Bel Air resident convicted in kickback scheme sentenced to federal prison
U.S. District Judge Deborah K. Chasanow sentenced 69-year-old Elliott Dennis Kleinman of Bel Air on Dec. 1 to 42 months in federal prison, followed by three years of supervised release, for conspiracy to commit wire fraud and tax evasion, in connection with a kickback scheme that defrauded his employer of more than $20 million, according to a Department of Justice news release.
The sentence was announced by U.S. Attorney for the District of Maryland Erek L. Barron; Acting Special Agent in Charge R. Joseph Rothrock of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Kareem A. Carter of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.
According to his guilty plea, Kleinman was a longtime employee of a family-owned global business headquartered in New York, but with manufacturing facilities in Belcamp and Abingdon. Beginning in 2012, Kleinman and another employee, Eugene DiNoto, began to use their management positions at the company to execute a fraudulent billing scheme whereby they would get illegal kickbacks from various drum vendors doing business with their employer, the release said. The company they worked for used drums to store and transport its products.
Anthony P. Urcioli, Sr., is the owner of two drum businesses, both of which did business with Kleinman’s employer. After one of Urcioli’s businesses became a drum supplier to Kleinman’s employer, Kleinman and DiNoto entered into arrangement with Urcioli agreed to fraudulently invoice Kleinman’s employer for more drums than were actually sold and delivered to the company, the release said.
In December 2013, Urcioli told DiNoto about the other drum supply company he owned. After receiving records that proved that Urcioli’s second business was a legitimate company, DiNoto and Urcioli agreed to expand the kickback scheme to include both businesses.
According to the Department of Justice, between January 2012 and Jan. 31, 2020, Urcioli falsely invoiced Kleinman’s employer a total of $20,300,757. Kleinman’s share of the kickbacks was approximately $2,307,121. Kleinman opened and maintained two commercial bank accounts for a company he formed, including one in the name of Main Street Cigars, a retail store he owns in Bel Air. Kleinman deposited the drum vendor’s checks into one of his business accounts, where it was withdrawn as cash, used to pay personal expenses, or transferred to the bank account for Main Street Cigars.
From 2017 through 2019, Urcioli paid Kleinman approximately $1,034,911 in kickbacks for his role in the fraudulent billing scheme, the Department of Justice said. Kleinman’s 2017 through 2019 income tax returns filed with the IRS did not report those kickback payments as personal or business income, resulting in a loss to the U.S. government of approximately $291,143.
DiNoto, age 53, also of Bel Air, Urcioli, Sr., 78, of Park Ridge, N.J., previously pleaded guilty to their roles in the scheme.