Owner of Staten Island-based Construction Company Sentenced for Her Role in a DBE Scheme
On May 17, 2013, Madeline Pepe, owner of Staten Island-based MS Construction Corporation (MSC), was sentenced in U.S. District Court, Manhattan, New York, to two years probation, a $50,000 forfeiture, and a $300 special assessment.
On March 5, 2012, Pepe pleaded guilty to conspiracy to commit mail and wire fraud charges. Between approximately 1994 and March 2011, Pepe participated in a conspiracy to use MSC as a front disadvantaged business enterprise (DBE) for several non-minority firms in order to give the appearance of DBE participation on multiple FHWA-funded New York State DOT and New York City DOT projects, and an FAA-funded Port Authority of NY & NJ project. In reality, MSC did not perform a commercially-useful function and the work was performed by the non-minority firms. The amount of the affected subcontracts totals approximately $2 million.
We are investigating this case jointly with the USDOL-OIG, the Port Authority of NY & NJ-OIG, and the New York City Dept. of Investigation.