DOJ Announces Settlement with Scrap Dealers

Two Cleveland scrap metal companies, their owner, and an employee pleaded guilty March 2 to conspiring to allocate suppliers and rig bids for scrap metal, the Department of Justice announced. One of the companies also pleaded guilty to wire fraud. All of the defendants had been indicted previously, but now have agreed to plead guilty to all of the charges in the indictment and to cooperate with the ongoing investigation.

The companies, M. Weingold & Co. and Harry Rock & Associates Inc., their owner and M. Weingold & Co. president, Jack Weingold and an employee of M. Weingold & Co., Loren Margolis, pleaded guilty in U.S. District Court in Cleveland to a three-count indictment filed on January 15, 2004.

The indictment charged all of the defendants with participating in two separate conspiracies in Northeast Ohio-one beginning at least as early as December 1993 and continuing at least until October 1999, and the other beginning at least as early as December 1993 and continuing at least until November 1999-to allocate suppliers and rig bids for scrap metal. Additionally, Harry Rock & Associates Inc. was charged with wire fraud in connection with a scheme to defraud a supplier of scrap metal by attempting to rig a bid with a competitor in January 2000.

The plea agreement with Jack Weingold, M. Weingold & Co., and Harry Rock & Associates Inc. recommends that Jack Weingold be imprisoned for 13 months and pay a $700,000 criminal fine. M. Weingold & Co. and Harry Rock & Associates Inc. have agreed to pay criminal fines of $5.65 million each, for a total of $11.3 million.

The plea agreement with Loren Margolis recommends that he pay $700,000 and serve a term of imprisonment between 10 and 12 months. All of the plea agreements are subject to court approval.