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Longtime Employee of  a Harford County Maryland Manufacturer Pleads Guilty  to Leading  a $29 Million Kickback Scheme

☷Longtime Employee of a Harford County Maryland Manufacturer Pleads Guilty to Leading a $29 Million Kickback Scheme

Federal Bureau of Investigation
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   Longtime Employee of a Harford County , Maryland Manufacturer Pleads Guilty to Leading a $29 Million Kickback Scheme The Defendant Also Evaded Over $1 . 375 Million in Federal Taxes Baltimore , Maryland – Eugene Andrew DiNoto , age 51 , of Bel Air , Maryland , pleaded guilty yesterday to conspiracy to commit wire fraud , engaging in an illegal monetary transaction , and filing a false tax return , in connection with a kickback scheme that defrauded his employer of more than $29 million . The guilty plea was announced by United States Attorney for the Distri......ct of Maryland Erek L . Barron; Special Agent in Charge Thomas J . Sobocinski of the Federal Bureau of Investigation , Baltimore Field Office; and Special Agent in Charge Darrell J . Waldon of the Internal Revenue Service - Criminal Investigation , Washington , D . C . Field Office . According to his guilty plea , Eugene DiNoto was a longtime employee of Company 1 , a family - owned global business headquartered in New York , but with manufacturing facilities in Belcamp and Abingdon , Maryland , both in Harford County . Beginning in 2012 , DiNoto and another employee , Elliott Kleinman , began to use their management positions at Company 1 to execute a fraudulent billing scheme whereby they would get illegal kickbacks from various drum vendors doing business with Company 1 , which used drums to store and transport its products . As the facility managers , DiNoto and Kleinman oversaw the purchasing and storing of drums for use at the Harford County manufacturing facilities . They also had authority to review drum invoices and authorize payments to the drum vendors . Anthony P . Urcioli , Sr . , is the owner and President of Tunnel , Barrel & Drum Co , Inc . ( TBD ) , located in Carlstadt , New Jersey , and of another drum supply company called Hartford Fibre Drum , Inc . ( Hartford ) , both of which did business with Company 1 . After TBD became a drum supplier to Company 1 , DiNoto and Kleinman entered into arrangement with Urcioli whereby TBD could continue selling drums to Company 1 if Urcioli agreed to fraudulently invoice Company 1 for more drums than TBD actually sold and delivered to the company . If Urcioli agreed to falsify its invoices in this way , DiNoto and Kleinman said that they and TBD could split the extra money Company 1 paid TBD for the made - up drum deliveries 50/50 . DiNoto told Urcioli that he would split his share of the kickbacks with Elliot Kleinman 75/25 . Urcioli agreed to participate in the false billing scheme . From approximately January 2012 to January 31 , 2020 , DiNoto contacted Urcioli at least once a week to discuss the number and type of drums that he actually wanted delivered to Company 1’s Maryland facilities . During the same conversation , DiNoto told Urcioli how many additional drums to charge , but not deliver , to Company 1 from TBD , and later from Hartford , Urcioli’s other company . After Urcioli created the invoices that fraudulently billed Company 1 for both delivered and undelivered drums , DiNoto approved the invoices and sent them to Company 1’s headquarters to be paid . Urcioli also created a handwritten purchase order ticket that summarized the breakdown of actual and bogus drum orders and how the kickback amounts were calculated . Urcioli would put a copy of the purchase order ticket in an envelope along with DiNoto’s and Kleinman’s share of the kickback amount payable via checks from TBD and Hartford , and then send the envelope to their personal residences in Harford County , Maryland . Sometimes , the invoices were not written as DiNoto had instructed , and he would call Urcioli and tell him to send a corrected invoice of adjust the kickback amounts . Occasionally , DiNoto would correct an arithmetic mistake on Urcioli’s purchase order ticket , take a photograph of the changes he made to the ticket , and then email the corrected ticket back to Urcioli . Urcioli wanted to pay the kickbacks to DiNoto and Kleinman by check so the payments would look like payments to drum wholesalers and be deductible as a cost of goods sold on TBD’s tax returns . DiNoto told Urcioli to make his kickback checks payable to a company linked to DiNoto , called “Sandpiper Enterprises . ” Kleinman advised that he wanted his kickback checks payable to a company he formed called “EDK Management , LTD . ” Urcioli agreed , and in addition to making the kickback checks drawn on TBD and Hartford accounts payable to those companies , Urcioli wrote the word “drums” on the checks to further the pretense of legitimate purchases . DiNoto admitted that even though Sandpiper Enterprises was not engaged in any business , he maintained a commercial bank account for Sandpiper Enterprises at a local financial institution , where he deposited all the kickback checks he received . Before accessing the criminal proceeds , DiNoto routinely transferred all or part of the money into one of the personal bank accounts he maintained at the same bank . DiNoto would then withdraw the funds from his personal account or write a personal check against the balance . Between January 2012 and January 31 , 2020 , Urcioli falsely invoiced Company 1 a total of $20 , 300 , 757 . TBD and Hartford kept half that amount while the remaining funds were sent to DiNoto and Kleinman . DiNoto’s share of the kickbacks was approximately $7 , 071 , 106 . Over the same eight - year period , DiNoto used other drum vendors besides TBD and Hartford to execute his scheme to defraud Company 1 . On behalf of those other vendors , DiNoto submitted and approved invoices totaling approximately $9 , 197 , 181 , resulting in a total loss to Company 1 of approximately $29 , 497 , 938 . For the period of 2017 through 2019 , none of the more than $7 million in kickbacks DiNoto received for his role in the fraudulent billing scheme appeared as income on the tax returns DiNoto filed with the IRS , resulting in a loss to the U . S . government of approximately $1 , 374 , 694 . DiNoto faces a maximum sentence of 20 years in prison for conspiracy to commit wire fraud; a maximum of 10 years in federal prison for engaging in an illegal monetary transaction; and a maximum of five years in federal prison for filing a false tax return . U . S . District Judge Lydia Kay Griggsby scheduled sentencing for DiNoto on July 13 , 2022 at 2:00 p . m . Elliott Dennis Kleinman , age 68 , of Bel Air , Maryland and Anthony P . Urcioli , Sr . , age 78 , of Park Ridge , New Jersey , previously pleaded guilty to their roles in the scheme and are awaiting sentencing . United States Attorney Erek L . Barron commended the FBI and IRS - CI for their work in the investigation . Mr . Barron thanked Assistant U . S . Attorneys Martin J . Clarke and Harry M . Gruber , who are prosecuting the case . For more information on the Maryland U . S . Attorney’s Office , its priorities , and resources available to report fraud , please visit www . justice . gov/usao - md and https://www . justice . gov/usao - md/report - fraud . # # #


05 May 2022 ( May 05 2022 )



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Longtime Employee of  a Harford County Maryland Manufacturer Pleads Guilty  to Leading  a $29 Million Kickback Scheme
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