The United States Supreme Court unanimously ruled on May 22 that a Philadelphia painting contractor and its project manager defrauded the Pennsylvania Department of Transportation and the United States Government, providing federal funds to two transport projects that won work by representing a disadvantaged business entity as a supplier.
The ruling confirmed a trial of the 2018 jury that sentenced Alpha Painting and Construction Co. and Statatios Kousisis, its project manager, fraud and conspiracy of wire, as well as a court ruling of appeal that supported the sentence. Kousisis and Alpha had defended Io justice that the state agency could not be a victim of fraud because it did not suffer monetary losses in the projects involved, despite the fact that DBE Alpha provider hired to provide $ 6.4 million in painting supplies and represented qualifications as a supplier, only acted as a passing.
At the beginning of the last decade, Penndot requested the offers to restore the Girard Point bridge and the 30th Street Train Station, both in Philadelphia. The state agency granted a contract of $ 70.3 million to a joint company that had Alpha and two other companies for the project. Alpha and another company, also operating as a joint company, achieved a $ 15 million sub -contract that represented almost a third of the total winning offer of $ 50.8 million for the 30th Street Station.
It was established in court that Markias Inc., the alleged DBE provider, did not provide any painting or other materials, but Kousisis organized Alpha’s real suppliers, with whom he negotiated directly, to generate bills billing in Markias.
Kousisis then wrote separate checks for real suppliers and Markias, who paid a rate equal to the brands he added to his bills to act as a step. Kousisis and Alpha argued that neither Penndot nor the federal government suffered any monetary loss in projects, which were completed in time and budget.
“Kousisis and Alpha Painting and Construction Co. Inc., ask the court to add a requirement of economic loss to the Federal Fil Fraud Statute,” said Associate Justice Clarence Thomas in a concurrent opinion. “The court rejects this request correctly and I join in completely.”
He added that Alpha had not answered that his wrong representations in Penndot were important in the case.
According to the court, associated justice Amy Coney Barrett, he wrote that, while the Federal Appeal Courts are divided by the validity of a federal fraud conviction when the defendant did not try to cause the net loss of the victim, the fraud involved did not require any loss by Penndot.
“By using Markias as a passing entity, petitioners” devised “a” scheme “to obtain contracts through a pretended compliance with the disadvantaged business requirement of Penndot,” he wrote. “Your goal? Obtain[n] Money ‘(tens of millions of dollars) from Penndot. And how? Making a number of false or fraudulent. . . Representations’: First on your plans for Markias painting supplies and later on having done exactly that. ”
The associated justice Thomas and Neil Gorsuch wrote in their concurrences that, whether or not you can question a DBE requirement for federal construction contracts as a material or necessary for federal funding for these projects, it is a question that the court reserves the right to assume in future cases.
“The future cases of these patterns in fact will require the court to face the external limits of the scope of the Federal Fraud Statute and decide to satisfy their materiality element. Resolving this case, however, does not require this company.” Gorsuch wrote.
