Billings Scrap Metal Swindler Sentenced to 4 Years in Federal Prison

A Billings scrap metal dealer is headed to federal prison after collecting payment for scrap metal he never fully paid for. Chad Miller Costello, 36, was sentenced today to four years behind bars, three years of supervised release, a $50,000 fine, and $300 in assessment fees, Acting U.S. Attorney Mark Steger Smith announced.

Chad Miller Costello Guilty Plea and Federal Sentencing Details

Costello pleaded guilty in May 2025 to one count of wire fraud, one count of money laundering, and one count of filing a false tax return. U.S. District Judge Susan P. Watters handled sentencing.

How the Billings Scrap Metal Fraud Scheme Operated

Court documents lay out how the scheme worked between 2018 and 2023. Costello would approach businesses around the country and offer premium prices for their scrap metal. Once it came time to actually pay, he handed over only part of what he owed, or nothing, and told sellers the rest would come later. He collected the material anyway, turned around, sold it to recyclers, and then pocketed the money himself.

Sellers who chased him down for payment got excuses at first, then silence. Rather than settle up, Costello shut down the business and reopened under a new name, repeating the same pitch to a fresh set of customers. Prosecutors say he operated as M&M Recycling, Industrial Surplus Buying, A-1 Surplus, and ABC Iron & Metal throughout the scheme.

Arizona Scrap Metal Company Defrauded of Millions in Coolidge Deal

In October 2022, Costello paid a company in Coolidge, Arizona, $150,000 up front for scrap metal, then sold that material to a recycler for more than $1 million. The Arizona seller never received the remaining balance owed to him.

IRS Investigation Exposes False Tax Returns and Unreported Income

Separately, Costello filed a false tax return in 2020 that reported a fraction of the income his scrap metal sales actually generated.

IRS Criminal Investigation and Federal Prosecution of Billings Case

Assistant U.S. Attorney Colin Rubich prosecuted the case, which was investigated by IRS Criminal Investigation.

Get our free mobile app

DOJ National Fraud Enforcement Division Targets Financial Crimes

The case comes about three months after the Department of Justice launched the National Fraud Enforcement Division on April 7, a unit dedicated to pursuing fraud cases nationwide. The division's work ties into President Trump's Task Force to Eliminate Fraud, a government-wide initiative led by Vice President J.D. Vance targeting fraud, waste, and abuse in federal benefit programs.