Former Bell City Administrator To Plead Guilty On Tax Evasion Charges
Monday, January 13, 2014
LOS ANGELES — Robert A. Rizzo, the disgraced former top administrator in the city of Bell, is scheduled to plead guilty Monday to federal tax evasion charges.
In a plea agreement filed last month in U.S. District Court in Los Angeles, the 59-year-old Rizzo agreed to plead to two felony charges -- conspiracy and filing a false federal income tax return with the Internal Revenue Service. He faces a maximum of eight years in federal prison on the charges.
Rizzo previously pleaded no contest in state court to 69 counts of corruption in a scheme in which he and top Bell city officials were paid exorbitant salaries and benefits.
In the tax-evasion plea agreement filed last month, 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.
According to federal prosecutors, Rizzo, sometime in 2002, created a corporation called R.A. Rizzo Inc., which he used to claim bogus losses of more than $400,000 in relation to a purported rental property in Auburn, Wash.
He 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, prosecutors said.
Rizzo also admitted in his plea agreement that he used an R.A. Rizzo Inc. account to pay for more than $80,000 in personal expenses in 2009 and $120,000 in construction work on his former residence in Huntington Beach in 2010.
The corporation's tax returns falsely claimed that the expenses were related to the rental property, according to court papers.
As Bell's chief executive, Rizzo was taking in more than $1 million a year in illegal compensation, officials said.
After Rizzo pleaded no contest to the state charges, Superior Court Judge Kathleen Kennedy said she would allow him to serve his sentence in federal prison concurrently with the time he receives on the tax charges. He faces between 10 and 12 years in the state case and is expected to be sentenced in March.
Angela Spaccia, Bell's former assistant city administrator and Rizzo's second-in-command, was convicted in state court of 11 felonies for conspiring to misappropriate public funds and looting the working-class city's coffers through exorbitant salaries and personal loans of taxpayer money. She faces nearly 17 years in prison at sentencing tentatively set for Jan. 22.
Five ex-Bell City Council members were found guilty last March in Superior Court on felony counts of misappropriating public funds.