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March 09, 2016

Philadelphia fleet supervisor charged in alleged $400K auto repair fraud

Prosecutors say American Collision & Automotive Center obtained contract, inflated repair work with help of city official

Investigation Fraud
030916_AmericanCollision Source /Google Street View

American Collision & Automotive Center, 1930 S. 20th Street.

A Philadelphia official who supervises the city's vehicle fleet has been charged in connection with an alleged scam to overcharge the city by more than $400,000 after arranging a contract with an unqualified auto body shop.

According to prosecutors, city fleet supervisor Robert Otterson helped American Collision & Automotive Center land a municipal contract despite the auto body shop's insufficient welding equipment for the job, ABC News reports. The company, based at 1930 S. 20th Street, was originally designated as a secondary "overflow" repair facility for Philadelphia, investigators said, but ended up receiving far more vehicles than the primary site.

With the additional workload, prosecutors say American Collision "fraudulently inflated" its repair and labor costs and provided kickbacks to Otterson, who falsely qualified the company and instructed them with an exact price during the city's bidding process.

Former American Collision owner Ronald Galati Sr. is currently serving a 20-year prison term for an unsuccessful attempt to order a hit on his daughter's boyfriend. The company is also at the center of a multimillion-dollar insurance fraud case in which 41 people – including a Philadelphia police officer – were charged in May 2014 with allegedly filing false claims involving fictitious deer accidents, elaborately staged vandalism and collisions, and enhanced damages to compensate for waived deductibles, among other scenarios.

In the current investigation, Otterman, Galati Sr. and his son, Ronald Galati Jr., are each charged with theft, criminal conspiracy and tampering with public records or information.