New York City agreed Thursday to pay a record $9.9 million to settle a civil rights suit brought by Barry Gibbs, a former Brooklyn postal worker who claimed he was framed for a 1986 murder conviction by "Mafia cop" Louis Eppolito to divert attention from a mob-linked suspect.

Gibbs spent almost 19 years in jail before he was freed and his conviction was vacated in 2005, after Eppolito was charged with working for the mob for years while serving as an NYPD detective. A key witness confessed that he had been coerced by Eppolito to provide false testimony implicating Gibbs in the strangling of prostitute Virginia Robertson.

The settlement came on the eve of a civil trial scheduled to start next week in federal court in Brooklyn. It was the largest settlement paid to an individual in New York City's history, topping a $9.5-million payout to Maria Tipaldo in a motor-vehicle case, $8 million paid to Franklyn Waldron, paralyzed in a 1999 police shooting, and $7.125 million paid to Abner Louima after he was abused by police with a baton.

Gibbs' lawyer, Nick Brustin of Neufeld Scheck & Brustin, called the massive payout a "complete vindication" of his client's claims that he was framed and that the NYPD negligently supervised Eppolito by ignoring evidence that Eppolito and partner Stephen Caracappa were moonlighting as enforcers for the Lucchese family.

"Obviously it speaks volumes," Brustin said. "Eppolito wasn't just a rogue cop. There was a massive failure of supervision."

Gibbs, now 62, is living in Brooklyn and not employed. Brustin said he has serious health problems, and was scarred by his conviction and prison term.

The Gibbs case is the first to be settled of a half-dozen civil suits stemming from the activities of Eppolito and Caracappa, most of them brought by relatives of individuals killed by the mob with the assistance or involvement of the two cops.

advertisement | advertise on newsday

The city law department confirmed the deal in a terse statement: "We have agreed to settle this case and believe it is in the best interest of all parties."

Eppolito, 61, and Caracappa, 68, were convicted in 2006 of racketeering, money laundering and narcotics charges. They were accused of participating in eight murders on behalf of the mob between 1986 and 1992. Both are serving life sentences and still have appeals pending on their convictions.

Gibbs was freed shortly after the two were exposed. He had always insisted on his innocence, and agents who busted Eppolito found a file on the Robertson murder case at his residence in Las Vegas. The key witness against Gibbs - Peter Mitchell, who witnessed Robertson's body being dumped on the Belt Parkway - said he had been threatened by Eppolito if he didn't implicate Gibbs.

In his civil suit, Gibbs claimed that Eppolito decided to frame him to divert suspicion from a mob figure identified as "Brigante." The suit alleged that Eppolito forced Mitchell to wrongly identify Gibbs, and never even interviewed another witness who had seen the body being dumped. It also claimed that the NYPD failed to can Eppolito, despite knowing that he had passed information from police files to the mob.

Eppolito has never admitted framing Gibbs, insisting that he followed leads and the evidence and did not coerce witnesses. That was the expected basis of the city's defense at trial until the settlement Thursday.

Lawyers for other victims of the "Mafia cops" said they were happy for Gibbs, but disappointed that the city continues to fight other civil suits, including one brought by the mother of Nicholas Guido - a Brooklyn phone installer fingered by Eppolito and Caracappa for a hit in a case of mistaken identity.

"The things they were doing with the protection of the badge were something the city knew about or should have known about," said Mark Longo, a lawyer for Guido's mother, Pauline Pipitone. "This settlement is an acknowledgment of that, and that's what we want them to acknowledge in our case."