MTA Insurance Consultant Pleads Guilty in Kickback Scheme

An insurance consultant to the Metropolitan Transportation Authority pleaded guilty in federal court Monday to paying a $5,000 bribe to a county transit agency official in return for agency business.

Gilda A. DeSmith, 44, a San Francisco Bay Area resident who formerly lived in Downey, also pleaded guilty to two counts of failing to report on her tax returns about $116,000 in income she received from the transit agency and its predecessor during 1992 and 1993.

DeSmith becomes the third person to either plead guilty or be found guilty in connection with a kickback scheme involving Abdoul Sesay, who oversaw insurance contracts at the MTA and the Los Angeles County Transportation Commission.

Sesay, the former insurance chief for the MTA’s Construction Division, is serving a 10-month sentence in federal prison after pleading guilty to accepting $25,000 in bribes from DeSmith and about $75,000 from John D. McAllister, a New York insurance consultant.

A federal court jury in December found McAllister guilty of making more than $115,000 in illegal payments to Sesay, a longtime friend, who steered $425,000 in insurance contracts to him between 1992 and 1994. McAllister was sentenced to 18 months in federal prison, but remains free on bond pending an appeal.

*

DeSmith on Monday told U.S. District Judge George H. King that she made a $5,000 payment to Sesay and in return he steered consulting work to her. King set sentencing for Jan. 26.

Assistant U.S. Atty. Marc S. Harris said a second bribery count, involving $20,000 in alleged payments by DeSmith to Sesay, will be dropped along with a count of obstruction of justice.

“In this instance, there is no question that there was a real problem with this department at the LACTC and MTA during the period from 1992 to 1994,” Harris said. “When Sesay was running the risk management department, he was doing so as a corrupt government employee, taking bribes and giving out work.”

Harris said the three cases were the result of an ongoing investigation by the MTA inspector general’s office, the Internal Revenue Service Criminal Division and the inspector general of the U.S. Department of Transportation.