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PA Man Sentenced in DBE Fraud Case

Wednesday, November 27, 2019

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Earlier this month, Stamatios “Tom” Kousisis and his employer, Alpha Painting and Construction, Inc. (Alpha) (Edgewood, Maryland), were sentenced for wire fraud and other related charges.

The Eastern District of Pennsylvania’s U.S. Attorney’s Office reports that the verdict was concluded after a 19-day-long jury trial in August 2018.

Crimes Committed

According to the Office of Inspector General and the U.S. Department of Transportation, Kousisis and Alpha created a scheme that defrauded Pennsylvania’s Department of Transportation’s Disadvantaged Business Enterprise program.

A DBE is a business or firm where at least 51% is owned by one or more individuals who are members of disadvantaged groups, such as: women, racial minorities and disabled persons.

DNY59 / Getty Images

Earlier this month, Stamatios “Tom” Kousisis and his employer, Alpha Painting and Construction, Inc. (Alpha) (Edgewood, Maryland), were sentenced for wire fraud and other related charges.

In working on the repair and renovation of Philadelphia’s Girard Point Bridge and Amtrak’s 30th Street Train Station—an over $120 million contract—Alpha, in a joint venture, agreed to PennDOT’s contract, stating that the company would use a legitimate, certified DBE to provide a minimum of 6% of the value of the work.

However, reports indicate that the defendant used Markias, Inc.—a now-defunct DBE based in New Jersey and owned by African American Joyce Abrams—as a front to meet the DBE requirements.

The Department of Justice reported that Markias provided false invoices that claimed it had provided work on the Philadelphia-based projects, however, no services of economic value were carried out.

Additionally, the defendant issued payments to Markias for materials used on out-of-state projects including the Tobin Bridge in Boston, Massachusetts; the Amtrak Thames River Bridge in Groton, Connecticut; and the Mississippi River Bridge in East Baton Rouge, Louisiana. The resulting invoices were then submitted to PennDOT under false claims that the materials had actually been purchased for the bridge and Amtrak projects.

“DBE rules exist to level the playing field for legitimate disadvantaged businesses, not for defendants like Kousisis to cynically manipulate to line their own pockets,” said U.S. Attorney McSwain.

“Kousisis demonstrated a blatant disrespect for the law by defrauding the government contracting process, and therefore taxpayers, for his own benefit. We will continue to work with our law enforcement partners at all levels to uphold the rule of law and ensure a fair playing field for all.”

The scheme resulted in PennDOT crediting the contractors with more then $4.5 million in fraudulent DBE work.

Sentencing

Kousisis was sentenced to 70 months’ imprisonment, 36 months’ supervised release and a $17,500 fine by U.S. District Judge Wendy Beetlestone.

“The sentencing handed down in this case should serve as notice that unscrupulous, fraudulent activity within U.S. Department of Transportation DBE programs will be met with the full force of the criminal justice system,” said Douglas Shoemaker, Regional Special Agent-in-Charge of the DOT, Office of Inspector General.

“Working with our law enforcement and prosecutorial partners, we will continue to root out and hold individuals and businesses accountable when they misuse Federal funding program opportunities for personal gain.”

The case was investigated by the U.S. Department of Transportation – Office of Inspector General, the U.S. Department of Labor – Office of Inspector General, the Federal Bureau of Investigation and the Amtrak – Office of Inspector General, and is being prosecuted by Assistant United States Attorneys Paul G. Shapiro and David E. Troyer.

 

Editor's Note: This article was edited at 9 a.m. on Nov. 26. Please see our retraction here.

   

Tagged categories: Criminal acts; Department of Transportation (DOT); Ethics; Fraud; Laws and litigation; Lawsuits; NA; North America; Program/Project Management

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