Fraudulent activities lead two auto salvage dealers to close

State regulators in Wisconsin plan to shut down Fox Valley Iron Metal & Auto Salvage, Oshkosh, Wisconsin, and Gibson Iron Metal and Auto, Neenah, Wisconsin. According to the Oshkosh Northwestern newspaper, state regulators say these two auto salvage dealers conducted fraudulent activities, three months after the owner of both businesses, Sterling W. Kienbaum of Oshkosh, was sentenced to prison for racketeering.

The Wisconsin Department of Transportation, which regulates and licenses auto dealers, told both companies, which employ about 50 people, that they must stop buying scrap vehicles immediately and sell, process or recycle any vehicles and parts they already own by the end of this year, the Oshkosh Northwestern reports. 

Kienbaum was sentenced in August in Fond du Lac County Circuit Court to 11 years of initial confinement and three years of extended supervision. He was initially convicted of racketeering and felony theft Jan. 11, 2018. Prior to sentencing, he prepaid $6 million in restitution for the racketeering scheme. 

According to court documents, Kienbaum had loaded scrap vehicles with dirt to increase the weight of the scrap metal and paid an employee to hand them off to Sadoff Iron & Metal, Fond du Lac, Wisconsin. The Oshkosh Northwestern reports that Sadoff Iron & Metal had paid Fox Valley a total of more than $14.3 million more than what they were worth over the course of a six-year period from 2009 to 2015.