Pair in $75 Million Oil Scam to Be Sentenced in Dec.

This story appears in the Nov. 22 print edition of Transport Topics.

A federal judge is scheduled next month to sentence two participants in a conspiracy by two New York City-area tank-truck firms accused of jointly skimming an estimated $75 million in heating oil from customers over a 17-year period.

Those due to be sentenced are Tonino Solimine, former CEO of T&S Trucking, and Eston Clare, former office manager of T&S.

Sentencing for the two executives, who both have entered into plea agreements, has been delayed repeatedly because of negotiations over the amount of money that would be subject to forfeiture, according to court documents.

Solimine’s attorney, Nicholas Kaizer, confirmed last week that Solimine has pleaded guilty and is scheduled for sentencing on Dec. 10.

Marc Merolesi, an attorney representing Clare, did not return a message. However, court records indicate that Clare has pleaded guilty and is scheduled for sentencing on Dec. 17.

Two other participants in the alleged skimming case, Leonard Baldari, the owner of the Mystic Tank Lines — now operating as Anchor Tank Lines — and Michael Hiller, who was Mystic’s president and chief financial officer, originally were scheduled for sentencing in April. However, the sentencing was postponed, and a new date has not been set, according to court records.

If convicted, all four men could each face maximum sentences of 30 years’ imprisonment and fines equal to twice their financial gain from their illegal enterprise.

It’s not clear whether Baldari and Hiller already have entered guilty pleas, although court documents indicate they each began plea negotiations with prosecutors as early as 2008.

The four tank truck executives were indicted in July 2007 and charged with embezzlement and money laundering.

A spokesman for the U.S. Attorney’s Office for the Eastern District of New York declined comment on the case last week.

Attorneys representing Baldari and Hiller did not return phone messages.

Mystic is currently operating as Anchor Tank Lines and Baldari said in a federal bankruptcy filing in June that he remains the sole shareholder and director of the motor carrier, which has current operating authority with the Department of Transportation.

John Maniscalco, chief executive officer of the New York Oil Heating Association, said that despite Mystic’s large imprint on the market, the indictments did not cause heating oil delivery shortages as earlier feared.

“They are huge, but as far as any work stoppage in the New York Metro area, that was uneventful,” Maniscalco told Transport Topics. “Mr. Baldari is still operating the company, but he’s under the watchful eye of the Justice Department.”

A company executive who asked not to be identified confirmed that Mystic’s name was changed to Anchor, but that the company has new management.

“The new management is trying to reestablish the company,” the executive said. “We’re just trying to make the best of what we can. We’re just trying to right the ship.”

Prior to the criminal charges and raids by federal agents in 2007, Mystic was one of the largest bulk oil transporters in the Northeast.

The indictments alleged that Baldari and Hiller, beginning as early as 1990, and Solimine and Clare, beginning as early as 2000, stole heating oil by instructing their truck drivers to hold back portions of oil from retail customers, who were then billed for a full delivery.

The carriers allegedly then sold the stolen oil to other oil retailers, primarily for cash payments, according to court documents.

The same day the indictments were unsealed, law enforcement officers executed search warrants at seven locations in New York and New Jersey, and also seized more than 34 Mystic and T&S tanker trucks.

The government has since been in the process of forfeiting up to $50 million in cash and other assets from Mystic, and up to $25 million from T&S.

Anchor filed for bankruptcy in June, but the case was dismissed in July after prosecutors complained that Baldari had been charged with a federal crime and could not seek bankruptcy protection because some of the company’s illegally obtained assets were being confiscated by the government.

Bankruptcy documents filed by Anchor listed debts totaling in the millions of dollars, including an estimated $30 million owed to the U.S. Treasury.

The company said that its business income has declined from just under $36 million in 2008 to $5.7 million during the first half of 2010.

Baldari’s attorneys said in a June 18 court filing that Anchor was still “a major part of the infrastructure and transporter for New York agencies, public utilities, hospitals, schools, airports, asphalt pavers and cement plants.”

“Anchor is the sole bulk cement carrier for John F. Kennedy Airport,” the filing said. “Anchor runs 24 hours a day, seven days a week supplying cement for the construction ongoing at JFK.”

The filing also said Anchor has been in the process of eliminating unprofitable operations and is “poised to enter into new bulk lines such as food grade products.”