Former Simon executive faces fraud charge

Former Simon Property Group Inc. executive Mark Palombaro faces a single count of mail fraud in connection with a construction kickback scheme, which federal prosecutors say netted him $766,000.

Palombaro reached a settlement with Simon in 2010 after the firm filed a lawsuit accusing him of steering construction contracts in return for kickbacks. The federal charge was filed Wednesday in the U.S. District Court of Western Pennsylvania.

Palombaro, who lives in Carmel, was senior vice president of development at Simon in 2006 when he solicited kickbacks from R.E. Crawford Construction Inc. of Springdale, Pa., for helping the firm obtain contracts to build two malls, prosecutors allege.

The Pennsylvania contractor paid Palombaro $766,000 through his company Abby Inc., and Palombaro sent one of the checks for $116,000 through the mail, according to the information that U.S. Attorney Soo Song filed Wednesday.

Prosecutors waived indictment, suggesting that Palombaro cooperated with the investigation. Mail fraud is a felony punishable by as many as 20 years in prison or as little as three years of supervised release.

Palombaro filed for bankruptcy protection last December, listing assets of $5,180 and liabilities of more than $698,000. Those included more than $150,000 in taxes owed and more than $375,000 owed to Abby Inc.

A phone call to a listed number for Palombaro in Carmel was not answered Thursday morning.