A Chicago scrap metal dealer has agreed to plead guilty to federal tax and currency transaction charges in a scheme involving checks issued to people who didn’t exist and cash paid to employees, authorities said.
Tri State Metal, of Chicago’s West Town neighborhood, negotiated numerous checks for less than $10,000 to avoid reporting them to the Internal Revenue Service, according to the criminal complaint filed in federal court Tuesday in Chicago. The company would then pay vendors and employees with cash.
Tri State paid about 15 scrap metal vendors more than $6.17 million in cash over a four-year period beginning in September 2008, according to the complaint. Tri State also accepted checks made to fictitious people totaling more than $2.92 million. The company would cash those checks and use the money to pay employee wages totaling $1.47 million, according to the complaint.
The tax charge carries a maximum penalty of five years’ probation and a $500,000 fine.
Authorities said Tri State could forfeit $1.9 million seized from a company bank account and $118,420 in cash taken from its offices at 1745 W. Fulton St.
None of the individuals involved were charged. The former owner and president of Tri State, who also benefited from the scheme, is deceased, the U.S. attorney’s office said.
A Tri State official did not return a call seeking comment.
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