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How did reputed mob figure land major city contract in Philly?

Ron Galati, a reputed mob associate who was arrested for allegedly soliciting murder, has been earning big bucks from the city.

South Philly's American Collision, which works on police cars, is owned by an ex-con, sentenced to three years for turning another shop he owned into what prosecutors called a "shop of fraud." He's also under investigation for insurance fraud. (Yong Kim/Staff Photographer)
South Philly's American Collision, which works on police cars, is owned by an ex-con, sentenced to three years for turning another shop he owned into what prosecutors called a "shop of fraud." He's also under investigation for insurance fraud. (Yong Kim/Staff Photographer)Read more

RONALD GALATI, a South Philly fraudster and reputed mob associate at the center of a triple murder-for-hire investigation, has earned hundreds of thousands of dollars from a lucrative contract to repair and maintain Philadelphia Police Department vehicles, the Daily News has learned.

Galati, 63, identified by authorities as a onetime associate of mobsters Joey Merlino and George Borgesi, was able to land the contract despite a 1994 racketeering conviction for turning one of his auto-body garages into what federal prosecutors described as a "shop of fraud."

Yesterday, a marked police car was parked inside Galati's shop, American Collision & Automotive Center, on 20th Street near McKean. Records show that the city paid his company more than $400,000 in fiscal year 2012 alone. The contract began in 2011 and runs through June, a city official said.

Galati, whose name has surfaced in the ongoing racketeering retrial of Borgesi and reputed mob boss Joseph "Uncle Joe" Ligambi, was arrested Friday on allegations that he hired hit men to kill his daughter's boyfriend and a body-shop operator and his son.

Law-enforcement officials are withholding details of Galati's arrest because a grand jury is handling the case. But court documents show Galati has been the focus of an insurance-fraud investigation for a year and a half. In fact, state police have been monitoring Galati's shop with a hidden surveillance camera that captured Galati speaking with the alleged hit men in October, according to court documents.

The two alleged hit men, identified in the documents as Ronald Walker and Alvin Matthews, began cooperating with authorities after they were busted in Atlantic City on Nov. 30 moments after Andrew Tuono was shot in front of his home. Walker and Matthews said they had been hired by Galati to kill Tuono, whom they described as Galati's daughter's boyfriend. Tuono was shot three times in the abdomen, but survived.

Walker told authorities that Galati also had hired him to kill a South Philly auto-shop owner and his son, saying, "They gotta go." Galati believed that the father was cooperating with authorities in the insurance-fraud investigation. That hit apparently was delayed, Walker told authorities.

Officials from the District Attorney's Office, the U.S. Attorney's Office and the state Attorney General's Office have declined to comment on Galati's arrest or the insurance-fraud probe. He is being held at the Curran-Fromhold Correctional Facility on charges of attempted murder, solicitation of murder, and retaliation and intimidation of a witness or victim, according to court records.

Galati has a bail hearing scheduled for Monday, according to his attorney, Joseph Santaguida, who represented reputed mob underboss Joseph "Mousie" Massimino in the previous racketeering trial involving Ligambi and Borgesi.

"It's a grand jury. None of the defense lawyers like it at all. It's like a secret ritual," Santaguida said yesterday. "They hold you without bail and you have no opportunity to confront the facts. It's really terrible."

Santaguida, a longtime mob attorney, said authorities have not provided him with the allegations against his client.

It was unclear last night how much Galati has earned from the city through his police-vehicle contract, but budget records obtained by civic activist Brett Mandel and organized in his online database show that American Collision & Automotive Center was paid $435,562 in fiscal year 2012.

"The city should make this available," said Mandel, who served as director of financial and policy analysis under former City Controller Jonathan Saidel and was a candidate in the spring primary for controller.

Mayor Nutter's spokesman, Mark McDonald, did not respond to email requests yesterday for information about the Galati contract. Lt. John Stanford, a police spokesman, said he had no information last night about the contract.

In 1995, Galati was sentenced to three years in prison for what prosecutors described as widespread insurance fraud involving vehicles brought into his shop on 12th Street near Washington Avenue.

"We're talking about a pattern of systematic fraud of all types that occurred over an eight-year period," Assistant U.S. Attorney Seth Weber said at Galati's sentencing hearing, the Inquirer reported in April 1995.

Galati, who employed Merlino in 1992 after Merlino was released from prison for an armored-truck robbery, was once on a hit list allegedly compiled by ex-mob boss John Stanfa. Stanfa, now serving five life sentences, believed that Galati was involved with cutting gun ports into a van that was used in a 1993 Schuylkill Expressway shooting that wounded Stanfa's son.

Last month, mob turncoat Louis "Bent Finger Lou" Monacello took the witness stand in the retrial of Ligambi and Borgesi and described how he and Borgesi became friends and then began committing crimes together, including stealing cars.

Monacello said Borgesi was friendly with Galati, who would copy customers' car keys and give them to Borgesi. Borgesi later would steal the cars and Monacello would follow him in another car, Monacello testified. They would damage the stolen cars, and the customers, unaware that they were pawns in a scam, would bring the cars back to Galati's body shop to be repaired, Monacello said.

"People would give their cars back to Ron," Monacello said. "Ron Galati would give him [Borgesi] a cut in cash."

- Staff writers Julie Shaw and Mensah M. Dean contributed to this report.