Philadelphia official, auto body shop charged in $400k fraud

PHILADELPHIA – Prosecutors in Philadelphia allege that a city fleet supervisor steered work to an auto body shop that overcharged the city $400,000 for phoney or inflated bills.

American Collision is also at the heart of a pending case accusing it of using deer carcasses and other props to stage accidents and collect on insurance claims.

Shop-owner Ronald Galati Sr. is already serving more than 20 years in prison for attempting a failed hit on his daughter’s boyfriend.

Prosecutors alleged Tuesday that Galati and his son, Ronald Galati Jr., didn’t have welding equipment needed to get the city contract, but city fleet supervisor Robert Otterson qualified them for the work and told them how much to bid to win the contract.

Investigators said American Collision was designated a secondary repair facility for overflow repairs work on the city’s fleet of vehicles but was sent many more vehicles than the primary repair facility. They allege that the firm’s repair and labour costs were “fraudulently inflated,” and after Otterson approved them, Galati Sr. “would then share some of the ill-gotten proceeds” with him.

The defendants are charged with theft, criminal conspiracy and tampering with public records or information.

Galati Sr.’s attorney declined comment, saying he had just started reviewing the evidence. Galati Jr’s attorney didn’t immediately return a call seeking comment. Otterson attorney Perry DeMarco Sr. declined comment on the charges but said his client would fight them “with full vigour.” He said Otterson was a family man with an unblemished record and he and a co-worker received a certificate of excellence three years ago from the managing director’s office for his work.