- Associated Press - Wednesday, December 17, 2014

HARRISBURG, Pa. (AP) - Pennsylvania prosecutors said Wednesday 10 people connected to Pennsylvania’s highway department faced charges related to an alleged scheme to overbill and generate kickbacks through a system that thrived on cronyism.

Two ex-managers with PennDOT in the Philadelphia area, Alexander Morrone, 50, and William Rosetti, 36, were accused of taking cash to approve inflated timesheets and mileage reports.

Morrone is alleged to have made inspectors perform home improvements for himself and his mother on the taxpayers’ time, while Rosetti is accused of getting paid for time he was not working.

“The grand jury heard testimony from multiple sources that Morrone directed inspectors to provide monetary Christmas gifts to Rosetti ‘out of respect’ for everything that Rosetti was doing from them,” an appeal that generated $800, the grand jury claimed.

The grand jury said inspectors were paid more than $500,000 they did not earn and two consulting firms were paid more than $700,000 for unearned overtime.

Two PennDOT inspectors, Frank DiMichele, 49, and Generoso Palmieri, 60, and six contractor inspectors were also charged for what state prosecutors alleged were criminal acts related to permitting and inspection programs for construction on highways. They were both suspended by PennDOT without pay on Wednesday.

DiMichele’s lawyer said he was confident the charges against his client will be dismissed, while Palmieri’s lawyer declined comment. Online court records did not list lawyers for the other defendants.

A PennDOT spokesman said the allegations do not reflect the values and integrity of its overall workforce, and noted a thorough review of district operations is underway.

“We are working with certain consultants to review billing procedures and records and will seek reimbursement for any overbilling and take other action as applicable,” said press secretary Rich Kirkpatrick. “Appropriate personnel action has also been taken and will be taken as pertinent moving forward.”

One of the inspectors, John Cavanaugh, 61, was hired after falsely claiming he had construction experience, the grand jury said, and he was told by Rosetti to systematically include an extra two hours of bogus overtime on his timecard every day.

“The grand jury also heard testimony that Cavanaugh was instructed by Rosetti to give him between $140 to $150 per pay period as a ‘street tax’ for his allowing Cavanaugh to be paid for unworked hours,” the grand jury alleged.

In what jurors called a glaring example of audacious overbilling, consultant inspector Joseph DeSimone, 34, of Philadelphia, allegedly put in for eight hours of work the same day the region was hit with a foot of snow, halting road construction.

The other defendants are John Laspada, 40, Brandon Grosso, 33, David Betzner, 72, and Christopher Lauch, 50.

All 10 were charged with various counts of corrupt organizations, theft, tampering with records and criminal conspiracy, and some also faced charges of bribery and receiving stolen property.

A grand jury recommended the charges during a broader investigation into fraud in PennDOT’s southeastern district.

A contractor was charged in July with billing the state $3.6 million for work that was not performed.

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