group of Rhode Island metals recyclers have filed a Racketeer
Influenced and Corrupt Organizations (Rico) Act lawsuit against
Sims Metal Management Ltd.s New England division,
alleging that the company underpaid them by manipulating scale
weights and labeling nonferrous metals as cheaper material.
lawsuit was filed by Cranston-based Innercity Recycling Service
LLC, Innercity president Kenneth Serapiglia, North
Providence-based K&R Auto Salvage Inc. and Providence-based
Rhode Island Recycled Metals LLC in U.S. District Court in
Rhode Island against North Haven, Conn.-based SMM New England
Corp., which also operates in Rhode Island.
that when he left a position at a recycler in 2011, SMM
president Anthony Izzo offered him loans totaling $150,000 to
start a new business on the condition he sell material
exclusively to SMM. Serapiglia accepted and opened Innercity in
This past June, an
internal audit by Innercity revealed a 95,000-pound
discrepancy, worth $117,000, between what Innercity sold and
what SMM said it received during the first five months of
Innercity was able to
access third-party records of SMMs scale receipts, which
indicated the weights of ferrous loads were manually reduced
because they contained tires, dirt and wood.
Nonferrous loads were
allegedly mislabeled, allowing SMM to pay a lesser amount,
according to the complaint.
Rhode Island Recycled
Metals and K&R Auto also claim to have had their loads
manually recorded and adjusted by SMM workers.
couldnt be reached, and Rhode Island Recycled Metals and
Innercity declined to comment.
A spokesman for Sims
denied any wrongdoing by the company.
complaint included claims under a number of theories, it
appears at its core to be a commercial dispute that we expect
will be sorted out in the course of the litigation. We believe
that there is no merit to the claims asserted by the plaintiffs
and we fully intend to dispute each of those claims," he