In the bowl of a food processor, combine the veal, cheese, egg, Parmigiano, nutmeg, salt and pepper. When the mixture is well-blended, shape it into several balls 1-inch diameter. Lightly dust each ball with the flour.
In a large, heavy-bottomed skillet with fairly high sides, heat the oil over high heat until just smoking. Add the balls, a few at a time, and cook until they are uniformly golden brown. Remove with a spider or slotted spoon and keep warm while the remaining meatballs are cooked.
Meanwhile, in a small saucepan, heat the tomato sauce over high heat until it begins to bubble. Keep hot while the meatballs cook.
Serve the meatballs in the hot sauce, with the basil leaves sprinkled over as garnish.
