Scrap metal business owner charged with $14 million theft

SEATTLE (Scrap Monster): The owner of Wisconsin-based Fox Valley Iron, Metal and Auto Salvage has been charged with scrap metal theft and racketeering. In a six-count indictment filed in the Fond du Lac County Superior Court, Sterling W. Kienbaum has been accused of organizing a scheme to steal more than $14 million over a period of seven years from Sadoff Iron & Metal, a scrap metal company located in Fond du Lac, Wisconsin. Kienbaum was ordered by the judge to be held on $1 million cash bond.

According to the complaint, Kienbaum was involved in shipment of scrap metal loads containing excess amount of dirt to Sadoff Iron & Metal. The truck driver of Fox Valley and a crane operator at Sadoff was allegedly involved in filling dirt in shipments to increase the weight of shipments so as to receive larger payment. The criminal complaint states that Kienbaum paid Daniel Christianson, the truck driver, to take scrap vehicles loaded with dirt to Sadoff’s. Christianson would pay Donald Krueger, Sadoff’s crane operator to accept the vehicles which weighed more than the permitted limit. Kienbaum would later receive money from Sadoff’s for the full load of material including dirt.

Following complaints, the Fond du Lac Police Department had started investigating into the incident. The investigation, led by Detective Steve Kaufman and Detective Nick Hahn, obtained surveillance photos provided by Brad Lasky, Sadoff’s owner. After reviewing the footage it was found that Christianson had made cash payment to Krueger, while unloading the truck. The video footage showed scenes of Krueger counting the cash handed over by Christianson.

The operation was interrupted by the detectives on May 22, 2015. Upon interrogation, Krueger acknowledged that he had received cash payments from Christianson for accepting loads of scrap automobiles that were in excess of what they should have been, according to company rules from Sadoff’s. Further, he admitted that he has known Christianson for more than 10 years. Further, he has been receiving payments from Christianson on a weekly and monthly basis. On further questioning, he admitted that he has been receiving payoffs from Fox Valley Iron & Metal for nearly 18 years.

This act has resulted in Sadoff’s overpaying to Fox Valley. The estimated damages for the company, as per the calculations of a forensic accountant exceeded $14 million. The total year-wise loss was calculated as : $ 740,325 in 2009, $2,164,964 in 2010, $3,465,950 in 2011, $2,905,528 in 2012, $2,732,040 in 2013, $2,166,421 in 2014 and $149,267 in 2015.

Donald Krueger and Daniel Christianson have both been convicted of felony theft for a portion of their role in the theft. The next court hearing is scheduled at 1.30 pm March 16. If convicted by the court, fifty-two-year-old Kienbaum could get up to 65 years of imprisonment.

Meantime, messages for Kienbaum and his attorney remained unanswered.

Fox Valley Iron & Metal is a family owned and operated company that has been in business for over 20 years. Currently, it has 5 affiliated Fox Valley Iron & Metal locations spanning from Wisconsin Rapids to Milwaukee.