove's office, Slater's companies provided employees to coal mine operators and were supposed to provide workers' compensation insurance for those employees. But from 1999 to January 2005, Slater and his employees hid about 90 percent of the people on company payrolls, drastically reducing their premiums, the indictment alleges.

Some of the insurance companies that were allegedly defrauded by the scheme include Kentucky Employers' Mutual Insurance, Birmingham Fire Insurance Company and other members of American International Group or AIG.

Gary Slater, Hurley, Johnston and Gambrel were also charged yesterday with a separate count of conspiracy to launder the proceeds of the alleged fraud by creating fictitious business invoices that allowed them to convert checks to cash, the indictment said.

Gary Slater and Hurley allegedly created two trucking companies and then paid those trucking companies for services they never did, the indictment said. The fake trucking companies would then issue a check for fuel at Gambrel's Food Mart, which Gambrel owned.

Instead of providing gas, Gambrel would cash the check, keep a fee and then give the cash to either Hurley or Slater.

Using the above scheme, Slater and Hurley were able to convert more than $2.3 million to cash, the indictment said.

The U.S. government wants to seize cash and assets from Slater and Hurley to recover the $6 million owed to the insurance companies and the $2.3 million they converted to cash. Included in the list of items the government would like to seize is more than $600,000 in Slaters' checking account, five boats, Hurley's airplane, a condominium owned by the Slaters in Sevierville, Tenn., and a John Deere tractor.