From the U.S. Attorney’s Office in Baltimore:
Baltimore, Maryland – Anthony P. Urcioli, Sr., age 78, of Park Ridge, New Jersey, pleaded guilty yesterday to conspiracy to commit wire fraud and filing a false tax return.
The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; and Special Agent in Charge Darrell J. Waldon of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office.
According to his guilty plea, Urcioli is the owner and president of Tunnel, Barrel & Drum Co, Inc. (TBD), a wholesale commercial drum container seller.
As stated in his plea agreement, in 2012, Urcioli approached two employees (Employees 1 and 2) of a New York company that formulates and produces oils and extracts used in the food industry (Company 1) to purchase TBD’s drums for manufacturing in Harford County, Maryland. One of the employee’s responsibilities (Employee 1) was to review drum invoices and authorize payments to drum suppliers.
After TBD became a drum supplier to Company 1, Employee 1 proposed to Urcioli to continue selling drums to Company 1 if Urcioli agreed to fraudulently invoice Company 1 for more drums than TBD actually sold and delivered to the company. Urcioli and Employee 1 agreed to falsify invoices and split the extra funds paid to TBD from Company 1 for fabricated deliveries. Employee 1 told Urcioli he would split his portion of the funds by fifty percent with Urcioli and share twenty-five percent of the remaining funds with Employee 2. As a result of this conversation, Urcioli accepted Employee 1’s offer to pocket the extra funds or “kickbacks”.
From approximately January 2012 to January 31, 2020, Employee 1 contacted Urcioli at least once a week to discuss the number and type of drums that Employee 1 actually wanted delivered to Company 1’s Maryland facilities. During the same conversation, Employee 1 told Urcioli how many additional drums to charge Company 1 but not deliver to Company 1. After Urcioli created bogus invoices that fraudulently billed Company 1 for both delivered and undelivered drums, Employee 1 approved the invoices and sent them to Company 1’s headquarters to be paid.
Urcioli, Employee 1, and Employee 2 agreed to write the kickback checks in the names of two fraudulent companies to create the appearance of authentic wholesale drum invoices and serve as a deductible as a cost of goods on TBD’s tax returns. Additionally, in December 2013, Urcioli told Employee 1 about Hartford Fibre Drum, Inc., the other drum supply company Urcioli owned. After receiving records that proved that Hartford was a legitimate company, Employee 1 and Urcioli agreed to expand the kickback scheme to include Hartford.
Between January 2012 and January 31, 2020, Urcioli falsely invoiced Company 1 a total of $20,300,757. TBD and Hartford kept half that amount while the remaining funds were sent to Employee 1 and Employee 2. Urcioli also used his companies and their bank accounts to conceal the scheme and launder the proceeds. As a result of the scheme to defraud, Urcioli obtained approximately $10,150,378 from checks made out to TBD and Hartford.
Further, over the course of the eight-year scheme to defraud Company 1, Urcioli filed yearly corporate tax returns for TBD and Hartford that falsely stated the cost of goods sold each year. In total, from 2014 to 2020, TBD and Hartford underreported the companies’ incomes by approximately $9.05 million, resulting in a tax loss to the federal government of $2,539,633.
Urcioli faces a maximum sentence of 20 years in prison followed by five years of supervised release for conspiracy to commit wire fraud and a maximum of three years in prison followed by one year of supervised release for filing a false tax return. U.S. District Judge Lydia Kay Griggsby has not yet scheduled sentencing.
United States Attorney Erek L. Barron commended the FBI and IRS-CI for their work in the investigation. Mr. Barron thanked Assistant U.S. Attorneys Marty Clarke and Harry M. Gruber. who are prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.