The owner of a McKeesport contracting firm pleaded guilty yesterday in federal court to defrauding the Department of Defense during its emergency rebuilding of the Pentagon after the Sept. 11 attacks.

Thomas J. Cousar, 54, of Monroeville, admitted that his company, Capco Contracting, submitted some $850,000 in false bills to the prime contractor on the project in 2002 and pilfered materials from the site for his own projects in McKeesport -- Tube City Cafe and Chaton's Salon.

Two of Mr. Cousar's managers, Catherine Bradica, 55, of North Huntingdon, and Daniel Monte, 62, of Clifton, Va., pleaded guilty to the scheme earlier this week.

A fourth defendant, Joseph Arena Jr. of Maryland, a supervisor for AMEC Construction Management, the company in charge of the $199 million Pentagon rebuilding contract, pleaded guilty in 2006. His sentencing is set for April 4.

Mr. Cousar admitted that Capco performed work on Mr. Arena's waterfront home, including fixing the roof and replacing windows, and billed the Pentagon project for it.

A federal grand jury indicted the four defendants in 2006 in the Pentagon fraud.

Mr. Cousar also was charged with inflating labor costs in connection with the building of PNC Park and the Petersen Events Center from 1999 to 2001. The counts involving those local projects are still pending because of an unusual decision by U.S. District Judge Gary Lancaster.

Last year he decreed that the government would have to limit its presentation of its complex case to 40 hours in the courtroom. Because of that decision, the prosecution was forced to separate the local fraud from the counts pertaining to the Pentagon.

Assistant U.S. Attorney James Garrett said the charges pertaining to the PNC and Petersen projects could be introduced at sentencing.

Yesterday Mr. Garrett detailed a litany of padded bills, falsified documents, tax fraud and kickbacks involving the Pentagon project, called PENREN.

AMEC already was doing renovation work at the Pentagon in 2001 when the attacks occurred and retained the contract to fix the building quickly. Capco was one of the subcontractors, doing mostly interior drywall work.

During the project, some of Mr. Cousar's employees who were being paid for Pentagon work were diverted to job sites at Tube City and the salon; at Capco's McKeesport offices; and at the construction site of the Dick Corp. corporate offices in Tysons Corner, Va.

According to court papers, the government was even billed for an employee who spent a week transporting a boat owned by a Dick Corp. vice president from Maryland to Florida.

Mr. Cousar's employees also loaded flatbed trucks with ceiling tiles and drywall from the Pentagon site and drove them to Mr. Cousar's warehouse in McKeesport, where they were stored.

Those materials were later used in various other Capco projects, including the Naval Weapons Station in Charleston, S.C.

As project manager, Mr. Arena was responsible for reviewing invoices submitted by Capco to AMEC for reimbursement and reviewing the numerous contract change orders that involved Capco.

Mr. Garrett said that when AMEC received a tip that its two top supervisors, Mr. Arena and Ron Clark, were getting kickbacks, the company fired Mr. Clark.

But when a company lawyer confronted Mr. Arena, he denied taking payoffs from Capco and provided a false, backdated invoice, prepared on Ms. Bradica's computer in McKeesport, to make it look as if another construction company had done the work on Mr. Arena's home.

He also produced a fake check to make it seem as if he had paid for the work on his own.

Mr. Cousar also admitted defrauding the IRS of $29,000 by paying Capco employees overtime wages in the form of expense checks to avoid payroll taxes.

The case against Mr. Cousar first became public in 2003 when agents from the Criminal Investigation Division of the IRS, Department of Defense, FBI, Department of Labor and the U.S. Postal Inspection Service raided Capco and Tube City Cafe.

Mr. Cousar will be sentenced July 25. He remains free on bond until then.

 http://www.post-gazette.com/pg/08052/859211-84.stm