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Long Island resident Robert DiNoto, 48, of Huntington, pleaded guilty this week to conspiracy to commit wire fraud in connection to a Harford County company with his brother, Eugene DiNoto, who submitted false invoices for undelivered commercial drum containers, according to federal officials.
DiNoto was the owner and President of American Pride Distributors in Woodbury, in Nassau County, which sold commercial drum containers used by manufacturers to store and transport products, they said.
His brother was a former longtime employee of a family-owned global business headquartered in New York, but with manufacturing facilities in Belcamp and Abingdon, Maryland.
Beginning in 2014, federal prosecutors say that the DiNotos agreed to defraud the global business by submitting false invoices.
Officials noted that Eugene 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 when he was approached by his brother about starting his own company.
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, according to the Department of Justice.
Once American Pride Distributors was formed, Robert DiNoto began receiving drum purchase orders from his brother to establish “a legitimate pattern of drum sales between American Pride and the other company."
However, because he was never in the manufacturing business nor the reconditioning drum business, investigators say that he instead filled orders by buying the requisite number of drums from an actual drum manufacturer and arranged to ship them to Harford County.
DiNoto then billed the company for the drum using American Pride invoices, which were approved by his brother. He later began invoicing the company for drums that were never even 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 the company for nonexistent drum deliveries.
Robert DiNoto then used the proceeds from the fraudulent billings for personal expenses, including to pay his credit card bills.
Prosecutors said that to avoid scrutiny throughout the conspiracy, the DiNotos kept their familial relationship with American Pride a secret from the company they were defrauding.
However, “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 the company they were stealing from," much to the chagrin of Eugene DiNoto, who reportedly chastised him for being sloppy.
Robert DiNoto faces up to 20 years in prison and will be required to pay $257,181 in restitution when he is sentenced in March 2023.
Eugene Andrew DiNoto, 51, of Bel Air, 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.
His sentencing is pending.
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