This week, Acting U.S. Attorney William E. Fitzpatrick announced that the former senior vice president of sales at Cinelli Iron & Metal Co. pleaded guilty to participating in a 17-year conspiracy to defraud customers out of millions of dollars. 43-year-old Michael A. Valenti III of Hasbrouck Heights, New Jersey pleaded guilty in front of U.S. District Judge Susan D. Wigenton in a Newark federal court.
According to documents in the case and statements made, CIMCO, which was based out of Secaucus, New Jersey, purchased scrap metal for resale and had three recycling facilities in the state. CIMCO frequently delivered scrap metal containers to job sites and removed them after they were full. Customers received compensation based on type and net weight of the scrap materials.
From 1999 to March of 2016, Valenti, Joseph Cinelli Sr., Craig Cinelli, David Barteck and others allegedly implemented various fraudulent business practices to purchase the scrap metal for less than the company should have paid. Then, the company proceeded to resell the scrap metal at a profit. To ensure the company wasn’t required to pay the agreed upon amounts, the defendants altered documents to decrease the weight of the metal, removed metal before it was weighed, and misrepresented the types of metal.
During the plea hearing, Valenti admitted that the conspiracy resulted in a loss of more than $9.5 million, but less than $25 million. Valenti pleaded guilty to conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison and a $250,000 fine or twice the gross gain or loss from the offense. Valenti is scheduled to be sentenced on November 21, 2017.