August 25, 2017
Former Scrap Metal Company Officer Pleads Guilty in Connection With a Contract Overbilling Scheme Involving DOT Grantees
On August 17, 2017, Michael A. Valenti III, former senior vice president of Cinelli Iron & Metal Co. (CIMCO) was charged by information in U.S. District Court, Newark, New Jersey, with conspiracy to commit wire fraud. He pleaded guilty on the same day, and his sentencing is scheduled for November 21, 2017.
CIMCO, previously headquartered in Secaucus, New Jersey, was in the business of buying, transporting, and reselling scrap metal from construction sites in the tristate area. CIMCO had multiple contracts with several DOT grantees, such as the New York State Metropolitan Transportation Authority (MTA) and New Jersey Transit. CIMCO hauled scrap metal from MTA depots and corporate jobsites, weighed the metal, and then purchased it from the contracting agencies based on its weight. Valenti acknowledged that, between approximately 1999 and March 2016, CIMCO fraudulently underreported the weight of scrap metal hauls in order to pay less than the contractually obligated amounts. In furtherance of the scheme, CIMCO fraudulently altered required weight tickets used for obtaining reimbursement and reduced scrap metal loads, prior to weighing, with magnets.
DOT-OIG is conducting this investigation jointly with DOL-OIG and the FBI. The case is being prosecuted by the U.S. Attorney’s Office, District of New Jersey.