Six current or former employees of Galati Auto Body and its successor company, Drive-In Auto Body, also were named in the indictment.
A separate indictment charged Galati's brother John, 40, an accountant, with obstruction of justice. That charge related to documents prepared in connection with a $230,000 bank loan for Ronald Galati, according to authorities.
The long-rumored indictment capped what authorities said was an eight-year investigation into Galati's auto body repair business on 12th Street near Washington Avenue.
Authorities said Galati directed a racketeering enterprise that included stealing and vandalizing customers' cars.
"Galati directed others . . . to damage these vehicles . . . while they were parked on the street . . . causing greater damage to them once they arrived at Galati's auto body shop," according to a press release from the U.S. Attorney's Office that accompanied the indictment. "Based upon the damage caused to the vehicles . . . false and fraudulent insurance claims were filed."
Authorities charge that Galati's share of the fraud was "in excess of $96,000."
Galati, according to Assistant U.S. Attorney Seth Weber who is prosecuting the case, was arrested yesterday and is being held pending a bail hearing Tuesday. All the other defendants in the case were charged and released.
Friends of Galati have said that he was targeted for investigation because of his past ties to reputed mob figure Joseph "Skinny Joey" Merlino. Merlino worked briefly at the auto body shop in 1992 while living in a prison halfway house and completing a four-year sentence for a armored truck robbery.
Galati was arrested last month on charges of threatening to kill Postal Inspector James Trovarello. The threat, overheard by a Philadelphia police detective, came while both Galati and Trovarello were attending a Saturday night social at Saint Monica's parish hall in South Philadelphia.
Galati and Trovarello grew up together in South Philadelphia and are both members of the parish. While police and federal authorities took the threat seriously, friends of Galati's charged the allegation had been blown out of proportion and was part of the continued harassment of the auto body shop dealer because of his friendship with alleged mob figures.