Detroit — Trash titan Chuck Rizzo will plead guilty to bribery and wire fraud conspiracy charges Thursday and agree to forfeit more than $4 million seized by investigators.
The deal was outlined in a criminal filing Tuesday for one of the key figures in an ongoing public corruption scandal that has led to criminal charges against 17 people – and 10 convictions.
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.
Court records describe how prosecutors say Rizzo, 47, of Bloomfield Township, bribed Macomb County public officials while building a trash-hauling empire, and how he embezzled money from his company to bankroll the bribes.
The details emerged Tuesday, two days before Rizzo, the former CEO of Rizzo Environmental Services, is scheduled to plead guilty in front of U.S. District Judge Robert Cleland.
Five weeks ago, prosecutors revealed that Rizzo and his father, Charles Rizzo had reached plea deals.
Chuck Rizzo’s guilty plea will complete 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.
An earlier 43-page indictment alleged Chuck Rizzo stole from his own company to bribe politicians while building his trash-hauling firm into a regional powerhouse spending some of the stolen cash building a $2.5 million mansion.
Rizzo conspired with others to bribe Clinton Township Trustee Dean Reynolds and Macomb Township Trustee Clifford Freitas, prosecutors allege. 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 almost 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, prosecutors allege. 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 prosecutors.
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 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.