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Contractor turned FBI mole pleads guilty

Anthony Cappello

Anthony Cappello

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Updated: August 8, 2012 6:09AM

An FBI mole pleaded guilty Friday to a federal charge, admitting he ran a phony woman-owned business called The Stealth Group to get more than $2.3 million in deals from City Hall, including contracts at O’Hare Airport.

Anthony Cappello, 48, of Homer Glen, has agreed to keep cooperating with federal authorities to avoid spending 20 years in prison on a mail-fraud charge linked to a $93,500 check that City Hall sent to his other company — Diamond Coring Co. Inc. — in May 2006.

Cappello was charged last Valentine’s Day, when the FBI revealed that he’d been working undercover for months during an investigation of city contractors to ferret out minority-contracting fraud, a crime that’s plagued City Hall for years.

Cappello helped authorities make the case that led to the arrest Elizabeth Perino, who is charged with mail fraud, accused of operating two phony women-owned businesses that were subcontractors to McHugh Construction on four city contracts worth a total of $200 million — including overhauls of the CTA’s Red and Brown lines and Wacker Drive.

During the months Cappello worked as a mole for the feds, City Hall paid his company more than $3 million for runway repairs and snow removal at O’Hare and Midway airports. Those payments continued until May, about two months after Cappello was charged with mail fraud, city records show.

Following Cappello’s arrest, Mayor Rahm Emanuel’s administration barred Cappello and his companies from getting any more city contracts.

Cappello grew up in Chicago’s East Side neighborhood at a time it was ruled by then-Ald. Edward R. Vrdolyak (10th). When Cappello founded Diamond Coring, a concrete-cutting company, he hired one of Vrdolyak’s sons to handle incorporating the business with the Illinois secretary of state’s office.

Diamond Coring has landed numerous contracts with the city, primarily at O’Hare, where construction contracts were overseen by Michael Levar, a brother of former Ald. Patrick Levar (45th), who was chairman of the City Council Aviation Committee. When Michael Levar left his city job at O’Hare in 2004, he landed a job with Cappello’s company.

To cash in on the city’s setaside program for businesses owned by women and minorities, Cappello admitted, he created another company, The Stealth Group, known as SGI, in 1999 in the name of his wife, Denise Morsovillo. Cappello closed that company in June 2006, when he learned the company was under investigation by federal authorities and City Hall’s inspector general.

Cappello admitted in a plea agreement that he “caused” his wife to “falsely” claim that she owned and operated SGI, when in reality his wife “devoted a minimal amount of her time” to the company. Instead, Cappello and an unidentified male relative operated SGI using Diamond Coring’s employees and equipment in violation of City Hall’s rules and regulations for woman-owned businesses.

“I promulgated work through Diamond Coring and controlled aspects of SGI,” Cappello said in a brief statement Friday to U.S. District Court Judge Joan Lefkow.

Once Cappello got City Hall to certify SGI as a woman-owned business, the company was able to use that certification to win government contracts with the city of Chicago, the Cook County Highway Department and the Illinois Department of Transportation, according to his plea agreement.

In 2007, a few months after Cappello shut down SGI amid the federal investigation, he nearly landed an appointment to the Illinois Liquor Control Commission from Gov. Rod Blagojevich. But Blagoevich didn’t go through with it because the appointment of Cappello, a Democrat, would have meant there weren’t enough Republicans on the commission, as required by state law.

Cappello’s sentencing was set for Oct. 19, but he agreed in his plea agreement that he would postpone his sentencing until he is finishing cooperating with federal prosecutors, including testifying at any criminal trials.Depending on the value of his cooperation, Cappello’s sentence could be reduced to less than 41 months in prison.

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