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Bridge Painters Convicted on PA DBE Fraud

Thursday, September 13, 2018

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In late August, Stamatios “Tom” Kousisis, and his employer, Alpha Painting and Construction Inc., were convicted of conspiracy to commit and execution of wire fraud, as well as making false statements to the U.S. Department of Transportation regarding infrastructure work in Philadelphia.

Case History

In September 2009, the Pennsylvania Department of Transportation awarded a $70.3 million contract to Alpha-Liberty JV—a joint venture between Alpha, of Baltimore, Maryland, and Liberty of Youngstown, Ohio—and an unnamed contractor (Company C).

According to the U.S. DOT Office of the Inspector General, in the project, the companies were to paint steel and make repairs to the concrete on Girard Point Bridge. When the companies accepted the project, the agreement came with the stipulation that $4.7 million worth of the work would be subcontracted to DBEs, specifically the supplying of painting materials. Markias was the DBE specified.

In December 2010, PennDOT granted a $50.8 million contracted to Company X, a joint venture composed of Company C and another unnamed firm, to complete structural steel painting work and necessary roadway repairs for Amtrak’s 30th Street Station. Company X worked with Alpha-Liberty under a $15 million subcontract to do the steel painting, and committed to subcontracting Markias for $1.7 million in painting materials.

Micha? Chodyra/Getty Images 

In late August, Stamatios “Tom” Kousisis, and his employer, Alpha Painting and Construction Inc., were convicted of conspiracy to commit and execution of wire fraud, and making false statements to the Department of Transportation regarding infrastructure work in Philadelphia.

As a way to obtain and keep these two contracts—which totaled over $120 million—Kousisis used Markias as a pawn to imply that Alpha-Liberty JV had contracted with a DBE. Markias only acted as a pass-through, however, and Alpha ordered materials from non-DBE suppliers while Markias generated phony invoices that falsely accounted for the materials.

This fraud extended to funneling materials ordered for out-of-state projects, including the Tobin Bridge in Boston, Massachusetts, among others.

With all of the scheme accounted for, PennDOT charged the contractors with more than $4.5 million in fraudulent DBE work. Roughly $3.26 million went to the entities responsible for the Girard Point Bridge Project, and another $1.27 million went to those involved with the 30th Street Station project.

In February 2016, Markias owner Joyce Abrams pled guilty to conspiracy to commit wire fraud. In March of that same year, the Federal Highway Administration suspended Abrams and Markias from federal contracting.

Kousisis and Alpha, along with Emanouel “Manny” Frangos and his company Liberty, were indicted in April of this year.

Editor's note: An earlier version of the headline of this story implied the firm was from Pennsylvania; while the project in question was in Pennsylvania, the firm is based in Maryland.


Tagged categories: Criminal acts; Department of Transportation (DOT); Ethics; Government; Infrastructure; Rehabilitation/Repair

Comment from john lienert, (9/15/2018, 3:01 PM)

ha ha ha

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