Michigan – The former CEO of garbage hauler Rizzo Environmental Services (RES), Charles B. “Chuck” Rizzo, 46, of Bloomfield Hills, was sentenced to 66 months in prison and ordered to pay $4 million in forfeiture based on his convictions for conspiring to commit bribery and wire fraud, in connection with millions of dollars of municipal garbage contracts in Macomb County and with the embezzlement of hundreds of thousands of dollars from RES, United States Attorney Matthew Schneider announced.
Schneider was joined in the announcement by Timothy R. Slater, Special Agent in Charge of the Detroit Field Office of the Federal Bureau of Investigation and Manny Muriel, Special Agent in Charge of the Detroit Field Office of the Internal Revenue Service.
Rizzo had been convicted of conspiring to pay bribes to Clinton Township Trustee Dean Reynolds and Macomb Township Trustee Clifford Freitas in order to secure and maintain favorable municipal garbage contracts for RES. Rizzo was convicted of giving Reynolds over $50,000 in cash bribes, plus over $50,000 in free legal services in order to get a 10-year garbage contract extension from Clinton Township worth over $15 million. Rizzo also had been convicted paying Freitas $7,500 for his assistance in securing the Macomb Township garbage contract and offering to pay Freitas a bribe of $35,000, plus a salary increase, if Freitas voted to put the RES garbage bill on the Macomb Township water bill, which would reduce RES’s cost of doing business.
Besides standing convicted of bribery conspiracy, Rizzo also was sentenced for conspiring to commit wire fraud. Rizzo had embezzled over $900,000 from RES while Rizzo served as the CEO of the company. At the time, RES’s owners included a New York private equity firm. The investors in the private equity firm included the Boy Scouts of America and the Montana and Arizona state employee pension funds. Rizzo’s fraud conspiracy took place between 2014 and 2016, and Rizzo used a variety of schemes to steal money from RES for his own enrichment. Rizzo used a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies, and methods to defraud the other owners of RES, who owned over 80% of the company, while Rizzo owned a small minority share. As one part of the embezzlement scheme, Rizzo received weekly envelopes containing thousands of dollars in cash kickbacks from a company that submitted fraudulently inflated invoices to RES. Through this one scheme alone, Rizzo stole over $500,000 in cash.
As part of his sentence, the Court ordered Rizzo to forfeit $4 million in criminal proceeds to the United States government. This money represents the proceeds of Rizzo’s criminal activity in securing municipal garbage contracts by paying bribes and embezzling money.
United States Attorney Schneider stated, “The Court’s sentence today demonstrates that bribe payers will face severe sanctions for spreading corruption through municipal government—penalties just as severe as those faced by the public officials who take the bribes.”
“Criminal actions, such as those committed by Charles B. Rizzo, have resulted in widespread harm to the trusting relationships among community members and their chosen leaders”, said Timothy R. Slater, Special Agent in Charge, Detroit FBI. “Safeguarding and protecting the public’s trust is not done alone. I would encourage anyone who has information about such criminal activity to call the FBI Public Corruption Task Force at (313) 965-2323”.
The full press release is available at justice.gov.