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Gary Southern Charged With Fraud in Spill-Tied Bankruptcy

Image: Gary Southern Charged With Fraud in Spill-Tied Bankruptcy
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By    |   Wednesday, 10 Dec 2014 08:04 AM

Gary Southern was charged Monday with bankruptcy fraud, wire fraud, and lying under oath during the bankruptcy proceedings of Freedom Industries, the company he headed that contaminated the drinking water of 300,000 West Virginians in January.

According to Think Progress, the company filed for bankruptcy after spilling 10,000 gallons of a coal-cleaning chemical called crude MCHM into the Elk River. During the proceedings, Southern allegedly committed fraud while trying to protect his $7.7 million net worth from being touched.

A joint federal investigation in to the spill and bankruptcy proceedings by the EPA and FBI has now led to formal charges.

"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," read an FBI affidavit.

Southern testified that he did not work for Freedom Industries before it was sold to another company, Chemstream Holdings, in December 2013 — the month before the spill. He later admitted he was something of a "part-time, financial type consultant" at Freedom before it was sold to Chemstream.

FBI Special Agent James F. Lafferty alleges that these statements were outright falsehoods, and that Southern had been Freedom's Chief Operating Officer since 2009, and had been on the board of directors since 2010.

Southern was arrested in Florida on Monday, and released Tuesday on $100,000 bond, The Associated Press reported. His next hearing is in West Virginia, on December 18.



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Gary Southern was charged Monday with bankruptcy fraud, wire fraud, and lying under oath during the bankruptcy proceedings of Freedom Industries, the company he headed that contaminated the drinking water of 300,000 West Virginians in January.
gary southern, charged, fraud, bankruptcy
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2014-04-10
Wednesday, 10 Dec 2014 08:04 AM
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