Gary Southern charged fraud on Monday. He was charged with multiple accounts of fraud, namely, wire fraud, bankruptcy fraud, and lying under oath while the bankruptcy proceedings of Freedom Industries were still ongoing.
Freedom Industries is actually the company that Southern headed. Unfortunately, the company contaminated the drinking water of 300,000 people of West Virginia in January.
The company reportedly filed for bankruptcy after spilling 10,000 gallons of chemicals into the Elk River. The spilled chemicals were used for cleaning coal and were referred to as crude MCHM.
During the bankruptcy proceedings, however, Gary Southern charged fraud allegedly committed fraud when he attempted to protect his $7.7 million net worth from being touched. Now, a joint federal investigation by the FBI and the EPA has been implemented for the spill and the said bankruptcy proceedings, and has, led to formal charges.
The FBI affidavit said, "Shortly after the leak and discharge of MCHM into the Elk River was discovered on January 9, 2014, Southern engaged in a pattern of deceitful behavior, which included numerous false and/or fraudulent statements about his role at Freedom, his role in the sale of Freedom to Chemstream, and his knowledge about conditions at the Etowah Facility."
Gary Southern charged fraud testified that he never worked for Freedom Industries before it was purchased by another company, Chemstream Holdings, in December last year. This was actually a month before the spill took place.
However, he later admitted that he was what he referred to as a "part-time, financial type consultant" at Freedom before it was sold to Chemstream.
James F. Lafferty, an FBI Special Agent, has alleged that the statements made by Gary Southern charged fraud were outright false. According to Lafferty, Southern was actually the Chief Operating Officer of Freedom since 2009 and was also on the company's Board of Directors since 2010.
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