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Former Simon exec sentenced in mail fraud scheme

March 3, 2014

A former Simon Property Group Inc. executive was sentenced Monday to 18 months in prison for perpetrating a construction kickback scheme that federal prosecutors say netted him $766,000.

Mark Palombaro, 55, pleaded guilty in November to a single count of mail fraud. Under the plea agreement, the Carmel resident will be placed on three years of probation following his prison sentence.

Palombaro admitted to his role in a scheme that also involved a Pennsylvania-based construction company, according to the Pittsburgh Post-Gazette. Palombaro pleaded guilty in the U.S. District Court of Western Pennsylvania.

Palombaro was senior vice president of development at Simon in the mid-2000s when he solicited kickbacks from R.E. Crawford Construction Inc. of Springdale, Pa., for helping the firm obtain contracts to build two malls, prosecutors said.

Prosecutors said Palombaro steered projects in Seattle and Laguna Hills, Calif., worth a total of $15 million, to the construction firm, according to the Pittsburgh Tribune-Review.

The Pennsylvania contractor paid Palombaro $766,000 through his company, Abby Inc. Robert E. Crawford was sentenced in January to four years of probation, with the first year on home detention, and a $10,000 fine.

Palombaro reached a settlement with Simon in 2010 after the firm grew suspicious and discovered the scheme in an audit. Palombaro was making about $600,000 a year and owned an Italian restaurant when he committed the fraud, Simon's attorney said in court papers.

Palombaro will remain free on a $10,000 unsecured bond until he reports to prison in a few weeks, according to the Tribune-Review.
 

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