Former Rizzo CEO charged with fraud, bribery

Additional people charged in garbage hauler corruption case

By: Nick Mordowanec, Tiffany Esshaki | C&G Newspapers | Published May 31, 2017


METRO DETROIT — Charles B. “Chuck” Rizzo, 46, of Bloomfield Hills, the former CEO of garbage hauler Rizzo Environmental Services, was indicted May 31 on five counts of bribery and three counts of conspiracy to commit bribery.

Acting United States Attorney Daniel L. Lemisch announced that Rizzo’s charges are in relation to refuse contracts with Clinton, Macomb and Chesterfield townships.

Lemisch was joined in the announcement 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.

“This indictment demonstrates our commitment to bring to justice all participants in bribery schemes, including both the corrupt public officials and the bribe payers seeking to profit from public contracts,” Lemisch said in a statement. “Our citizens are entitled to decisions based on the best interests of the public, not the best interests of politicians who accept bribes and bribe-paying contractors.”

Gasper Fiore, 56, of Grosse Pointe Shores, was also charged with bribery.

Fiore is alleged to have been in connection with former Clinton Township Trustee Dean Reynolds, who was arrested Oct. 13, 2016, for multiple counts of bribery and conspiring to commit bribery.

The FBI alleges that in March 2016, Fiore paid Reynolds a $4,000 cash bribe in order for Clinton Township to secure a towing contract. In May 2016, Fiore allegedly paid Reynolds another $3,000.

The bribes were paid by Fiore to Reynolds through Charles Rizzo.

Also indicted were Charles P. Rizzo, 70, of New Baltimore, and Derrick Hicks, 47, of Bloomfield Hills, on charges of conspiracy to commit mail and wire fraud. Charles P. Rizzo is the father of Chuck Rizzo.

The elder Rizzo is additionally charged with seven counts of mail and wire fraud, while his son is charged with 12 counts of mail and wire fraud. The charges are based on the defendants’ alleged conspiracy involving “at least 10 different schemes to steal money” from Rizzo Environmental Services between 2013 and 2016 — when the majority owner of the garbage hauler was a New York-based equity firm.

It is alleged that Chuck Rizzo, Charles Rizzo, Fiore, Hicks and others plotted to steal hundreds of thousands of dollars by using a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies and stealing money to pay for part of the construction costs of Charles Rizzo’s Bloomfield Township mansion.

Then bribes were reportedly paid to public officials for the maintenance and procurement of additional municipal garbage contracts. According to the press release issued, Chuck Rizzo allegedly referred to the embezzlement scheme as “OPM,” or “other people’s money.”

The indictment contains forfeiture provisions in regard to the more than $4 million already seized by the government as part of the investigation — along with seeking the forfeiture of proceeds of the sale of Rizzo’s minority interest in the garbage hauling company.

“The public understandably is skeptical when public officials and municipal contractors in southeast Michigan conspire with one another to line their own pockets and illegally scheme to obtain advantages over their competitors,” Gelios said in a statement. “Today’s indictments reflect the FBI’s continued resolve to root out public corruption and to work with honest community leaders to restore the public’s trust in their government officials and institutions. Unfortunately, though, corrupt activity such as this continues.”

The indictment also adds new bribery charges against Reynolds.

It is alleged that Reynolds conspired to commit bribery with former New Haven Trustee Brett Harris. The indictment states that Reynolds introduced Harris, 57, to an individual who, unbeknownst to both Reynolds and Harris, was an undercover federal agent. Reynolds allegedly introduced Harris as a politician who is willing to take bribes.

The undercover agent allegedly paid Harris $9,000 in cash bribes in return for a promise to secure a garbage contract in New Haven.

Also, Reynolds was charged with accepting multiple bribes from engineering contractor Paulin Modi, who allegedly bribed Reynolds with $8,000 in 2009 and another $8,000 in 2013. The bribes revolved around an engineering contract that Modi attempted to secure for Clinton Township.

Clinton Township Supervisor Bob Cannon sat on the Clinton Township Board of Trustees with Reynolds for more than a decade, and the two ran against one another for supervisor in the 2016 election.

“I’m appalled and disgusted at both the people that gave him the money, and to him for demanding the money,” Cannon said. “It’s sad. It’s very sad. It not only ruined his life, but the lives around him.”

Each bribery charge carries a maximum sentence of 10 years imprisonment and a fine of $250,000. Each of the mail and wire fraud counts carries a maximum sentence of 20 years imprisonment and a fine of $250,000. The bribery conspiracy counts carry a maximum sentence of five years imprisonment and a fine of $250,000.

At press time, Reynolds’ attorney, Stephen Rabaut, could not be reached for comment. According to court records, Reynolds is scheduled to appear before U.S. District Court Judge Robert H. Cleland June 6 for his final pretrial hearing.

The younger Rizzo has retained high-powered Washington, D.C., attorney Thomas Green, of Sidley Law, to represent him during the federal proceedings. According to the firm’s website, Sidley has a long history of representing defendants in high-profile white-collar crime cases, including the infamous Whitewater and Watergate scandals.

Rizzo Jr. resigned from the helm of the company last fall, shortly after news broke about the bribery allegations connected to the company. The company was purchased by Greener for Life, or GFL.

Green said neither he nor his client wished to comment on the indictment.

Former Chesterfield Township Supervisor Michael Lovelock, former New Haven Trustee Christopher Craigmiles and former New Haven Trustee Brett Harris have all already accepted plea deals.

At press time, Clifford Freitas, the ex-Macomb Township trustee who was arrested Oct. 25 by the FBI on bribery charges, was scheduled to appear in front of Cleland in U.S. District Court June 1 for a plea hearing.

Staff writer Terry Oparka contributed to this report.