MTA Contractor Accused of Paying Illegal Kickbacks

A federal grand jury Thursday indicted a Metropolitan Transportation Authority contractor on charges of paying illegal kickbacks, filing false tax returns and obstructing justice in a case growing out of the bribery conviction of a former top MTA official.

Gilda A. DeSmith, a 44-year-old insurance contractor from Paramount, was accused in the five-count indictment of paying $25,000 in illegal kickbacks to former MTA executive Abdoul Sesay in 1992 and 1994 in return for more than $80,000 in consulting contracts.

Sesay, who oversaw insurance programs for the massive Los Angeles subway project, pleaded guilty in 1995 to felony charges of bribery and tax evasion and cooperated with the government in its investigation. He is serving a 14-month sentence in federal prison.

Another MTA contractor, John D. McAllister of New York, was found guilty last December of paying more than $100,000 in bribes to Sesay and was sentenced to 18 months in federal prison. He is appealing the conviction.

The charges against DeSmith are the result of an ongoing investigation being conducted by MTA Inspector General Arthur Sinai, the U.S. Department of Transportation inspector general and the Internal Revenue Service and being coordinated by U.S. Atty. Nora M. Manella’s office.

The tax charges allege that DeSmith underreported her income, and the obstruction of justice charge alleges that she attempted to impede a grand jury investigation by providing false tax returns and other financial documents in response to a grand jury subpoena, said Assistant U.S. Atty. Marc S. Harris.

DeSmith could not be reached for comment. She is scheduled for arraignment July 28.

U.S. taxpayers are paying about half the cost of building the $6.1-billion subway.