Trash giant Rizzo pleads guilty to bribery
Port Huron — Trash titan Chuck Rizzo faces up to 10 years in federal prison after pleading guilty Thursday, admitting he bribed Macomb County politicians and stole money from his trash-hauling company while building Rizzo Environmental Services into a regional powerhouse.
Rizzo, 47, of Bloomfield Hills, also will forfeit $4 million and help the government prosecute others ensnared in a wide-ranging public corruption scandal. U.S. District Judge Robert Cleland tentatively scheduled a March 13 sentencing.
The plea to conspiring to commit bribery and wire fraud capped a dramatic downfall for the trash-hauling CEO who is one of the key figures in an ongoing scandal that has led to criminal charges against 17 people — and 11 guilty pleas.
A noticeably thinner Rizzo, dressed in a dark suit, licked his lips but said nothing outside federal court when asked if he had any regrets. His lawyers declined comment.
“The plea today demonstrates that bribe payers face significant penalties for spreading corruption through municipal government — penalties just as severe as those faced by the public officials who take the bribes,” acting U.S. Attorney Daniel Lemisch said in a statement.
The plea deal is contingent on his father, Charles Rizzo, pleading guilty later this month. In exchange, prosecutors will drop attempts to have several commercial and residential properties owned by the duo forfeited to the government. The properties include Chuck Rizzo’s $2.5 million mansion.
If Rizzo provides significant help to prosecutors, the government will ask Cleland the reduce the sentence to a little more than six years in prison.
The scandal is focused on at least three fronts: Macomb County politicians pocketing bribes in exchange for approving municipal contracts with Sterling Heights trash hauler Rizzo Environmental Services, Grosse Pointe Shores businessman Gasper Fiore’s towing empire, and the Macomb County Public Works office.
“The actions of Mr. Rizzo and others implicated in this wide-ranging Macomb County corruption investigation erodes our trust and confidence in public officials,” said David Gelios, special agent in charge of the FBI’s Detroit office, in a statement. “Today's guilty plea represents another significant step towards reinforcing to the public that honest government is essential to our way of life and the FBI and our partners will continue to prioritize the prosecution of both corrupt elected officials and those that would endeavor to bribe them.”
Court records describe how prosecutors say Rizzo bribed Macomb County public officials while building the business, and how he embezzled money from his company to bankroll the bribes.
Five weeks ago, prosecutors revealed that Rizzo and his father, Charles Rizzo, had reached plea deals.
Chuck Rizzo’s guilty plea completes a legal odyssey for the former trash company executive who has gone from star witness for the FBI to a target after he stopped cooperating with the government, fired his high-powered lawyer and got indicted in May.
Rizzo admitted conspiring with others to bribe Clinton Township Trustee Dean Reynolds and Macomb Township Trustee Clifford Freitas. The bribes were designed to influence or reward them in connection with municipal contracts for Rizzo’s trash-hauling company, prosecutors allege.
Chuck Rizzo gave approximately $50,000 to Reynolds and free legal services from 2012 to January 2016. The money was for Reynolds helping secure an extension of a township trash contract in February 2016, according to court records.
Reynolds, 50, is awaiting a trial that was tentatively scheduled for next spring. He was indicted in November 2016 and accused of taking $50,000 to $70,000 in cash from Rizzo in exchange for supporting the firm’s $3.5 million annual contract. He also was charged with taking $17,000 in cash from an undercover FBI agent.
Freitas, 44, struck a plea deal in June and could receive nearly three years in federal prison when sentenced Dec. 14.
Freitas was hired by Rizzo Environmental Services in early 2014 while serving on the Macomb Township board. The next year, the firm acquired the trash-hauling contract with Macomb Township.
Freitas abstained from voting on the contract, but Chuck Rizzo had promised to pay Freitas $35,000 and boost his salary if he used his elected position to help put the company’s fees on residents’ water bills. The move helped save Rizzo Environmental Services billing costs.
In November 2015, Chuck Rizzo had another employee, Quintin Ramanauskas, deliver a $3,000 bribe to Reynolds, according to the plea deal.
Chuck Rizzo also conspired to commit wire fraud from 2014 to 2016, prosecutors allege.
He and others embezzled hundreds of thousands of dollars from Rizzo Environmental Services and used the money to bankroll the bribes, according to court records.
At the time, a New York private equity firm owned 80 percent of the trash company.
“As part of the conspiracy, (Chuck Rizzo) caused fraudulently inflated invoices to be submitted to Rizzo Environmental Services to that the conspirators would then receive cash kickbacks from the money paid by the company,” prosecutors allege. “As part of the conspiracy, interstate email communication was used to conceal the various schemes from the New York private equity firm.”
Rizzo’s father is scheduled to plead guilty Nov. 17.
Chuck Rizzo was the subject of a court-ordered wiretap, admitted responsibility when confronted by the government and agreed to cooperate with an investigation that yielded indictments in fall 2016.
Chuck Rizzo resigned from his namesake company in October 2016, the same month it was acquired by Toronto-based GFL Environmental Inc.
Yet by spring, Chuck Rizzo had cycled through at least two lawyers — including Bloomfield Hills attorney David DuMouchel — and stopped cooperating with the government.
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 Detroit News.
After Chuck Rizzo stopped cooperating with investigators, he was indicted in May.
“The investigators sifted through volumes of evidence to unravel the multiple and complex schemes, which this group employed to conceal the scent of their illegal activity,” said Manny Muriel, special agent in charge of the Internal Revenue Service’s criminal division, in a statement.
Chuck Rizzo had help embezzling from the company.
Bloomfield Hills businessman Derrick Hicks was owner and CEO of Southfield-based ASAP Services Inc., which provided garbage carts to tens of thousands of homes serviced by Rizzo’s trash company.
Hicks cut a plea deal and is scheduled to be sentenced Nov. 14. Prosecutors want him to serve between 21-27 months in federal prison for helping embezzle more than $500,000.
Between 2013 and October 2016, Hicks has admitted committing wire fraud by embezzling money from Rizzo Environmental Services.
At the direction of Chuck Rizzo, Hicks inflated invoices to Rizzo Environmental Services that exaggerated the number of garbage carts delivered by ASAP Services, according to court records. The embezzlement totaled more than $500,000.
Hicks kept some of the cash and split the rest every week with Chuck Rizzo and Ramanauskas, according to the plea deal.
In October 2015, Hicks delivered $50,000 cash to Chuck Rizzo, according to a plea deal. The next month, he gave $3,000 to Ramanauskas.
While free on bond, Hicks has failed multiple drug tests and acknowledged using marijuana.
“Hicks’ repeated conduct in violation of this court’s orders, in contrast to these other defendants who strictly comply, should be considered in fashioning an appropriate sentence,” prosecutors wrote Tuesday.
rsnell@detroitnews.com
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