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Pennsylvania Man Sentenced to Prison for DBE Fraud Scheme

On November 6, Stamatios “Tom” Kousisis was sentenced in U.S. District Court, Philadelphia, Pennsylvania, to 70 months' imprisonment, 36 months' supervised release, and ordered to pay $18,600 in fines and fees for his role in a multi-million 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 created a scheme to defraud the Pennsylvania Department of Transportation (PennDOT) DBE Program. The scheme related to the federally funded Girard Point Bridge and 30th Street Station projects in Philadelphia and involved an Alpha-Liberty joint venture between Alpha of Baltimore, Maryland, and Liberty of Youngstown, Ohio, two bridge-painting contractors, as well as Markias, Inc., a now-defunct DBE based in New Jersey, owned by Joyce Abrams.
Kousisis concocted a scheme to obtain and keep these two lucrative federally funded contracts, which totaled over $120 million. The contracts required a qualified DBE to provide painting supplies. Kousisis and Alpha had used Markias as a pass-through and that Markias did not perform a commercially useful function as required by DOT regulations. Instead, Kousisis and Alpha ordered materials from non-DBE suppliers and paid Markias a small fee to provide phony invoices that falsely represented it had provided the materials.
Kousisis and Alpha also illicitly funneled, through the Philadelphia projects, millions of dollars in materials ordered 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 falsely made it appear that supplies delivered to and used on these out-of-state projects had gone to the Philadelphia bridges. The scheme caused PennDOT to credit the contractors 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 FHWA and PennDOT.