Contractor gets probation for mail, income tax fraud

Will face home detention for a year

Having risen from nobody to national-level construction contractor, Robert E. Crawford on Friday adopted a new role: homebound probationer.

Crawford, 54, who ran Springdale Borough-based R.E. Crawford Construction Inc., escaped a potential prison term for a kickback scheme by cooperating with prosecutors against the man who took the money. That man, Mark M. Palombaro, 55, of Carmel, Ind., faces sentencing in March and is likely to be sent to prison.

“Without Mr. Crawford’s cooperation, we would not have been able to charge that other individual,” assistant U.S. attorney Shaun Sweeney said, adding that he did not object to probation.

Crawford, who pleaded guilty in June to mail fraud and filing a false income tax return, faces home detention for the first of four years on probation and must pay a $10,000 fine. He has already paid around $ 3.3 million to Simon Property Group, which was defrauded in the scheme, and on Friday brought with him a check for $275,730 to cover his debt to the IRS.

“He made a mistake and he paid for it and he wants to make things right,” said defense attorney Jay T. McCamic.

Mr. McCamic said that Crawford had “a very difficult childhood of actual physical abuse.”

“He came up literally from nothing,” Mr. McCamic said, and is “a self-made guy.”

“Maybe things got too big. Maybe [Crawford] tried to do too much.”

In 2007, Simon hired Crawford’s firm to build malls in Seattle and Laguna Hills, Calif., for around $15 million. Those lucrative contracts proved to be his undoing.

He got them with the help of Mr. Palombaro, who was a senior vice president for Simon. Crawford then sent $776,000 in kickbacks to a firm called Abby Inc. Mr. Palombaro was its president.

“Mr. Palombaro saw a vulnerability and something that started off as assistance above board ended up being something beyond that,” Mr. McCamic said, declining to elaborate. Mr. Palombaro’s attorney could not be reached for comment.

To cover the kickbacks, Crawford inflated his bills to Simon by around $1 million. When the mall company started asking questions about the bills, Crawford backed them up with fake subcontractor bills, Mr. Sweeney has said.

Simon sued Crawford and Mr. Palombaro, and reached a $ 3.3 million settlement. Crawford said he paid the settlement amount.

Crawford has been exploring bankruptcy, according to Mr. McCamic, but also wants to get back into the construction business.

Crawford’s cooperation with prosecutors was “by far the most significant” factor underlying the sentence, U.S. District Judge David S. Cercone said.

In November, Mr. Palombaro pleaded guilty to mail fraud and is expected to be sentenced in March. A plea agreement, which Judge Cercone can accept or reject, calls for an 18-month prison sentence.