Harford County man sentenced in $29M fraud scheme

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A Harford County man was sentenced Monday to nearly six years in prison and was ordered to pay millions in restitution for defrauding his employer of more than $29 million.

Eugene A. DiNoto, 54, was sentenced to five years and 10 months for a kickback scheme in which he would collaborate with suppliers to falsify invoices, forcing the company he worked for — identified only as Company 1 — to overpay. Over a roughly eight-year period ending in January 2020, DiNoto and Elliott Kleinman, another Company 1 official, split the excess payments with the suppliers.

U.S. District Judge Deborah Chasanow gave DiNoto concurrent sentences of 70 months for conspiracy to commit wire fraud and engaging in an illegal monetary transaction, as well as 60 months for filing a false tax return, followed by three years of supervised release, court records show.

DiNoto was sentenced more than three years after he agreed to a plea deal with federal prosecutors in May 2022. He is at least the fourth person to be sentenced in the scheme.

Company 1 is a “family-owned global business headquartered in New York,” according to a news release from the Maryland U.S. Attorney’s Office. The company has manufacturing facilities at two locations in Harford County and regularly purchases industrial steel drums from suppliers to store and ship its products.

According to prosecutors and the IRS, DiNoto worked closely with Anthony Urcioli, a New Jersey man who owned two commercial drum supply companies. The two would communicate at least weekly to discuss how many drums Company 1 actually needed and how many Urcioli’s companies would charge for.

The total loss to Company 1 was just short of $29.5 million, with Urcioli being the main collaborator.

DiNoto forced Company 1 to overpay Urcioli’s companies by a total of $20,300,757, according to a news release. Urcioli’s companies kept half; DiNoto’s share was $7,071,106, and Kleinman took the rest. Prosecutors noted that DiNoto did not account for that share on his tax returns, resulting in $1,374,694 in lost tax revenue to the federal government.

Urcioli was previously sentenced to time served and 12 months of supervised release, and ordered to pay restitution. He died in April at 81, according to an online obituary.

Kleinman was sentenced in November 2023 to 42 months in prison followed by three years of supervised release for conspiracy to commit wire fraud and tax evasion.

DiNoto, Kleinman and Urcioli were jointly ordered to pay a total of $19,300,757.

DiNoto’s brother, Robert DiNoto, in March 2023 was sentenced to six months in prison and six months of home detention, and ordered to forfeit $514,352.

Eugene DiNoto was represented by the Office of the Federal Public Defender. His lawyer did not immediately answer a phone call Tuesday afternoon.