LOS ANGELES (CBSLA.com) — Robert Rizzo, the former city administrator of the city of Bell, will plead guilty to federal income tax charges and faces a sentence of eight years in federal prison, according to a plea agreement filed Thursday in United States District Court.
Rizzo, 59, agreed to plead guilty to felony charges of conspiracy and filing a false federal income tax return with the Internal Revenue Service, federal officials said. Rizzo, a Torrance resident, also admitted he created a corporation to fraudulently claim losses on his income tax return to reduce his tax liability on his exorbitant income from the City of Bell.
The federal plea deal comes just days after his former assistant, Angela Spaccia, was convicted on 11 public corruption counts, including misappropriating funds, conflict of interest and hiding records about other city officials’ salaries.
Rizzo was originally charged alongside Spaccia, but he pleaded no contest to 69 corruption charges in October, just before the trial began.
Bell, a blue-collar city of just a little over 35,000 people, was paying Rizzo nearly $800,000 annually before he resigned in July 2010.
According to the plea agreement, Rizzo created an S Corporation he called R.A. Rizzo Incorporated (RARI) in 2002 in order to claim bogus losses in relation to a purported rental property in Auburn, Washington. RARI’s corporate tax return fraudulently deducted more than $409,731 in losses for the years 2006 through 2009.
Rizzo’s tax preparer, Robert J. Melcher, assisted in the scheme and has pleaded guilty to aiding and abetting the filing of a false tax return. Melcher faces a sentence of up to three years in prison and will be sentenced in 2014.
Rizzo admitted to using a RARI account to pay for more than $80,000 in personal expenses in 2009 and $120,000 in construction work on his Huntington Beach home in 2010. The corporation’s tax returns falsely claimed these expenses were related to a rental property.
“Pursuing public servants who corruptly endeavor to circumvent the tax laws to fund their lavish lifestyles is a top priority for IRS Criminal Investigation,” said Richard Weber of the IRS.
According to the plea deal, Rizzo will file amended individual and S Corporation tax returns for the years 2006 through 2010 and pay all additional taxes and penalties, including a 75 percent fraud penalty.
Rizzo faces a maximum statutory sentence of eight years in federal prison.