Billings, Monte. (NMB) – Signal Peak Energy, LLC, which operates an underground coal mine near Roundup, has pleaded guilty to criminal charges of intentional violation of health and safety standards and agreed to pay a $1 million fine as part of a proposed plea agreement.

Signal Peak Energy pleaded guilty in its initial court appearance through a representative and pleaded guilty to four misdemeanor charges of deliberate violation of health and safety standards. The maximum fine is USD 250,000.

The plea agreement recommends a criminal fine of US$250,000 for each conviction, with a total fine of US$1 million, which is an appropriate treatment of the case. Both parties further agreed that probation was appropriate. If the court accepts the plea agreement, the company does not have the right to automatically withdraw the plea. If the court rejects the plea agreement, the company can withdraw the plea and proceed to trial.

Chaired by the United States District Judge Timothy J. Cavan. The sentencing date of U.S. District Judge Susan P. Watters has not yet been determined.

"Signal Peak's actions indicate its flagrant disregard for the health and safety of its employees and the protection of the environment. Companies that habitually and deliberately violate regulations will be fully investigated and prosecuted within the scope of the law," said Acting U.S. Attorney Johnson.

The Signal Peak Energy prosecution is part of an extensive corruption investigation into mine management and operations, which not only resulted in minor convictions for worker safety and environmental crimes, but also some former mine officials and colleagues for corruption, tax evasion, bank fraud, money laundering, drugs and guns.

The personal convictions of former mine officials include Larry Wayne Price, Jr., former vice president of ground operations, who was sentenced to jail for defrauding the company for $20 million; Zachary Ruble, former open-pit mine manager , Was sentenced to probation for conspiracy to defraud Signal Peak Energy of US$2.3 million.

The third former mining official and former vice president of underground operations, Dale Lee Musgrave, pleaded not guilty to the indictment alleging cocaine trafficking and false statements in mine records, and is currently awaiting trial.

Related cases include former Rocky Mountain Bank loan officer Stephen P. Casher, who was sentenced to jail and fined for bank fraud and money laundering charges for involvement in Larry Price Jr.’s loan program; Kisling Quality Builders owners James and Timilyn Kisling, they Sentenced to probation and fines for participating in the planned tax evasion of the Billings residence of Larry Price Jr.; Mark Luciano, a resident of Nevada, jailed for trafficking in cocaine; and Larry Price Jr. (Larry Price, Jr.)'s secretary Todd Alan Irwin (Todd Alan Irwin), he was sentenced to probation for a felony possession of a firearm.

Peters Equipment Company owner Robert Wayne Ramsey (Robert Wayne Ramsey) has been charged in connection with wire fraud information in Signal Peak Energy's equipment sales plan and is currently awaiting subpoena.

In the Signal Peak Energy case, the government alleged in court documents that from 2013 to 2018, Signal Peak Energy habitually violated the mandatory health and safety standards in the Mine Safety and Health Act during mine operations. These violations include environmental safety and worker safety standards. During this period, the top management of the mine (including the president and chief executive officer, vice president of ground operations, vice president of underground operations, and safety manager) also fully understood, guided and participated in these violations.

The government further claimed that in the summer of 2013, senior management of Signal Peak Energy instructed mine employees to improperly dispose of mine waste by pumping the waste into the abandoned part of the mine. This waste, called "mud", consists of waste water, industrial chemicals used in mining processes, and unprocessed soil that contains heavy metals (including arsenic and lead that exceed the tolerance of groundwater). Mine employees pump this mud into the abandoned part of the mine for about two weeks until the part is filled. Disposing of mine waste in this way requires approvals from the Mine Health and Safety Administration (MSHA) and Environmental Protection Agency (EPA), which Signal Peak Energy has not obtained.

According to the government, in the spring of 2015, Signal Peak Energy agents commissioned two drill holes on the ground to lead to another abandoned part of the mine. The senior mine manager instructed the staff to pump more mud into the waste section through drilling holes. This mud is similar to the mud that was mishandled in 2013. Estimates vary, but this pumping lasted up to six weeks. After witnesses discovered that the seal between the abandoned mine and the operating mine was broken, causing a flood in the operating mine area, the pumping stopped. Signal Peak Energy has obtained a permit to inject water into the ground through a borehole, but the permit does not allow the disposal of waste slurry.

In January 2018, Signal Peak Energy failed to report an employee injury as required. The employee was identified as John Doe 1. His fingers were crushed and needed to be amputated while he was working in the mine. While Doe 1 was moving large mining equipment as part of his duties, some of the equipment fell into his hands. Doe 1 met with the safety manager, who began to drive him to the hospital for treatment. On the way, Doe 1 had a phone conversation with the vice president of underground operations. The vice president of underground operations pressured Doe 1 not to report the injury as work-related, and said that he would make Doe 1 worth it. The security manager witnessed this, but did not intervene. The safety manager then sent Doe 1 to the hospital instead of accompany him in according to the mine policy. Doe 1 lied that the injury occurred at home and had nothing to do with work. When Doe 1 returned to work later, the vice president of underground operations gave Doe 1 an envelope containing $2,000.

In May 2018, Signal Peak Energy again failed to report injuries as required. An employee named John Doe 2 was working in the underground part of the mine when the rock slipped from the wall to Doe 2's head, causing severe tears. The duty manager immediately called the safety manager. The safety manager met with Doe 2 and drove Doe 2 out of the mine, and expressed his intention to send Doe 2 to the hospital. Instead, the safety manager drove Doe 2 home. Doe 2 waited until the next morning to see the doctor, and falsely claimed that the injury was caused by a shelf in his garage that fell on his head. The doctor treated the laceration and Doe 2 resumed work and started his next scheduled shift. Doe 2 was unable to complete one shift or several shifts due to injury. Doe 2’s lost time was accused of taking leave without his consent.

Assistant U.S. Attorneys Colin M. Rubich, Zeno B. Baucus, and Timothy Tatarka are prosecuting the case, and the IRS, FBI, and Environmental Protection Agency are investigating the case.

Provided by the U.S. District Attorney's Office of Montana

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