The minority owner of a Secaucus scrap metal company pleaded guilty to wire fraud, admitting a 17-year scheme that defrauded customers out of millions of dollars, Acting U.S. Attorney William E. Fitzpatrick said.
By John Heinis/Hudson County View
Craig Cinelli, 47, of Allendale, pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark federal court to conspiracy to commit wire fraud yesterday, authorities said.
Brothers/CIMCO owners Craig and Joseph Cinelli, Sr. were charged with conspiracy back in August.
David Barteck, 53, of Wood Ridge, the former chief financial officer of CIMCO, and Michael A. Valenti III, 43, of Hasbrouck Heights, the former senior vice president of sales at CIMCO, each also previously pleaded guilty to participating in the conspiracy.
CIMCO, which was headquartered in Secaucus, purchased scrap metal for resale and operated three scrap metal recycling facilities in New Jersey. CIMCO trucks would deliver scrap metal containers to customer jobsites and remove them after they were filled.
CIMCO then purportedly paid customers based on the type and net weight of the scrap material.
From 1999 through March of 2016, Craig Cinelli, his brother, Joseph Cinelli Sr., Barteck, Valenti, and others allegedly used a variety of fraudulent business practices to buy scrap metal from CIMCO’s customers for less than CIMCO should have paid, officials said.
The company then resold the scrap metal at a profit.
Instead of paying the proper, agreed-upon amounts for the actual weight, members of the conspiracy used a variety of techniques to misrepresent the true weight and type of the scrap metal, including altering documents to reflect a lower weight, removing scrap metal from a haul before it was weighed and misrepresenting the types of scrap metal contained in a haul, authorities said.
Cinelli admitted that the loss caused by the conspiracy that was reasonably foreseeable to him was more than $9.5 million, but less than $25 million.
The wire fraud conspiracy and substantive wire fraud counts each carry a maximum potential penalty of up to 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Feb. 15, 2018.