New York to pay a heavy price for wrongful conviction

The settlement for Barry Gibbs, 61, set a record for a civil rights lawsuit against the city. The previous high – $8m (5.4m) – went to a man left paralysed when he was shot by a police officer in 1999.

The wrongful conviction of Mr Gibbs, a former postal worker, was a disturbing footnote to the sensational case of former New York Police Department detectives Louis Eppolito and Stephen Caracappa, the so-called "Mafia cops".

The former detectives were convicted in April 2006 and imprisoned for life on charges they moonlighted as professional hit men in the 1980s and 1990s, settling scores against rivals of a Lucchese crime family underboss for tens of thousands of dollars.

A jury found Eppolito and Caracappa responsible for eight murders,

along with kidnapping and other crimes.

Eppolito had been the lead investigator in a prostitute's 1986 killing. He located a witness who testified at a trial that, while jogging, he had seen Mr Gibbs dump the body of the strangled victim near a bridge.

Mr Gibbs, who was struggling with a drug problem at the time, admitted he once had an "encounter" with the woman but said he never harmed her, but he was convicted and sentenced in 1988 to 20 years to life in prison.

Following Eppolito's arrest, Mr Gibbs's lawyers urged federal agents and prosecutors to re-examine his case. The discovery of an old homicide file on the prostitute's killing stashed in the former detective's Las Vegas home raised suspicions further.

Under renewed questioning by the FBI, the witness recanted, claiming Eppolito had bribed and intimidated him into falsely identifying Mr Gibbs. Investigators speculated the former detective may have been trying to deflect attention away from the actual mobster killers.