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New York Lawyer Sentenced For Scrap Metal Shipping Fraud

New York Lawyer Sentenced For Scrap Metal Shipping Fraud

The U.S. Justice Department said Richard Luthmann, an attorney located on Staten Island, N.Y., was sentenced by a federal court Sept. 9 to four years in jail for his role in conspiring to commit wire fraud and extortion in a scheme involving scrap metal shipments.

Luthmann also was ordered by Judge Jack B. Weinstein of the District Court for Eastern New York to pay $500,000 in restitution and $130,000 in forfeiture. 

The 39-year-old lawyer pleaded guilty to the charges on March 18. 

According to the Justice Department, Luthmann and his co-conspirators formed "multiple shell companies" during the summer of 2015 to sell scrap metal to customers in the U.S. and overseas. They convinced these customers to pay them in advance for the scrap metal and then failed to deliver the shipments. 

"After an aggrieved customer threatened to report Luthmann and his co-conspirators to the police, the conspirators changed tactics and began shipping worthless filler materials, including concrete and road barriers to customers who had contracted to buy valuable copper and other scrap metal," the Justice Department said.

Within several months of initiating the scheme, the conspirators generated about $500,000 in revenue, which Luthmann then concealed by registering the shell companies with the New York Department of State. He also hired a blind person who was living on public assistance to serve as "nominal president" of one of these shell companies. The proceeds from the illegal sales were split among the co-conspirators at Luthmann's law office.

According to the Justice Department, Luthmann allegedly threatened a former scrap metal customer at his law office with a handgun, demanding a $10,000 payment. 

The Staten Island Advance reported that Luthmann was arrested in December 2017 and spent the past 20 months in jail. 

The case was investigated by the Commerce Department Bureau of Industry and Security's Office of Export Enforcement and the FBI in New York, along with assistance from the Department of Homeland Security, Homeland Security Investigations, the New York City Police Department and the Social Security Administration.

"Engaging in export fraud scams and falsifying export records are matters we take seriously," said Jonathan Carson, BIS special agent-in-charge for the Office of Export Enforcement in New York, in a statement. "We will continue to pursue violators who jeopardize fair and secure trade."

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