NYC School Bus Inspectors Sentenced, Union Officials Indicted in Bribery Scam

Even with the Genovese crime family less overtly in the driver’s seat, Local 1181 of the Amalgamated Transit Union hasn’t been entirely clean. But the union’s legacy of corruption recently received a major blow in Manhattan federal court with a round of criminal actions. On May 26, Neil Cremin, a former New York City Department of Education (DOE) school bus inspector, was sentenced in U.S. District Court for the Southern District of New York to four months of incarceration to be followed by four months of home confinement and ordered to make $30,000 in restitution to the DOE. Some two weeks later on June 8, George Ortiz, a former DOE school bus inspector, was sentenced to two and a half years in prison to be followed by two years of supervised release and ordered to make restitution of $5,000. Each had been accused of extorting and/or accepting bribes. Between these actions, brothers Nicholas and Paul Maddalone, former board members and assistant trustees of the Queens, N.Y.-based Local 1181, which represents about 15,000 New York City school bus drivers, mechanics and escorts, were indicted on June 1 for extortion, unlawful payments and conspiracy to commit bribery.

Last May, Cremin and Ortiz were arraigned following their indictments for acts of bribery and extortion dating back to the mid Nineties totaling at least $1 million. The pair, along with two other inspectors, Milton Smith and Ira Sokol, allegedly used a federally-subsidized transportation program for special-education students to demand cash payments from participating bus operators in exchange for granting them more lucrative routes. “The amount of cash payments…ranged from hundreds of dollars per year from certain bus company owners, up to tens of thousands of dollars per year from [others],” noted the indictment. In addition, the defendants knowingly overlooked vehicle safety violations and falsely designated certain bus routes as “extended” so as to pick up extra income. All four declared their innocence at the time.

The arrest and indictment of the Maddalones underscore the continuing influence of the Genovese family on ATU Local 1181. Nick Maddalone, 54, a resident of Staten Island, N.Y., served with the union from about 1984 until last year; Paul Maddalone, 60, a resident of the upscale Queens neighborhood of Neponsit, served from approximately 1993 until last year. They represent the fourth and fifth persons atop the union hierarchy to be prosecuted. For some two decades, Local 1181 President Salvatore Battaglia, Secretary-Treasurer Julius Bernstein, and Pension and Welfare Director Ann Chiarovano enriched themselves through racketeering activity that included extortion, robbery and obstruction of justice. Battalglia was a known member of the Genoveses, while Bernstein, who since has died, was an associate. Each pleaded guilty some three years ago, and the parent union placed the local into trusteeship.

The Maddalone brothers allegedly participated in these activities. Through their status as union officials and mob associates, they obtained tens of thousands of dollars from bus company owners through intimidation and threats. If convicted, each faces a maximum sentence of 20 years in prison on each of two unlawful payment counts. Their arrests followed an extensive probe by the FBI, the U.S. Labor Department’s Office of Inspector General and Office of Labor-Management-Standards, and the New York City Police Department.