• BREAKING NEWS ABC shows live and on-demand -- Download the WATCH ABC app!

Bell city corruption: Rizzo to plead guilty to tax evasion

Robert Rizzo, former city manager of the Bell, appears in this undated file photo.

October 3, 2013 11:11:03 AM PDT
Former Bell city manager Robert Rizzo has agreed to plead guilty to federal charges of tax evasion, the U.S. Attorney's Office announced Thursday.

Rizzo has previously pleaded no contest to 69 counts of corruption in a scheme in which he and top city officials were paid exorbitant salaries and benefits.

In a statement Thursday, the U.S. Attorney's Office said Rizzo has agreed to plead guilty to two felony charges: conspiracy and filing a false federal income tax return with the IRS.

Rizzo will face a maximum sentence of eight years in federal prison on these charges. He will be summoned to appear in federal court for arraignment, but the date was not immediately announced.

In the tax-evasion plea agreement filed Thursday, Rizzo admits he created a corporation to fraudulently claim losses on his income tax return. The IRS suffered losses of more than $300,000 for the years 2006-2010, the U.S. Attorney's Office said.

Rizzo allegedly used an "S" corporation called R.A. Rizzo Inc. (RARI) to claim bogus losses on a rental property in Washington. Rizzo admits in the plea agreement to using the corporation to pay for more than $80,000 in personal expenses in 2009, and $120,000 in construction work on his residence in Huntington Beach in 2010.

Rizzo was assisted in the scheme by co-conspirators that included his tax preparer, Robert J. Melcher, who has pleaded guilty to aiding and abetting the filing of a false tax return, the U.S. Attorney's Office said.

Rizzo is among eight former Bell city officials accused of bilking taxpayers out of about $5.5 million through hefty salaries, benefits and illicit loans of public money.

Rizzo's assistant, Angela Spaccia, was convicted Monday in a separate corruption trial. Jurors found Spaccia guilty of 11 of 13 corruption-related felony charges, including conspiracy, misappropriating public funds, falsification of government records and conflict of interest.

Bell's former mayor and four former council members were convicted of multiple counts of misappropriation of public funds from the blue-collar city.

Rizzo is the subject of a civil case brought by the city of Bell. The L.A. District Attorney's Office has filed criminal proceedings against Rizzo.

Bell's civil claims against Rizzo include intentional misrepresentation and restitution of money allegedly wrongfully obtained.

City records revealed that Rizzo had an annual salary and compensation package worth $1.5 million, making him one of the highest paid administrators in the country. Rizzo's salary alone was about $800,000 per year. Throughout the corruption trial, the defendants, their lawyers and even some prosecution witnesses pointed the blame at Rizzo, saying he was the true mastermind behind the scheme that bilked Bell out of $5.5 million.

Load Comments