NCJ Number
110973
Date Published
1985
Length
76 pages
Annotation
Following the Arab imposition of the oil embargo in 1972, a variety of investment incentives were developed to deal with the increasing demand for coal.
Abstract
These include the exemption of long-term coal production contracts from wage and price controls, windfall profit tax exemptions, loan guarantees, Securities Exchange Commission and tax exemptions, and the resultant high degree of leveraging. These incentives made coal deals attractive to high tax bracket investors and made them reluctant to cooperate with investigators for fear that fraudulent schemes would jeopardize past tax deductions. By 1977, investigatory agencies were documenting interstate cases of grand larceny, securities fraud, tax fraud, political and business corruption, murder, extortion, heavy equipment theft, loan sharking, narcotics trafficking, price fixing, and bank and tax fraud. In 1980, a multistate strike force, known as the Leviticus Project, was initiated to investigate criminals operating in the Appalachian region. It found that organized criminal elements had acquired substantial interests in and control of the American coal industry. Through the use of foreign coal purchase contracts, they are defrauding foreign purchasers and bankrupting American coal producers. As of September 1984, criminal charges stemming from Leviticus-sponsored probes have resulted in 233 criminal and 179 civil charges against individuals and businesses. In addition, almost $200 million in suspect investments have been referred to the Internal Revenue Service. Photographs, figures, tables, and index.