Rizzo star witness sours on feds, gets indicted

Detroit — A sweeping bribery indictment filed Wednesday against former Rizzo Environmental Services CEO Chuck Rizzo illustrates the tarnished relationship between the government’s one-time star witness and federal prosecutors, legal experts said.

Rizzo was indicted in a widespread public corruption scandal after sources say he stopped cooperating with the U.S. Attorney’s Office. The relationship soured after Rizzo had cooperated with an investigation into public officials pocketing bribes in exchange for approving municipal contracts with Rizzo’s firm and a towing company.

The 43-page indictment stems from tainted municipal contracts across Macomb County and alleges Rizzo stole from his own company to bribe elected officials and build a $2.5 million mansion.

“They have gone after him about as hard as they can,” said Peter Henning, a Wayne State University law professor and former federal prosecutor. “He’s no longer the star witness.”

The indictment comes almost eight months after the first public officials were charged in federal court with accepting bribes in exchange for awarding multimillion-dollar contracts to Rizzo’s company, which rose from a small player to dominate the garbage industry in Metro Detroit.

The breadth of Rizzo’s cooperation with the government was revealed last fall, when Clinton Township Trustee Dean Reynolds was arrested and accused of taking bribes.

Rizzo was not named in an initial indictment last fall but sources confirmed he is the businessman who allegedly provided an ongoing stream of benefits to Reynolds to secure a municipal contract.

The businessman was the subject of a court-ordered wiretap, admitted responsibility when confronted by the government and agreed to cooperate with the investigation, according to the indictment.

Since Rizzo started cooperating, 11 others have been charged in the latest public corruption scandal to hit Metro Detroit, following a years-long investigation and prosecution of ex-Detroit Mayor Kwame Kilpatrick.

Yet in recent months, Rizzo has cycled through at least two lawyers — including Bloomfield Hills attorney David DuMouchel, who is considered by many the dean of the criminal defense bar in Metro Detroit.

The end of a relationship

Rizzo stopped cooperating with the government after splitting with DuMouchel a few months ago, sources told The Detroit News. DuMouchel declined comment Wednesday and would not acknowledge he had represented Rizzo.

It’s unclear what led to the split but it is believed to have revolved around whether Rizzo would need to serve a prison sentence after cooperating with the government, sources told The News.

Rizzo has since hired Thomas Green, a white-collar criminal defense lawyer in Washington, D.C. His client list includes former Assistant U.S. Attorney General Robert Mardian during the Watergate case, retired Maj. Gen. Richard Secord during the Iran-Contra affair and ex-U.S. Sen. Donald Riegle Jr. of Michigan, a member of the Keating Five in the savings-and-loan crisis in the 1980s.

Green did not respond to a message seeking comment Wednesday.

“The government may have gotten everything it needs out of Rizzo,” Henning said. “In a sense, Rizzo is in a worse position than if he had never cooperated. Because he cannot contradict everything he has told the government or he runs the risk that the government will use his prior statements as evidence against him.

“You don’t turn your back on cooperating with the government and then provoke them into indicting you,” Henning added. “It says to me the relationship has broken down.”

Rizzo was charged alongside his father, Charles Rizzo, 70, of New Baltimore, and Detroit towing titan Gasper Fiore, 56, of Grosse Pointe Shores.

A fourth man, Bloomfield Hills resident Derrick Hicks, 47, also was charged in connection with the alleged conspiracy.

“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,” Acting U.S. Attorney Daniel 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.”

Growing scandal

The public corruption scandal is the latest to hit Metro Detroit in recent years, following the convictions of more than 40 public officials, including Kilpatrick.

“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,” said David Gelios, special agent in charge of the FBI’s Detroit office.

The indictment adds a new dimension to the Macomb County corruption scandal, alleging politicians were bribed for trash and towing contracts.

Fiore and Reynolds, the former Clinton Township trustee, were charged with multiple counts of bribery-related offenses in connection with a towing contract. In early 2016, Fiore allegedly gave Reynolds bribes totaling $7,000, prosecutors allege.

The bribes were funneled through Chuck Rizzo, according to the government.

Fiore, owner of Boulevard and Trumbull Towing, the city’s largest tow firm, has long been a dominant figure in the Detroit towing industry.

Fiore also was a minor figure in the corruption case against Kilpatrick in 2012.

That year, Kilpatrick and contractor Bobby Ferguson were charged in federal court and accused of allegedly extorting more than $90,000 from Fiore.

Federal prosecutors later dropped the Fiore allegation to avoid a potential conflict of interest involving Kilpatrick’s lawyer.

The indictment also outlines a vast fraud scheme to steal money from Rizzo’s garbage company from 2013 until it was sold last October to a Canadian firm, Green for Life Environmental Inc.

In a statement Wednesday, Green for Life CEO Patrick Dovigi said Chuck Rizzo left his job shortly after the sale.

“Two weeks after GFL bought RES we learned of disturbing allegations regarding Chuck Rizzo Jr.,” Dovigi said. “He resigned his employment at that time. No members of the Rizzo family are currently employed with GFL or any of our affiliate companies, including GFL USA.”

Rizzo, his father, Fiore, Hicks and others plotted to steal hundreds of thousands of dollars from Rizzo Environmental Services using a fake legal settlement agreement, fraudulent consulting deals, kickbacks, shell companies and stealing money to help pay for Chuck Rizzo’s mansion in Bloomfield Township, the government alleges.

Some of the stolen money bankrolled bribes for public officials to maintain and secure additional municipal garbage contracts, prosecutors say.

Chuck Rizzo called the embezzled cash OPM, short for “other people’s money,” according to prosecutors.

“Bribery regardless of how you disguise it, is illegal,” said Manny Muriel, special agent in charge of IRS Criminal Investigation. “Parties who profit and those who pay the bribe will be charged and held accountable for breaking the law.”

The indictment also says investigators have seized more than $4 million during the ongoing investigation. Prosecutors are trying to have the Rizzos forfeit proceeds from the sale of their minority interest in Rizzo Environmental Services.

The indictment adds new bribery charges against Reynolds, the former Clinton Township trustee.

Reynolds allegedly conspired to commit bribery with former New Haven trustee Brett Harris, according to the indictment.

Reynolds unwittingly introduced Harris to an undercover federal agent, telling the agent Harris was a politician willing to accept bribes, prosecutors allege.

The agent gave Harris $9,000 in cash bribes to help secure a garbage contract in New Haven, according to the indictment.

Reynolds, meanwhile, pocketed $16,000 in bribes between 2009 and 2013 from engineering contractor Paulin Modi to secure an engineering contract for Modi in Clinton Township, prosecutors allege.

Modi, a former partner with Giffels Webster engineering firm, was charged Tuesday and is expected to plead guilty. A company official said Wednesday that Giffels Webster is not a target of the federal investigation.

In all, Chuck Rizzo was charged with five counts of bribery and three counts of conspiracy to commit bribery.

Chuck Rizzo, Charles Rizzo, Fiore and Hicks were charged with conspiracy to commit mail and wire fraud.

Charles Rizzo also was charged with seven counts of mail and wire fraud, while his son was charged with 12 counts of mail and wire fraud.

The bribery charges are 10-year felonies and carry $250,000 fines. The mail and wire fraud counts are 20-year felonies and carry $250,000 fines.

Bribery conspiracy, meanwhile, is a five-year felony and carries a $250,000 fine.

rsnell@detnews.com

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Twitter: @robertsnellnews