A Billings man was sentenced on July 15 to four years in prison, followed by three years of supervised release, a $50,000 fine, and $300 in assessment fees for defrauding customers through a scrap metal business scheme, Acting U.S. Attorney Mark Steger Smith said.
Chad Miller Costello, 36, 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 presided over the sentencing.
According to court documents presented by the government, from 2018 to 2023 Costello operated a scrap metal business under various names that stole money from customers. The scheme involved promising businesses across the United States premium prices for their scrap metal and then failing to pay the agreed amounts after collecting and selling the material to recyclers. “When it was time to buy the scrap from customers, Costello would only pay a portion or nothing of the contract price, promising to pay later,” court documents state. He would then sell the collected scrap metal and keep all proceeds without fulfilling payment obligations.
Costello used multiple business names including M&M Recycling, Industrial Surplus Buying, A-1 Surplus, and ABC Iron & Metal. In October 2022 he paid an initial installment of $150,000 for scrap taken from a company in Coolidge, Arizona, but sold it for more than $1 million without paying the remaining balance owed. Additionally, in 2020 he filed false tax returns claiming significantly less income than what he actually earned through these sales.
Assistant U.S. Attorney Colin Rubich prosecuted the case with IRS Criminal Investigation conducting the investigation.
On April 7, the Department of Justice announced creation of its National Fraud Enforcement Division focused on investigating and prosecuting fraud against Americans as part of President Trump’s Task Force to Eliminate Fraud chaired by Vice President J.D. Vance.
The U.S. Attorney for the District of Montana is part of the Department of Justice and is appointed by the Attorney General; its offices are located in Billings as well as Great Falls, Helena and Missoula, according to the official website. The office addresses issues such as violent crime and fraud while aiming to protect citizens through ethical enforcement of federal laws.