Two former PennDOT managers and eight contractors were arrested today in an overbilling scheme that defrauded taxpayers of more than $1.2 million, state Attorney General Katheen Kane announced this morning.

Alexander Morrone, 50, of Norristown, and William Rosetti, 36, of South Philadelphia, both former permits managers for PennDOT, allegedly took kickbacks from highway inspectors in exchange for ignoring phony time sheets and mileage reports, Kane said. Morrone also allegedly paid inspectors to do home improvements at his home and his mother's home while they billed the taxpayers for the work. Rosetti further is charged with billing and getting paid for hours he didn't work.

The other eight men arrested were inspectors, including:

• Frank DiMichele, 49, of Norristown: Unqualified for his position, DiMichele lied on his resume to get his post.

• John J. Cavanaugh, 61, of South Philadelphia: He allegedly added two hours of overtime daily to his timesheet and gave Rosetti $140 to $150 each pay period as a "street tax" for Rosetti to look the other way.

• Brandon Grosso, 33, of Boothwyn: Grosso, Rosetti's brother-in-law, had no construction experience, but he was hired after Rosetti allegedly instructed him how to lie on his resume. Grosso also allegedly padded his paycheck with three hours of overtime weekly and unearned mileage, paying Morrone $120 to $140 a week for "protection" to ignore the fraud.

• Joseph DeSimone, 34, of South Philadelphia, and John LaSpada, 40, of South Philadelphia: Allegedly paid kickbacks to Morrone to overlook fraudulent overbilling and rarely visited job sites they claimed they'd inspected. DeSimone also allegedly billed eight hours for work he didn't perform at a construction site that was shut down due to a state of emergency.

• Christopher Lauch, 50, of Dover, Del.: He allegedly paid Rosetti $100 a week to ignore bogus timesheets and was laid off after falling behind in kickbacks to Rosetti.

• David Betzner, 72, of Port St. Lucie, Fla.: Rosetti allegedly gave him pre-signed blank timesheets and improperly billed and was paid $53,000 for hours and mileage for inspection work at a single job site that workers said he never visited.

• Generoso F. Palmieri, 60, of Glenside: He's accused of inflating mileage and padding his hours, paying Rosetti kickbacks to ignore the scam.

Their arrests were part of the same investigation that resulted in last July's arrests of PennDOT contractor Thanh Nguyen, who allegedly stole more than $3.6 million by submitting false invoices, and Robert Slamon, the CZOP Spector Inc. inspector he allegedly bribed to ignore his fraud.

Kane's office began probing alleged abuses in the Highway Occupation Permit Program in District 6, which covers Philadelphia, Delaware, Montgomery, Chester and Bucks counties, in March 2013. The U.S. Department of Transportation Inspector General's office also participated in the investigation.

PennDOT permits are required for construction or any encroachment on interstates, U.S. routes and state highways. Inspectors, both independent and some on PennDOT staff, must ensure permit-holders adhere to law and permit conditions. Palmieri and DiMichele worked for PennDOT; the others were contracted consultants. Cavanaugh, DeSimone and LaSpada worked for Construction Methods and Coordination In. (CMC). Betzner, Lauch and Grosso worked for CZOP Spector Inc. According to a state grand-jury presentment, the inspectors were paid more than $500,000 they didn't earn, and CMC and CZOP raked in another $700,000 for their employees' unearned overtime.

The men were expected to turn themselves in this morning to be arraigned by Magisterial District Judge James P. Gallagher in Bridgeport, Montgomery County.

Kane urged tipsters who know of suspected corruption in PennDOT's District 6 to call her office at (610) 631-6208.