D.A.: Mob associate had fraudulent city contract, scammed insurance firms

HOW DOES a mob-connected fraudster - who allegedly kept deer blood at his South Philly auto-body shop to stage fake "Hollywood" accidents - land a $1.8 million city contract to fix cop cars and other vehicles?

This is Philadelphia. He knew a guy.

"We are here today to announce the arrest - once again - of Ron Galati Sr. and his co-conspirators for a nearly $5 million insurance-fraud scheme," District Attorney Seth Williams said yesterday, before delving into the latest round of charges against Galati.

Galati, 63, an auto mechanic with ties to mobsters including Joey Merlino and Joseph Ligambi, was already being held without bail for allegedly masterminding a triple-murder-for-hire plot that targeted his daughter's boyfriend, a body-shop operator who he believed had testified against him and the operator's son.

City prosecutors piled on yesterday with a 69-page grand-jury presentment that accused Galati and dozens of cohorts - including his son, his wife, Ligambi's son and a Philly cop - of perpetrating a "staggering amount of insurance fraud" at American Collision & Auto Center, the shop at 20th Street near McKean that Galati operated. In all, 41 people have been charged.

"I live my life to cheat insurance companies. My high every day is to cheat insurance companies," Galati is quoted by cooperating witnesses as saying.

Williams said American Collision raked in about $1.8 million from city taxpayers with the help of Robert Otterson, an employee in the city's Office of Fleet Management who allegedly helped Galati fraudulently obtain a contract in February 2011 by looking the other way when Galati didn't have the proper equipment. Prosecutors also questioned the legitimacy of some of the repairs.

David Wilson, the city's first deputy managing director for administration, said his office just learned of the charges yesterday. Otterson is charged with conspiracy, bid-rigging, perjury and other crimes. "In cases like this, we would have a disciplinary hearing with the intent to dismiss," Wilson said.

Galati is known for befriending cops and repairing their personal cars at a discount. Williams himself attended a block party near Galati's home last summer and was seen "palling around with Galati," according to a party attendee. Williams' spokeswoman has acknowledged that he was there and met Galati, but said the two men had no prior relationship.

The city stopped sending business to Galati's shop in December after the Daily News reported on the contract and his mounting legal troubles. Galati has a 1994 racketeering conviction for turning one of his auto-body garages into what federal prosecutors had described as a "shop of fraud."

During the past four years, insurance companies paid about $2.3 million to American Collision in connection with allegedly fraudulent claims, including fictitious deer accidents, vandalism and supposed collisions with dogs, fruit cartons, geese, flying metal and falling concrete, according to Williams.

"They actually kept deer carcasses at the shop and they would simulate accidents and take photographs they called 'Hollywood photos,' " Williams said. "They would pour deer blood over cars."

Galati's attorney, Anthony Voci, said his client "enjoys the presumption of innocence."

And don't worry, South Philly wiseguys: Voci said that Galati has no plans to rat on the mob - even if he knew anything.

"My client is not cooperating with city, state or federal law-enforcement agencies, has not considered it and likely will never consider it," Voci said.