A Bel Air man was sentenced to 11 years in federal prison for a $29 million kickback scheme, defrauding his longtime employer, Company 1, a family-owned global business with manufacturing facilities in Belcamp and Abingdon.

The U.S. Attorney’s Office, District of Maryland, announced the sentence in a news release Monday.

Eugene DiNoto, 54 of Bel Air, was sentenced to 70 months for conspiracy to commit wire fraud and engaging in an illegal monetary transaction, and 64 months for filing a false tax return.

In 2012, DiNoto and another employee, Elliott Kleinman, began fraudulent billing schemes, taking advantage of their management positions to receive illegal kickbacks from various vendors who worked with Company 1, according to the news release.

DiNoto and Kleinman entered an arrangement with the owner of Tunnel Barrel & Drum Co., Inc. in New Jersey and Hartford Fibre Drum, Inc., which did business with Company 1, that allowed the companies to continue selling drums to Company 1 if he agreed to falsely invoice the company for more drums than they sold. The owner agreed, splitting the extra money earned with DiNoto and Kleinman.

From January 2012 to January 2020, DiNoto was in contact with TBD’s owner once per week to discuss the type and number of drums that were being directly sent to Company 1 and the additional number of drums that were paid for but not delivered. Once the invoices were created for both orders, DiNoto would approve them and send them to Company 1’s headquarters for payment, according to the news release.

The owner of TBD and Hartford paid the kickbacks to DiNoto and Kleinman by check, so the payments looked like they were going to drum wholesalers and therefore would be deductibles as a cost of goods on tax returns, according to the release.

Over the eight years, DiNoto invoiced Company 1 a total of $20,300,757, according to the news release. TBD and Hartford kept half of the money with the remaining amount going to DiNoto and Kleinman. DiNoto’s share totaled roughly $7,071,106.

During the same time frame, DiNoto also used other drum vendors to defraud his employer, the attorney’s office said. Across all the vendors, DiNoto submitted and approved invoices totaling about $9.2 million, resulting in Company 1 losing about $29.4 million.

Kleinman was sentenced to 42 months with three years of supervised release and the owner of TBD and Hartford was sentenced to time served and 12 months of supervised release. Both were ordered to pay over $19 million in restitution.

In addition to 11 years in prison, DiNoto was given three years of supervised release.

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