Former trash hauler CEO Rizzo pleads guilty to bribery, wire fraud

By: Nick Mordowanec | Fraser - Clinton Township Chronicle | Published November 9, 2017

Former Rizzo Environmental Services CEO Charles B. “Chuck” Rizzo, 46, of Bloomfield Hills, pleaded guilty to conspiring to commit bribery and wire fraud in connection with millions of dollars of Macomb County municipal trash contracts — along with embezzling hundreds of thousands of dollars from RES.

The plea came Nov. 9 before U.S. District Court Judge Robert Cleland in Port Huron.

The announcement was made by Acting United States Attorney Daniel L. Lemisch, who was joined by FBI Detroit Field Office Special Agent in Charge David P. Gelios and Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service Manny J. Muriel.

“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,” Lemisch said.

At the plea hearing, Rizzo admitted that he conspired to pay bribes to now former Clinton Township Trustee Dean Reynolds and now former Macomb Township Trustee Clifford Freitas in order to secure and maintain garbage contracts for each trustee’s respective municipality. Rizzo said he gave Reynolds more than $50,000 in cash bribes, plus free legal services, in exchange for a Clinton Township contract.

He admitted to offering Freitas a $35,000 bribe, in addition to a salary increase, if Freitas put the RES garbage bill on Macomb Township’s water bill — essentially resulting in a cost savings for the Rizzo business.

Rizzo also admitted to embezzling hundreds of thousands of dollars while acting as the company’s CEO. The fraud conspiracy took place from 2014 to 2016, when the majority owner of the company was a New York-based private equity firm.

A variety of schemes were used by Rizzo to enrich himself, including: using a fake legal settlement agreement; fraudulent consulting deals; cash kickbacks; shell companies; and methods to defraud other RES owners, who owned more than 80 percent company, while Rizzo owned a small minority share.

One part of Rizzo’s embezzlement scheme included receiving weekly envelopes containing thousands of dollars in cash kickbacks from a company that submitted fraudulently inflated invoices to RES.

As part of Rizzo’s please, he agreed to forfeit $4 million to the U.S. government — with the money representing his criminal activity in accordance with bribes and embezzlement. Each of the two conspiracy charges carries a maximum five-year prison sentences and a fine of $250,000.

The Rule 11 Plea Agreement states that due to his criminal activity, Rizzo faces a sentence of between 168 to 210 months. Due to pleading guilty on specific charges, he faces a maximum of 10 years in prison.

"The actions of Mr. Rizzo and others implicated in this wide-ranging Macomb County corruption investigation erodes our trust and confidence in public officials," Gelios said in a press release. "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.”

Muriel said the IRS’s criminal investigation division is working vigorously with partners in the Macomb County corruption investigation, adding that investigators have sifted through volumes of evidence to unravel the multiple and complex schemes aimed to conceal illegal activity.

Clinton Township Supervisor Bob Cannon, who faced off against Reynolds in the township’s supervisor race in the 2016 election prior to Reynolds’ ousting as a board member, said Nov. 9 that he was aware of the allegations.

Cannon said the Rizzo era has left its mark, but that its impact is no longer felt — at least in Clinton Township.

“I firmly believe there is no one else in the township who had anything to do with Dean Reynolds and the Rizzo schemes,” he said. “I’m glad to have that ugly era of history now in the past.”

U.S. Eastern District of Michigan court records indicate that Reynolds is scheduled to appear in front of Judge Cleland Jan. 10, 2018, for a status conference.

Rizzo’s attorney, Thomas C. Green, couldn't be reached for comment.

Reynolds’ attorney, Stephen Rabaut, could not be reached for comment.