Disgraced Bell administrator Rizzo in court today
LOS ANGELES (CNS) – Robert A. Rizzo, the disgraced former top administrator in the city of Bell, made his first court appearance today since agreeing agreed to plead guilty to federal charges in a scheme that resulted in hundreds of thousands of dollars in unpaid federal income taxes.
In a plea agreement previously filed in U.S. District Court in Los Angeles, the 59-year-old Rizzo agreed to plead guilty to two felony charges — conspiracy and filing a false federal income tax return with the Internal Revenue Service.
Today’s court proceeding before U.S. Magistrate Margaret Nagle was only for preliminary matters, and Rizzo is not expected to formally enter the plea until early January, said Thom Mrozek, a spokesman for the U.S. Attorney’s Office.
According to federal prosecutors, Rizzo, sometime in 2002, created a corporation he 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 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.
Mrozek said that although Nagle set Rizzo’s bond at $25,000 and assigned the case to Judge Philip Gutierrez, federal prosecutors have told the court about the Melcher case before Judge George King.
Both judges are on vacation, but when they return, they will decide who will take Rizzo’s case, Mrozek said.
Rizzo answered “Yes, your honor,” to numerous questions posed to him by Nagle, including whether he understood he was waiving his right to be indicted by a grand jury as well as the travel restrictions that confine him to the continental U.S.
In a federal court document, Rizzo, who lives in Torrance, admitted that he created a corporation to fraudulently claim losses of more than $600,000 on his income tax return, which served to illegally reduce his tax liability on the income he was receiving from Bell.
As the city’s chief executive, Rizzo was taking in more than $1 million a year in illegal compensation, officials said.
In October, Rizzo pleaded no contest to 69 state charges brought against him in the massive public corruption case. 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 an eight- year maximum in the federal case, and between 10 and 12 years in the state case.
However, Mrozek said the federal court judge may allow Rizzo’s sentence in the tax case to run concurrently with the Superior Court matter.
As part of his plea agreement, Rizzo agreed to file amended individual and tax returns for the years 2006 through 2010 that will correctly report all income and expenses. He also agreed to pay all additional taxes and penalties, including the 75 percent fraud penalty.
As a result of their actions, Rizzo and his co-conspirators caused the IRS to suffer losses of more than $300,000, according to the government.
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. Sentencing is tentatively set for Jan. 22.
Five ex-Bell City Council members were found guilty in March in Superior Court on felony counts of misappropriating public funds.