Former California city official pleads guilty to federal charges

Reuters News
Posted: Dec 12, 2013 8:09 PM
Former California city official pleads guilty to federal charges

By Bernard Vaughan

(Reuters) - The former city manager for the scandal-plagued California city of Bell has agreed to plead guilty to federal conspiracy and tax charges, prosecutors announced on Thursday.

Robert Rizzo, who came to embody pervasive corruption in Bell when it was revealed in 2010 that he was making a salary of almost $800,000, now faces a maximum of eight years in prison.

Rizzo, 59, admitted that he created a corporation to fraudulently claim losses on his income tax return, the U.S. Attorney's Office for the Central District of California said in a press release.

The fraud allowed the Torrance, California resident to reduce his tax liability on his income from Bell.

Rizzo pleaded guilty to two felony charges: conspiracy and filing a false federal income tax return with the Internal Revenue Service.

Rizzo was helped by his tax preparer, Robert Melcher, who previously pleaded guilty to aiding and abetting the filing of a false tax return, according to the press release.

In the plea agreement, Rizzo admitted that he used the corporation he created to finance more than $80,000 in personal expenses in 2009 and $120,000 in construction work on his residence in Huntington Beach in 2010.

"Pursuing public servants who corruptly endeavor to circumvent the tax laws to fund their lavish lifestyles is a top priority" for IRS criminal investigators, Richard Weber, chief of the IRS's criminal investigation unit, said in a statement.

The fraud cost the IRS more than $300,000 for 2006 through 2010. Rizzo has agreed to file amended tax returns for those years and pay additional taxes and penalties.

Rizzo's plea comes just more than two months after he abruptly pleaded no contest to state charges ranging from perjury to misappropriating public funds, a week before jury selection was set to begin in a high-profile public corruption trial at Los Angeles County Superior Court

James Spertus, Rizzo's lawyer, did not immediately return a call seeking comment.

In October, however, he told Reuters, "Mr. Rizzo wants to take responsibility for his conduct, wants to save the people of California and the United States the costs and expenses of lengthy jury trials during difficult financial times when courts have limited resources, and wants to complete his sentences and return to his family as soon as possible with his troubles behind him."

(Reporting by Bernard Vaughan in New York; Editing by Cynthia Osterman)