Developer pleads guilty in wire fraud case, leaves projects in Hicksville, Commack

Huntington real estate developer Robert A. DiNoto pleaded guilty this month in Maryland to federal charges in a fraudulent billing scheme and has withdrawn from at least two local housing projects.

DiNoto, through a spokesman, said he has divested from projects that were seeking tax breaks through the Industrial Development Agency in Nassau and Suffolk counties.

In a plea agreement filed Nov. 2 in the U.S. District Court in Maryland, DiNoto, 48, pleaded guilty to conspiracy to commit wire fraud for submitting — between December 2016 and August 2019 — fraudulent bills totaling $257,181 for “nonexistent” drum containers to a company his older brother, Eugene, worked for.

DiNoto agreed to pay $257,181 in restitution to the company. He faces up to 20 years in prison when he is sentenced next year.

DiNoto admitted in the plea agreement that no later than 2014 he entered into a fraudulent billing scheme to submit “false invoices for undelivered drums” with his brother, who worked for Citrus and Allied Essences Ltd., at the company’s Belcamp, Maryland, location. The company also has locations in Floral Park, California and Mexico, according to its website. Citrus and Allied Essences and an affiliate produce flavorings and seasonings for the food industry that are shipped in fiber and metal drum containers.

Robert DiNoto had approached his brother about starting his own drum vending company and subsequently learned from him that drum vendors were defrauding Citrus and Allied Essences, according to the plea agreement.

Read the plea agreements

Eugene DiNoto oversaw the purchase of the drums at one of the company’s manufacturing facilities and had the authority to authorize payments, according to the plea agreement.

According to his plea agreement, Robert DiNoto used his company Sandpiper Properties Inc., under the name American Pride Distributors at his Woodbury office on Jericho Turnpike, to participate in the fraudulent billing scheme with his brother from 2014 to 2019.

To establish a legitimate pattern of drum sales to Citrus and Allied Essences, Robert DiNoto, who didn’t manufacture or recondition drums, purchased them from vendors and delivered them to the company, according to the plea agreement.

“To conceal the fraudulent invoices the Defendant [Robert DiNoto] would intermittently send the bogus invoices before and after sending legitimate ones,” according to the plea agreement. He admitted in the plea agreement that he used the proceeds to pay for personal expenses, including his American Express bill.

“The statements of fact make it clear that Eugene recruited different drum companies to employ his false billing scheme at different times and in slightly different ways,” Marcy Lubin, spokeswoman for the U.S. Attorney’s Office in Maryland, wrote in an email. “There is nothing in the record alleging that the individual drum vendors knew of each other’s criminal involvement with Eugene DiNoto or in any way participated with each other to defraud the victim.”

In April, Eugene DiNoto pleaded guilty to conspiracy to commit wire fraud, engaging in an illegal monetary transaction and tax evasion. He admitted that he had submitted and approved false invoices to Citrus and Allied Essences Ltd. for a total of $29.4 million, according to his plea agreement.  

A person answering the phone at Citrus and Allied Essences’ Maryland location declined to comment Thursday.

Robert DiNoto has long been a fixture on the Long Island real estate development scene under the name The DiNoto Group and Questus Capital Management LLC. The DiNoto Group invested in Glen Cove Cinemas in 2016 and bought the Plaza West building in Freeport in 2017.

Along with partner Paul Posillico, DiNoto was seeking to construct a $69.8 million mixed-use apartment building in Hicksville near the Long Island Rail Road station called Fieldstone at North Broadway, and a Fieldstone-branded development in Commack. 

“On November 1, Mr. DiNoto relinquished all of ownership, interest, and control in all pending development projects,” a spokesman wrote in an email Wednesday. “Mr. DiNoto no longer has any control in any pending or developing projects and he has transferred all of his interests in such projects.”

The spokesman said Thursday that DiNoto’s divestments were of projects that had not yet been built.

Posillico, through a spokesman, declined to comment Thursday.

Richard Kessel, chairman of the Nassau County IDA, said Wednesday that the Fieldstone project in Hicksville hadn’t received final IDA approval.

“We have concerns about it,” Kessel said. “We’re going to take a look at this thoroughly before we make any further decisions.”

Anthony Catapano, executive director of the Suffolk County IDA, wrote in a text message Wednesday that, according to IDA counsel, “a conviction would be a violation of the IDA documents and the individual would have to be removed and divested of interest in the project.”

CORRECTION: Robert DiNoto’s guilty plea is not part of a $29.4 million wire fraud scheme involving his brother, Eugene. A previous version of this story was incorrect.