Wisconsin scrap company owner charged with theft

Sterling Kienbaum, the owner of Wisconsin-based Fox Valley Iron and Metal, has been charged with theft against Sadoff Iron & Metal, a scrap metal recycling company located in Fond Du Lac, Wisconsin.

In a six-count indictment, filed in the Fond du Lac County Superior Court, Deputy District Attorney Dennis Krueger has charged that between May 2008 and May 2015, Kienbaum shipped Sadoff Iron loads of scrap metal that contained excess dirt, resulting in Sadoff paying out an additional $14 million than the value of the metal. According to the indictment, Fox Valley Iron and Metal, along with employees from Sadoff and Fox Valley Iron, colluded to fill dirt into shipments to increase the weight of the deliveries and to receive a larger payment than was warranted.

To facilitate the theft, the indictment alleges that a driver for Fox Valley worked in conjunction with a crane operator at Sadoff to mask the theft.

The estimated damages for the company were:

• $740,325 in 2009; 
• $2.16 million in 2010; 
• $3.47 million in 2011; 
• $2.9 million in 2012; 
• $2.73 million in 2013; 
• $2,17 million in 2014; and
• $149,267 in 2015; 

Combined, Fox Valley Iron and Metal was overpaid $14.32 million.

If convicted of racketeering, Kienbaum could be fined up to $50,000 or imprisoned not more than 15 years or both.

According to local press reports, the truck driver and crane operator already have been convicted for their roles in the scheme. Both were sentenced to probation and ordered to pay restitution and fines. A one-year jail sentence also was ordered for the truck driver, to be served if he violates his probation.

“We are very appreciative of law enforcement’s excellent work and diligence in investigating this matter, and we are pleased that those efforts have resulted in Merle Kienbaum’s arrest,” says Mark Lasky, CEO of Sadoff Iron and Metal. 

“We look forward to the criminal legal process running its course, which we are confident will establish, beyond any reasonable doubt, Merle Kienbaum’s guilt for the scheme to defraud our company," Lasky adds. 

"In addition to the criminal charges, we are pursuing, through civil litigation, recovery of the damages the company suffered,” he says.