MOUNT CARMEL - A criminal investigation into the former operations of the Lower Anthracite Transportation System (LATS) was launched in May after borough officials found discrepancies in bills submitted by former subcontractor King Coal Tours.

The investigation, which is ongoing due to the number of years during which the alleged misappropriations occurred, specifically targets the operations and management of the Kulpmont-based King Coal, as well as former transit coordinator Gerald Matzura and former borough transit manager Joseph K. Bass.

King Coal, family owned and operated, has been in the charter and tour business since 1978. It was providing drivers, maintenance and cleaning, insurance and diesel fuel for the fleet of LATS-owned buses for the last 28 years.

Records showed charges for fuel that is not used in the LATS buses and for tires and parts that don't fit the vehicles, borough records showed. The borough also believes some labor charges were excessive.

When borough officials began questioning the discrepancies in July 2012, King Coal began lowering its monthly bills, from approximately $35,000 in July and August 2012 to $17,272 in January.

King Coal eventually ended its contract with the borough in January, and council approved the Shamokin-based Catawese Coach Lines to finish out the 2012-13 fiscal year.

LATS cost Catawese $21,871 to run in August, $12,185 in September, $13,634 in October and $11,954 in November. The numbers were higher in August due to a run to Knoebels Amusement Resort having been added for the summer.

PennDOT provides LATS funding from federal and state sources, including the Lottery Senior Citizen Free Transit Fund, and requires reports on the operation. The borough, which is awarded grant money, enters into a contract with a bus service provider, and reimburses that company for its expenses in operating the system. LATS owns its fleet of four buses.

Jonathan Else, vice president of operations for King Coal, has declined comment throughout the ordeal.