NEW YORK — Nicholas Guido was showing off his new car outside his mother’s home on Christmas Day 1986 when he was gunned down because he’d been mistaken for a mobster with the same name. The bad information, prosecutors said, came from two decorated police detectives who would later be convicted of moonlighting as hit men for the mob.

Twenty-nine years later, the city has reached a $5 million settlement with Guido’s family in part of the fallout from one of the most stunning police corruption cases in New York history.

“This tragic matter involves the murder of an innocent man. After evaluating all the facts, it was determined that settling the case was in the city’s best interest,” the Law Department said in a statement. The family’s lawyer didn’t immediately return a call Friday night seeking comment.

Guido’s mother, Pauline Pipitone, was washing dishes after Christmas dinner when gunfire erupted outside her Brooklyn home.

She ran over to the car and found her 26-year-old son sitting up at the wheel, she testified at the ex-detectives’ 2006 racketeering trial. “I went to touch his hand, and he must have just died,” she said. “His fingertips were cold.”