A former coal company owner from Letcher County convicted in a disability fraud case has been sentenced to more than two years in prison and ordered to pay a total of $200,591 in restitution.
Harry Taylor, 63, and his wife, Betty, 64, are jointly responsible for repaying the Social Security Administration and the Kentucky Medicaid program.
The restitution represents the amount the two received in disability and health care payments as a result of fraud.
U.S. District Judge Karen K. Caldwell sentenced each of the Taylors to two years and six months in addition to the repayments.
“This theft of benefits frustrated the purpose of these programs and depleted the limited resources available to assist proper beneficiaries of assistance,” U.S. Attorney Robert M. Duncan Jr. said in a news release.
The Taylors owned Cobra #1 Coal Co. but transferred it to their daughter, Carolena Bentley, in 2008, then began receiving disability payments in 2012, according to an indictment.
The two attested they couldn’t work and had no substantial assets or income, when in fact they continued getting significant income from the coal company and also had other assets that would have disqualified them from getting disability checks, a federal grand jury charged.
The grand jury charged that transferring the coal company was a ruse.
A jury convicted the couple last year of conspiring to commit mail and wire fraud, stealing government money and hiding information in connection with health benefits.
Bentley was charged with them but acquitted.
Harry Taylor’s attorney, Joseph Lane, sought a sentence of home incarceration for him, noting Taylor has serious health problems.
But Assistant U.S. Attorney Erin M. Roth argued against a sentence of less than 30 months — the minimum under advisory guidelines — noting that the Taylors allegedly took part in disability fraud in another case.
In that case, Social Security determined Harry Taylor had received more than $8,000 he wasn’t entitled to because he was working at the coal company, but there was no criminal prosecution, according to a court document.
Despite knowing the conduct was illegal, the Taylors “again crafted a scheme to hide the true ownership and access to resources of their business,” Roth wrote.
Caldwell sentenced the Taylors April 16 at the Pikeville federal courthouse, ordering them to report to prison June 11.