Georgia Tech Procurement Assistance Center

  • Home
  • About Us
  • Training
    • Class Registration
    • On-demand Training
    • GTPAC COVID-19 Resource Page
    • Cybersecurity
    • Veterans Verification Video
    • GTPAC Community
    • Other Training Audio & Video
  • Useful Links
  • Team Directory
    • Albany Counselor
    • Atlanta Counselors
    • Augusta Counselor
    • Carrollton Counselor
    • Columbus Counselor
    • Gainesville Counselor
    • Savannah Counselor
    • Warner Robins Counselor
  • Directions
    • Atlanta – Training Facility
    • Atlanta – Office
    • Albany
    • Augusta
    • Carrollton
    • Columbus
    • Gainesville
    • Savannah
    • Warner Robins
  • COVID-19
  • New Client Application
  • Contact Us

Two companies and individuals indicted for exploiting disadvantaged business program

April 13, 2018 By Andrew Smith

Stamatios “Tom” Kousisis of Pennsylvania and Emanouel “Manny” Frangos of Ohio, along with Alpha Painting & Construction Co., Inc. of Baltimore, Maryland, and Liberty Maintenance, Inc. of Youngstown, Ohio were charged last week with conspiracy to commit wire fraud, wire fraud, and making false statements in a scheme involving the U.S. Dept. of Transportation’s Disadvantaged Business Program (DBE) in connection with Pennsylvania’s federally-funded Girard Point Bridge project and the federally-funded 30th Street Station.

Kousisis is the Project Manager of Alpha and Frangos is an owner of Liberty Maintenance, which are both bridge painting contractors, although neither is a certified DBE in Pennsylvania.  The alleged scheme involved Alpha-Liberty JV, a joint venture between defendants Liberty Maintenance and Alpha Painting, and Markias, Inc., a now-defunct certified DBE.

In September 2009, PENNDOT awarded a contract for approximately $70.3M to a triventure that included the Alpha-Liberty JV to perform structural steel painting and repairs, and concrete repairs, on the Girard Point Bridge in Philadelphia.  As part of that award, the triventure made a commitment to PENNDOT to subcontract approximately $4.7M in DBE work to Markias to supply materials to be used in performing the contract.  Under governing law, the Alpha-Liberty joint venture was only entitled to credit for work performed by a DBE that was performing a commercially useful function.  Instead, according to the indictment, the Alpha-Liberty JV and Kousisis ordered materials needed for their work on the Girard Point Project directly from suppliers that were not DBEs, and used Markias as a mere pass-through or front, to make it falsely appear that disadvantaged business enterprise requirements had been met on the Girard Point Project when those requirements had in fact not been met.  Markias did not perform a commercially useful function.

In December 2010, PENNDOT awarded a contract for approximately $50.8 million to a joint venture of two companies referred to in the indictment as Company C and Company F, to perform structural steel painting and repairs and roadway reconstruction beneath and around AMTRAK’s 30th Street Train Station in Philadelphia.  Company C and Company F entered into a subcontract, for approximately $15 million, for the Alpha-Liberty JV to perform the structural steel painting beneath 30th Street Station.  As part of the bid process, Company C and Company F committed to subcontract approximately $1.7M in Disadvantaged Business work to Markias to supply paint materials for the 30th Street Project.  Instead, according to the indictment, the Alpha-Liberty JV and Kousisis ordered materials needed for their work on the 30th Station Project directly from suppliers that were not DBEs, and used Markias as a mere pass-through or front, to make it falsely appear that the DBE requirements had been met on the 30th Station Project when those requirements had in fact not been met.  Markias did not perform a commercially useful function.

In addition, the indictment alleges that the Alpha-Liberty JV and Kousisis, and Frangos ordered materials to be delivered to and used on out-of-state projects while directing that the purchase invoices be sent to Markias in New Jersey.  Then, allegedly at the direction of Alpha-Liberty JV and Kousisis, and Frangos, Markias issued invoices that made it falsely appear that those supplies had been used on the Girard Point and 30th Street Projects in Pennsylvania.  Alpha-Liberty JV and Kousisis, and Frangos allegedly caused Company C to falsely report to PENNDOT that the supplies delivered to and used on the out-of-state projects qualified for DBE credit in Pennsylvania when those purchases did not so qualify.  PENNDOT awarded approximately $3.26 million in DBE credit to for the Girard Point Project and approximately $1.275 million in DBE credit for the 30th Street Station Project based on DBE work supposedly performed by a disadvantaged business (Markias). Alpha-Liberty JV paid Markias 2.25% of the face value of the invoices processed by Markias allegedly to act as a pass-through.

If convicted the defendants face a statutory maximum sentence of 170 years in prison, a possible fine, supervised release, and a $1,600 special assessment.

The case was investigated by the U.S. Department of Transportation Office of Inspector General, the FBI, the Department of Labor Office of Inspector General, and Amtrak Office of Inspector General.

An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

Source: https://www.justice.gov/usao-edpa/pr/charges-allege-two-individuals-and-their-companies-exploited-usdot-disadvantaged

Filed Under: Contracting News Tagged With: abuse, Amtrak, commercially useful function, DBE, DOJ, false statements, FBI, fraud, front, indictment, Justice Dept., USDOT, wire fraud

Recent Posts

  • DLA hosting event March 10th with special emphasis on Women-Owned Small Businesses
  • Navy Office of Small Business Programs holding three events in March
  • SBA hosting conversations with contracting officers forum Feb. 25th
  • Final rule, formal training on CMMC could hit this summer
  • Non-compete clauses in government contracting: a case study in enforceability

Popular Topics

8(a) abuse Army bid protest budget budget cuts certification construction contract awards contracting opportunities cybersecurity DoD DOJ False Claims Act FAR federal contracting federal contracts fraud GAO Georgia Tech government contracting government contract training government trends GSA GSA Schedule GTPAC HUBZone innovation IT Justice Dept. marketing NDAA OMB SBA SDVOSB set-aside small business small business goals spending subcontracting technology VA veteran owned business VOSB wosb

Contracting News

Final rule, formal training on CMMC could hit this summer

COFC: “Rule of two” must be analyzed before “any” acquisition

DOD’s cybersecurity certification requirements to appear in DHS contracts

Congressional Research Service publishes updated report on SBA’s 8(a) program

Congressional Research Service publishes new report on SBA’s HUBZone program

Read More

Contracting Tips

Non-compete clauses in government contracting: a case study in enforceability

NDAA for fiscal year 2021 includes numerous provisions impacting government contractors

Beware of the automated email response

Complying with the government’s restrictions on foreign telecommunications equipment

Construction claims in the COVID era: lessons learned and best practices

Read More

GTPAC News

DLA hosting event March 10th with special emphasis on Women-Owned Small Businesses

Navy Office of Small Business Programs holding three events in March

SBA hosting conversations with contracting officers forum Feb. 25th

USACE seeks vaccination center construction support

GTPAC updates cybersecurity resource page to include CMMC guidance

Read More

Georgia Tech News

Collective worm and robot “blobs” protect individuals, swarm together

The Partnership for Inclusive Innovation is now accepting applications for pilot programs

Georgia Tech will help manage DOE’s Savannah River National Laboratory

Dr. Abdallah testifies on U.S. competitiveness, research, STEM pipeline at Congressional hearing

Georgia Tech’s Technology Square Phase III to include George Tower

Read More

  • SAM.gov registration is free, and help with SAM is free, too
APTAC RSS Twitter GTPAC - 30th Year of Service

Copyright © 2021 · Georgia Tech - Enterprise Innovation Institute