Former Signal Peak Mine official admits conspiring to not report coal mine accidents that injured workers

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BILLINGS – A former official for Signal Peak Mine, LLC, which operates an underground coal mine near Roundup, today admitted allegations that he conspired with others to not report as required work-place accidents that injured employees, U.S. Attorney Leif M. Johnson said.

Dale Lee Musgrave, 52, of Pompeys Pillar, pleaded guilty to conspiracy to submit false statement in records. Musgrave faces a maximum five years in prison, a $250,000 fine and three years of supervised release.

A plea agreement calls for the government to seek the dismissal of two counts of cocaine trafficking, one count of false statements in mine records and one count of false statement at sentencing if the court accepts the agreement.

U.S. Magistrate Judge Timothy J. Cavan presided. Musgrave was released pending further proceedings. A sentencing date will be scheduled before U.S. District Judge Susan P. Watters. Judge Watters will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.  

The government alleged in court documents that from 2013 to 2019, Musgrave worked as the vice president of underground operations at the Signal Peak mine and was in charge of all underground mining operations. As part of an overall investigation into Signal Peak Energy, law enforcement had been investigating allegations that work-place accidents were not being reported as required by law to the Mine, Safety and Health Administration (MSHA). In July 2020, the investigation identified incidents where accidents had not been reported. On two occasions, multiple individuals asserted that Musgrave forced individuals to not report a workplace accident.

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In 2018, a worker, identified as John Doe 1, had his fingers crushed while loading mining materials. The injury eventually required partial amputation. The government alleged in court documents that as John Doe 1 was being taken to the hospital by the director of mine safety, the victim received a call from Musgrave and that Musgrave directed John Doe 1 to falsely claim that the injury was unrelated to his work at the mine and that he would make it worthwhile for John Doe 1. The director of mine safety told John Doe 1 that he would support whatever decision he made. John Doe 1 eventually agreed because he felt he had no choice. John Doe 1 and the director of mine safety admitted to investigators that this occurred.

The government further alleged that Musgrave, and others with whom he conspired, including the director of mine safety, were required to complete a MSHA accident, injury and illness report, but Musgrave never completed or submitted the form for this incident. Musgrave also did not report John Doe 1 as an “MSHA reportable injury or illness” as required.

In 2019, another worker, identified as John Doe 2, was injured when dirt and debris fell from an excavated mine wall and partially buried him. The accident injured John Doe 2’s leg, which required surgery. Musgrave, John Doe 2 and other workers present all agreed to not report the injury. Rather, Musgrave and other participants decided that John Doe 2 would falsely state that the injury was not related to John Doe 2’s work at the mine. John Doe 2 admitted this to investigators. John Doe 2 falsely told treating physicians that he had injured his leg in an ATV accident. This fictional account continued for several days until other Signal Peak Mine employees discovered the accident had been concealed and reported it to MSHA.

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Earlier in October, as a result of an overall corruption investigation into mine management and operations, Signal Peak Energy pleaded guilty to four counts of willful violation of a health and safety standards, a misdemeanor. A plea agreement in that case recommends that Signal Peak Energy pay a total fine of $1 million and be sentenced to probation. Sentencing is pending. The investigation also resulted in individual convictions of former mine officials and other individuals in associated cases.

Assistant U.S. Attorneys Colin M. Rubich, Zeno B. Baucus and Timothy Tatarka are prosecuting the case, which was investigated by the IRS, FBI, Environmental Protection Agency and the Eastern Montana High Intensity Drug Trafficking Area Task Force.

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