W. Va. Governor Justice’s company subpoenaed in federal probe
CHARLESTON — Just after Gov. Jim Justice agreed to pay a debt owed by one of his many companies, federal investigators are seeking tax information for another company he owns.
The U.S District Court for the Southern District of West Virginia issued a subpoena Monday for all documents used for preparation of tax returns for Southern Coal Corp.
The subpoena requires that these documents be sent to attorneys representing the National Union Fire Insurance Co. by July 10.
Southern Coal, headquartered in Roanoke, Va., owed more than $2.7 million to National Union as of 2014, according to court records.
The insurance company took Southern Coal to a U.S. District Court in New York to recover the debt, where judgment was granted in National Union’s favor for more than $800,000 in December 2017.
Despite making payments on the debt, Southern Coal defaulted on an agreement between the two companies.
That resulted in a writ of execution issued by the U.S. District in southern West Virginia in August 2018.
Southern Coal was ordered to pay the $559,286 remaining, plus $196,645 in prejudgment interest and $87,473 in attorneys’ fees and expenses.
The writ also allowed the U.S. Marshals Service to seize the funds of Southern Coal. When checking bank accounts, the marshals found three accounts for the company empty.
Monday’s subpoena comes after another Justice-owned coal company, Justice Energy, reached an agreement with the U.S. Attorney’s Office for the Southern District of West Virginia to pay off a $1.2 million civil contempt penalty. U.S. District Judge Irene Berger issued an order June 7 accepting a deal made with Bluestone Resources, another Justice-owned coal company, to make three payments of $410,000 by Nov. 15 on behalf of Justice Energy. The first payment is due June 17.
That case involved Justice Energy, the manager of a McDowell County mine, refusing to pay $148,000 for parts and equipment purchased from James River Equipment in 2013. The June 7 deal came after federal investigators threatened to pierce the corporate veil and go after Justice and his son Jay.
Last month, the U.S. Attorney’s Office for the Western District of Virginia and the U.S. Mine Safety and Health Administration filed a civil action against the 23 Justice-owned coal companies — including Southern Coal — for $4.8 million in unpaid penalties accumulated between 2014 and 2019.
West Virginia MetroNews has reported about a $2.7 million ruling by a New Jersey federal court ordering the Greenbrier County sheriff to seize personal property to pay off the debt. The Logan County Sheriff’s Office is also selling off shares of two Justice-owned companies. This is on top of a federal subpoena by the Public Integrity Unit of the Department of Justice looking into the former Greenbrier Classic golf tournament and the charity that runs it, as well as subpoenas by the U.S. District Court seeking Justice’s tax records.
Speaking at a press conference Monday, Justice addressed the issues facing the businesses managed by his son and daughter Jill. Justice said the public doesn’t need to be concerned about his businesses. According to the Lexington Herald-Leader, Justice paid $1.2 million in delinquent taxes in several Kentucky counties.
“Our businesses are doing better right now than they’ve done for the last probably six years,” Justice said. “Businesses are good, people are getting paid, and I’ve gone through a heck of a two weeks or a month.”