Documents: Ex-official to plead guilty in tax case

AP News
Posted: Dec 12, 2013 6:31 PM

LOS ANGELES (AP) — Disgraced former Bell city manager Robert Rizzo has agreed to plead guilty to charges that he filed a false federal income tax return to reduce his tax liability, documents filed Thursday show.

The plea agreement indicates that Rizzo, 59, agreed to plead guilty to one count each of conspiracy and filing a false federal income tax return. He could face up to eight years in prison.

Rizzo acknowledged creating a corporation more than a decade ago to fraudulently claim losses on his income tax return, which reduced his tax exposure on the significant income he received while running the modest Los Angeles suburb of Bell.

The losses to the Internal Revenue Service between 2006 and 2010 totaled more than $300,000, authorities said.

Federal prosecutors said Rizzo was assisted in the scheme by his accountant, Robert Melcher, who has pleaded guilty to aiding and abetting the filing of a false tax return. Melcher could face up to three years in prison.

As part of the plea deal, Rizzo agreed to file amended tax returns that will correct all income and expenses. He also agreed to pay additional taxes and penalties.

Rizzo pleaded no contest in October to 69 counts of fraud, misappropriation of public funds and other charges linked to a brazen corruption scandal that drove Bell to the brink of bankruptcy. He's scheduled to be sentenced on March 12 and could be sent to prison for 10 to 12 years but is expected to serve about half of that time.

He became the face of a municipal scandal after it was revealed in 2010 that he was giving himself an annual salary and benefits package of $1.5 million. His $800,000 in wages alone was double that of the president of the United States.

Earlier this week, former Assistant City Manager Angela Spaccia was found guilty of 11 charges, including conspiracy and misappropriating public funds. She could face up to 17 years in prison but is likely to receive a much lighter sentence, prosecutors said.