Michigan Recycler Agrees to Plead Guilty To Defrauding Suppliers

The United States Department of Justice announced that Sturgis Iron & Metal Co. Inc. agreed to plead guilty to mail fraud in connection with a scheme to defraud nine of its scrap metal suppliers.

Under the plea agreement, which is subject to court approval, Sturgis Iron & Metal has agreed to pay a $206,000 criminal fine and to pay an additional $59,000 in restitution to its victims.

The mail fraud charge against Sturgis Iron & Metal, a Michigan corporation with seven facilities throughout Michigan and Indiana, was filed in U.S. District Court in South Bend, Indiana. Sturgis Iron & Metal is charged with shortweighing.

The shortweighing involved the company’s South Bend, Ind., facility and the headquarters in Sturgis, Mich., between 1995 and 2000.

According to the charge, this scheme involved reprinting tickets generated by the scales Sturgis used to weigh scrap metal. The scales weighed accurately, but Sturgis Iron & Metal employees replaced the accurate tickets with ones they reprinted to reflect lower weights. Sturgis Iron & Metal then mailed the reprinted tickets, and checks that were based on the lower weights, to its suppliers.

The charge resulted from the Antitrust Division’s ongoing investigation of the scrap metal industry being conducted by its Cleveland Field Office, with assistance from the U.S. Attorney’s Office in South Bend.