Local Contractor Sentenced for Bribing Former School Board President of Madison District Public Schools
The former CEO of garbage hauler Rizzo Environmental Services (RES), pleaded guilty today to conspiring to commit bribery and wire fraud, in connection with millions of dollars of municipal garbage contracts in Macomb County and with the embezzlement of hundreds of thousands of dollars from RES, Acting United States Attorney Daniel L. Lemisch announced.
Lemisch was joined in the announcement by David P. Gelios, Special Agent In Charge of the Detroit Field Office of the Federal Bureau of Investigation and Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service.
Charles B. “Chuck” Rizzo, 46, of Bloomfield Hills, pleaded guilty before United States District Judge Robert H. Cleland in Port Huron, Michigan.
Rizzo admitted at the plea hearing that he conspired to pay bribes to Clinton Township Trustee Dean Reynolds and Macomb Township Trustee Clifford Freitas in order to secure and maintain favorable municipal garbage contracts for RES. Rizzo admitted giving Reynolds over $50,000 in cash bribes, plus free legal services in order to get a garbage contract extension from Clinton Township. He also admitted to offering to pay Freitas a bribe of $35,000, plus a salary increase, if Freitas voted to put the RES garbage bill on the Macomb Township water bill, which would reduce RES’s cost of doing business.
Besides pleading guilty to bribery, Rizzo also pleaded guilty to conspiring to commit wire fraud. Rizzo admitted to embezzling hundreds of thousands of dollars from RES while Rizzo served as the CEO of the company. The fraud conspiracy took place between 2014 and 2016, when the majority owner of RES was a New York based private equity firm. During the conspiracy, Rizzo used a variety of schemes to steal money from RES for his own enrichment. Rizzo used a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies, and methods to defraud the other owners of RES, who owned over 80% of the company, while Rizzo owned a small minority share. As one part of the embezzlement scheme, Rizzo received weekly envelopes containing thousands of dollars in cash kickbacks from a company that submitted fraudulently inflated invoices to RES.
The Rule 11 Plea Agreement provides that the sentencing guideline range that Rizzo faces at sentencing based on his criminal activity is 168-210 months, with a statutory maximum of ten years in prison.
As part of the plea today, Rizzo agreed to forfeit $4 million to the United States government. This money represents the proceeds of Rizzo’s criminal activity in securing municipal garbage contracts by paying bribes and embezzling money.
Each of the two conspiracy charges carries a maximum sentence of 5 years imprisonment and a fine of $250,000. Because of the charges to which he pleaded guilty, Rizzo faces a maximum of 10 years in prison.
Acting United States Attorney Lemisch said, “The plea today demonstrates that bribe payers face significant penalties for spreading corruption through municipal government—penalties just as severe as those faced by the public officials who take the bribes.”
"The actions of Mr. Rizzo and others implicated in this wide ranging Macomb County corruption investigation erodes our trust and confidence in public officials" said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. "Today's guilty plea represents another significant step towards reinforcing to the public that honest government is essential to our way of life and the FBI and our partners will continue to prioritize the prosecution of both corrupt elected officials and those that would endeavor to bribe them."
“IRS - Criminal Investigation is working vigorously with our partners in the Macomb County corruption investigation,” said Special Agent in Charge Manny Muriel, IRS- Criminal Investigation. “The investigators sifted through volumes of evidence to unravel the multiple and complex schemes which this group employed to conceal the scent of their illegal activity. Today’s guilty plea is the result of the diligent work of the investigation team to hold those involved accountable.”
This case is part of the government’s wide-ranging corruption investigation centered in Macomb County, Michigan. The investigation of this case was conducted by the Federal Bureau of Investigation and the Internal Revenue Service. The case is being prosecuted by Assistant U.S. Attorneys David A. Gardey, R. Michael Bullotta, and Adriana Dydell.