U.S. officials arrested an American coal executive on charges of foreign bribery, money laundering and wire fraud on March 31, the Department of Justice said.
Charles Hunter Hobson, a former executive with Corsa Coal Corp., was indicted on seven counts. Hobson, according to DOJ, violated the Foreign Corrupt Practices Act, laundered funds and received kickbacks through an alleged scheme to pay bribes to government officials in Egypt related to $143 million worth of coal contracts with state-owned company Al-Nasr For Coke & Chemicals Co. between late 2016 and early 2020.
Hobson, 46, and others caused their company to pay commissions to a sales intermediary to pass on bribes to Al Nasr officials in exchange for contracts, a March 29 indictment against Hobson said. Hobson also conspired to secretly receive kickbacks from a portion of the commissions paid to the unnamed sales intermediary, according to the filing.
Hobson, of Knoxville, Tenn., did not immediately return an emailed request for comment.
The indictment does not explicitly identify Corsa Coal, but a company representative confirmed Hobson worked for Corsa Coal. The representative did not offer further comment and referred S&P Global Commodity Insights to the company's public filings.
Corsa Coal formed a special committee of its board of directors and engaged outside legal counsel to conduct an independent investigation after learning that a third-party sales agent had been charged overseas in connection with a conspiracy in September 2020, according to documents filed with the U.S. Securities and Exchange Commission. The filing said Corsa reported the matter to the U.S. Department of Justice and the Royal Canadian Mounted Police. The company said in the filing that it continues to cooperate with investigations.
"The risks associated with any charges that may be brought against the company or any of its subsidiaries or any related processes are uncertain," the company said in the SEC document.
Charges for violating FCPA
The charges against Hobson are one count of conspiracy to violate the Foreign Corrupt Practices Act, or FCPA; two counts of violating the FCPA; one count of conspiracy to launder money; two counts of money laundering; and one count of conspiracy to commit wire fraud, the DOJ said. Hobson faces up to five years in prison for each bribery conspiracy and bribery charge and up to 20 years for each charge of money laundering conspiracy, money laundering and wire fraud.
Hobson allegedly worked with Frederick Cushmore Jr., who held various international sales positions with Corsa, and a third unnamed co-conspirator to offer and pay bribes to increase international business. Cushmore pleaded guilty to a count of violating the FCPA in November 2021, according to court documents. In February, a judge set Cushmore's sentencing for June 28. He faces up to five years imprisonment.
The March 29 indictment against Hobson said Cushmore, Hobson and other co-conspirators caused the company to make payments of more than $4.8 million in commissions related to the scheme.
Corsa announced in 2017 that it promoted Hobson from vice president of the company's Kopper Glo subsidiary to president of Corsa's Central Appalachia division. The indictment said Hobson purchased a subsidiary of Corsa in March 2018 and spun it off as a separate entity.
Kopper Glo connection
Kopper Glo is a party to a separate legal controversy related to the disorderly reorganization of U.S. coal miner Blackjewel LLC.
Blackjewel bought up several distressed coal assets, only to fall into bankruptcy and leave behind numerous environmental and labor concerns. Kopper Glo purchased assets from Blackjewel's estate but has been in default nearly ever since it closed the transaction in the fall of 2019, Blackjewel's liquidation trustee said in a March 14 court filing.
Hobson is believed to be the president and CEO of Kopper Glo Mining LLC, INMET Mining LLC and Industrial Minerals, according to a LinkedIn profile and also the bankruptcy trustee in the Blackjewel proceedings, according to bankruptcy filings.
The filing added that Hobson had notified the trustee that Kopper Glo was not producing coal at the levels he hoped and, therefore, could not satisfy the company's obligations. Blackjewel said Kopper Glo owes at least $19.3 million despite federal data showing one subsidiary producing over one million tons of coal since 2020.
"The Trustee believes that Kopper Glo's true intent is to postpone an order directing it to satisfy the obligations (or imposing other consequences for its conduct) for as long as possible with the hope that the trustee simply gives up trying to collect the obligations," the trustee wrote. "In the meantime, Kopper Glo will likely continue to produce hundreds of thousands of tons of coal from the purchased mines."
S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.
