Fast-Rising Allstate Sales Group Collapses After CEO Tepedino Charged with Orchestrating the Perfect Fraud

Allstate Sales Group was once heralded as a story of rapid growth and success. The company built a reputation as one of the emerging construction and engineering vendors in the United States, boasting over 700 employees at its peak. It secured major wireless infrastructure contracts with industry giants such as Verizon, AT&T, Frontier, Everstream, Tilson/Boundless, and MTA Bridges & Tunnels.

However, this success was built on a carefully orchestrated fraud scheme that eventually came to light, leading to the company's downfall. The scandal surfaced after the company abruptly let go of 500 employees and vendors went unpaid, raising suspicions about the company's financial health.

Last week, the US Attorney's Office for the Southern District of New York unsealed an indictment against Allstate Sales Group's CEO, Anthony Tepedino. The documents revealed that the company's collapse was not due to a liquidity crisis but was instead the result of a deliberate, long-running fraud that had metastasised over more than five years.

The Shell Companies and Deception

ASG had expanded quickly into fibre optic, enterprise construction, and wireless deployments, often appearing on public bidding lists for clients like AT&T and Verizon. Nonetheless, Tepedino, 61, who founded the company in 2008, remained the sole owner and had complete control over its finances. The indictment highlighted a pattern of rapid invoice approvals and a close-knit circle of insiders, which became the conduit for fraudulent activities, including document fabrication, bribery, and the creation of shell companies.

Tepedino and an associate established a non-operational shell company that lacked staff or equipment. Its sole purpose was to receive fraudulent payments from false invoices, which Tepedino approved internally. To make these payments appear legitimate, he forged signatures of ASG executives on the invoices.

By 2024, the shell company had received over $5 million (£3.7 million). The money was allegedly split among co-conspirators and used for personal expenses, including upgrading Tepedino's residence in New Jersey.

A Systematic Bribery Scheme

In 2020, Tepedino allegedly used the siphoned funds to bribe a senior executive at ASG's largest client, paying over $1 million (£747,638). In return, the client's executive awarded ASG major projects and approved inflated invoices. As a result, ASG received more than $300 million (£224.2 million) in payments from this client. It remains unclear whether the client was Verizon or AT&T.

Fraud to Sustain Operations

In 2021, ASG sought additional funding by applying for over $18 million in commercial credit from a federally insured bank. Tepedino allegedly concealed the shell company scheme, the bribes, and the inflated invoices that misrepresented the company's revenue as legitimate income. The bank approved the credit line, unaware of the criminal activities behind the scenes. This allowed ASG to continue operating under false pretenses, further damaging employees and vendors.

As law enforcement investigations advanced, Tepedino reportedly called a secret meeting in September 2024. He instructed conspirators to turn off their phones and introduced background noise to mask their discussions. During the meeting, Tepedino allegedly ordered his associates to portray the bribe payments as legitimate consulting fees, in an effort to cover their tracks.

By late last year, the company was crumbling. Federal agents seized documents and personal devices, revealing the extent of the scheme. Cash flow dried up as clients started re-evaluating their relationships with ASG. Employees were dismissed without warning this year amid unpaid invoices, and vendors began filing lawsuits over unpaid bills. The sudden job losses and office closures left many workers and contractors devastated.

The indictment paints a stark picture: the fraud not only compromised ASG's governance but also devastated the livelihoods of staff and destabilised its vendor ecosystem. Tepedino now faces multiple charges, including conspiracy to commit wire fraud, bank fraud, and witness tampering. If convicted, he could face up to 30 years behind bars.