Milton Smith is headed for prison. And his sentencing marks the conclusion of a Mafia-backed scheme dating back to the mid-Nineties that used members of a bus drivers union to steal from the New York City school system and affiliated contractors. On February 11, Smith, a former city bus inspector, received a sentence of 15 months in U.S. District Court for the Southern District of New York for extortion and bribe-taking. The actions were in relation to a federally-subsidized special education program. He also will have to serve three years of supervised release and pay $21,000 in restitution. The maypole of the scam, Local 1181 of the Amalgamated Transit Union, since has undergone a leadership change following a trusteeship imposed by union headquarters.
Smith, along with three other bus inspectors – Neil Cremin, George Ortiz and Ira Sokol – received payments from brothers Nicholas and Paul Maddalone, each an ex-Local 1181 board member, to overlook vehicle safety violations, falsify records that enabled bus companies to overbill the City of New York, and grant union bus drivers more lucrative routes. All since have pleaded guilty and have received sentences. The Maddalones were known associates of the Genovese crime family; aging Genovese boss Matty “the Horse” Ianniello, who pleaded guilty in 2006 to racketeering and tax evasion in a separate case, ran the operation from above. The prosecutions were made possible by an extensive probe by the FBI and the U.S. Labor Department’s Office of Inspector General and Office of Labor-Management Standards.