The Only Way Is Essex cast member grabbed the child after he and a group of friends began making comments about his co-star and girlfriend Lucy Mecklenburgh, reports The Mirror.
The incident occurred earlier this month, with Falcone admitting the crime after being arrested.
"Mario and Lucy were leaving their house when some comments were made about Lucy by a group of youths nearby who were making references to her ex Mark Wright," a source is quoted as saying.
"In the heat of the moment, Mario stormed over and grabbed one of them by the collar. It was a really stupid thing to do.
"The boy, who was 11 but looked older, went home and told his mum what had happened and she called the police. Mario was arrested the following day."
Falcone later apologised for the incident in a statement which read: "Although both he and Lucy were the subject of some very hostile and confrontational provocation from a group of males Mario deeply regrets reacting in the way he did.
"He has already apologised to the boy and his family and offered to meet with them."
Falcone became engaged to Mecklenburgh earlier this year.