FTA Debars Former Scrap Metal Company Officers for 3 Years in Connection With Their Guilty Pleas to Fraud Charges
On November 6, 2017, the Federal Transit Administration (FTA) debarred David Barteck, former chief financial officer for Cinelli Iron & Metal Co. (CIMCO), and Michael Valenti, former CIMCO senior vice president of sales, from Federal contracting and other procurement and non-procurement transactions for a period of 3 years.
On July 26, 2017, and August 17, 2017, Barteck and Valenti, respectively, pleaded guilty, at the U.S. District Courthouse, Newark, New Jersey, to conspiracy to commit wire fraud for their involvement in defrauding DOT grantees. 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, then purchased it from the contracting agencies based on its weight. Barteck and Valenti acknowledged that between approximately 1999 and March 2016, CIMCO fraudulently underreported to the agencies 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. The overall fraud loss has been estimated to be as high as $25 million.
DOT-OIG is working this investigation with DOL-OIG and the FBI, and this matter is being prosecuted by the U.S. Attorney’s Office, District of New Jersey.