Indiana man gets 18 months in prison for kickback scheme

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An Indiana man who once held a $600,000-a-year job managing big-box retail construction was sentenced Monday to 18 months in prison for taking $766,000 in kickbacks from a Springdale-based businessman.

Mark M. Palombaro, 55, of Carmel, Ind., was a senior vice president for Simon Properties Group and also owned an Italian restaurant in Indianapolis, according to a victim impact statement filed at his sentencing.

Palombaro used his influence to get Simon to hire Springdale-based R.E. Crawford Construction to build malls in Seattle and in Laguna Hills, Calif., at a total price of around $15 million. Robert E. Crawford, who ran Crawford Construction, then paid the kickbacks to a company called Abby Inc. -- named for Palombaro's daughter -- and overbilled Simon to cover the costs, plus more.

After the arrangement was discovered, Palombaro was charged with mail fraud, to which he pleaded guilty.

In the victim impact statement, Simon senior associate general counsel Michael Hunter Freese called the scheme "the sort of reprehensible conduct that cannot be tolerated or excused given the duty owed to shareholders and to the investors that place their trust in American corporations."

Mr. Freese wrote that Simon was defrauded to the tune of $3.8 million, of which insurance covered $500,000. Crawford paid $3.3 million in restitution, and Palombaro paid only an unspecified amount to the insurer, according to the statement.

Palombaro's attorney, Thomas J. Farrell, declined to say how much restitution his client had paid.

Mr. Farrell and assistant U.S. attorney Shaun Sweeney stipulated to a sentence of 18 months in prison and three years of post-release probation, and U.S. District Judge David Cercone approved it. Palombaro has until May 1 to report to prison.

Crawford, who cooperated with prosecutors, is serving four years of probation for mail fraud and filing a false tax return.


Rich Lord: rlord@post-gazette.com, 412-263-1542 or on Twitter @richelord. First Published March 3, 2014 12:46 PM

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