Pennsylvania Man Sentenced to Prison for DBE Fraud Scheme
On November 6, 2019, Stamatios “Tom” Kousisis was sentenced in U.S. District Court, Philadelphia, Pennsylvania, to 70 months’ imprisonment, 36 months’ supervised release, and $18,600 in fines and fees for his role in a multimillion dollar Disadvantaged Business Enterprise (DBE) fraud scheme. In August 2018, Kousisis, and his employer, Alpha Painting and Construction, Inc. (Alpha), were found guilty of wire fraud and related charges after a 19-day jury trial.
Kousisis and Alpha—with Emanouel “Manny” Frangos and his company, Liberty Maintenance Inc. (Liberty)—created a scheme to defraud the Pennsylvania Department of Transportation (PennDOT) DBE program. The scheme targeted two federally funded projects in Philadelphia—Girard Point Bridge and 30th Street Station. It involved a joint venture between Alpha, in Baltimore, Maryland, and Liberty, in Youngstown, Ohio, two bridge-painting contractors. Also involved was Markias, Inc., a now-defunct DBE based in New Jersey, owned by Joyce Abrams.
Kousisis concocted a scheme to obtain and keep the two lucrative federally funded contracts, which totaled over $120 million. The contracts required a qualified DBE to provide painting supplies. Kousisis and Alpha used Markias, as a pass-through, but Markias did not perform a commercially useful function, as DOT regulations require. Instead, Kousisis and Alpha ordered materials from non-DBE suppliers and paid Markias a small fee to provide invoices that falsely represented it had provided the materials.
Kousisis and Alpha also illicitly funneled, through the Philadelphia projects, millions of dollars in materials for several out-of-State projects, including the Tobin Bridge in Boston, Massachusetts; Amtrak Thames River Bridge in Groton, Connecticut; and Mississippi River Bridge in East Baton Rouge, Louisiana. Kousisis instructed Markias to issue fraudulent invoices that made it appear that supplies had been delivered to and used on the Philadelphia bridges. As a result, PennDOT credited the contractors with more than $4.5 million in fraudulent DBE work.
DOT-OIG conducted this investigation with the FBI, DOL-OIG, and Amtrak-OIG with substantial assistance from the Federal Highway Administration and PennDOT.