Kansas City man embezzled more than $388,000 in scrap metal scheme
A Kansas City man pleaded guilty Wednesday to embezzling more than $388,000 in a scrap metal scheme.
Russell R. Fotovich, 47, pleaded guilty in federal court to participating in a wire fraud conspiracy and filing a false tax return, the Office of the U.S. Attorney for the Western District of Missouri said.
Fotovich worked as a facilities engineer at DST Systems, Inc. When the facility underwent renovations from 2011 to 2016, copper wire and other metals were removed and redeemed with a local scrap dealer.
Fotovich and a co-conspirator conducted 137 of the 138 scrap redemptions. The pair asked the dealer to write checks to them personally rather than to DST, and had the redemption tickets split to conceal the total amount of redeemed scrap, federal prosecutors said.
The pair also requested DST purchase an industrial wire-stripping machine. The machine cost about $5,000 and drew in higher redemption values. After the machine was bought in early 2014, the thefts increased more than tenfold.
In his plea, Fotovich admitted to conspiring with others from April 2011 to June 2016. He also pleaded guilty to filing a false tax return because he didn’t declare the embezzled income on federal tax returns.
Fotovich agreed to forfeit more than $138,000 to the government. He will also have to pay restitution to DST, the Internal Revenue Service and the Missouri Department of Revenue. He is subject to up to eight years in federal prison without parole.
