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Description: Baltimore, Maryland criminal law lawyer represented Defendant charged with commit wire fraud, in connection with conspiracy to commit wire fraud with a billing scheme involving a manufacturing company with facilities in Harford County, Maryland.
Robert A. DiNoto, age 46, from Huntington, New York, is the owner and President of American Pride Distributors (“American Pride”), located in, Woodbury, New York. American Pride sold commercial drum containers used by manufacturers to store and transport products. Robert DiNoto is the brother of Eugene DiNoto (E. DiNoto), a former 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.
As detailed in his plea agreement, beginning no later than 2014, Robert and E. DiNoto agreed to execute a fraudulent billing scheme to defraud Company 1, through the submission of false invoices for undelivered drums. As the facility manager for Company 1, E. DiNoto oversaw the purchasing and storing of drums for use at the Harford County manufacturing facilities and had the authority to review drum invoices and authorize payments to the drum vendors. Robert DiNoto approached E. DiNoto about how he could start his own drum vending company. E. DiNoto subsequently told Robert DiNoto about other drum vendors that were defrauding Company 1 using a fraudulent billing scheme. Robert DiNoto, who was in the real estate business at the time, decided to use a company he owned, called Sandpiper Properties, Inc., trading as American Pride Distributors, to facilitate the scheme to defraud Company 1.
Once American Pride Distributors was formed, Robert DiNoto began receiving drum purchase orders from E. DiNoto for Company 1 to establish a legitimate pattern of drum sales between American Pride and Company 1. However, because Robert DiNoto was never in the business of manufacturing or reconditioning drums, he filled Company 1’s orders by buying the requisite number of drums from an actual drum manufacturer and arranging to ship them to Company 1’s facilities in Harford County, Maryland. Robert DiNoto billed Company 1 for the drums using American Pride invoices, which E. DiNoto approved for payment via emails to Company 1’s accounting department in New York.
Soon thereafter, Robert DiNoto began fraudulently invoicing Company 1 for drums that he and American Pride never delivered to the company. To conceal the fraudulent invoices, he would intermittently send the bogus invoices before and after sending legitimate ones. For example, in 2017, Robert DiNoto sent legitimate invoices #1555 through #1558 between February 15 and April 12 in the amounts of $19,223, $19,419, $18,038, and $20,908, respectively. He then submitted a fraudulent invoice, #1559, and received a payment from Company 1 for $19,448 for a shipment of 358 “NEW 55 GALLON STEEL DRUMS” that were never delivered.
Between December 2016 and August 2019, Robert DiNoto used American Pride’s invoices to bill and receive a total of approximately $257,181 from Company 1 for nonexistent drum deliveries. Robert DiNoto used the proceeds from the fraudulent billings for personal expenses, including to pay his credit card bills.
To avoid scrutiny throughout the conspiracy, the DiNotos kept their familial relationship with American Pride a secret from Company 1 employees. Despite their best efforts, third-party vendors used by American Pride would sometimes inadvertently forward an email or invoice intended for the Robert DiNoto to Company 1. E. DiNoto would criticize Robert DiNoto for the mistake and ask him to remind his third-party vendors never to send correspondence to Company 1’s address. On at least one occasion, Robert DiNoto used an alias to conceal his identity when communicating with Company 1 employees.
Robert DiNoto faces a maximum sentence of 20 years in prison for conspiracy to commit wire fraud. He will also be required to forfeit and pay restitution in the full amount of the loss, $257,181. U.S. District Judge Lydia Kay Griggsby has scheduled sentencing for Robert DiNoto on March 21, 2023 at 2:00 p.m.
Eugene Andrew DiNoto, age 51, of Bel Air, Maryland, previously pleaded guilty to conspiracy to commit wire fraud, engaging in an illegal monetary transaction, and filing a false tax return, in connection with schemes that defrauded his employer of more than $29 million. He is 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.
18 U.S.C. 1349 provides:
Attempt and Conspiracy
Any person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense, the commission of which was the object of the attempt or conspiracy.
Outcome: 11/03/2022 PAPERLESS NOTICE OF HEARING by U.S. Attorney's Office as to Robert Adrian Dinoto. PLEASE NOTE: Defendant is not in custody. A writ has not been requested. A come up has not been requested. An interpreter will not be needed. Sentencing set for 3/2/2023 02:00 PM in Courtroom 5C, 101 West Lombard Street, Baltimore, Maryland 21201, before Judge Lydia Kay Griggsby.(Phelps, Matthew) (Entered: 11/03/2022)
11/03/2022 Corrected PAPERLESS NOTICE OF HEARING by U.S. Attorney's Office as to Robert Adrian Dinoto. PLEASE NOTE: Defendant is not in custody. A writ has not been requested. A come up has not been requested. An interpreter will not be needed. Sentencing set for 3/2/2023 02:00 PM in Courtroom 5C, 101 West Lombard Street, Baltimore, Maryland 21201, before Judge Lydia Kay Griggsby.(Clarke, Martin) (Entered: 11/03/2022)
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