Former Bell city administrator Robert Rizzo pleaded guilty to two felony charges of illegally avoiding paying federal income taxes, the United States Attorney's Office announced Thursday.
The federal charges are separate from 69 state public corruption charges to which Rizzo pleaded no contest in October for receiving an inflated salary and other money while governing the city of Bell. He will be sentenced in March on the state charges.
Rizzo, 59, allegedly failed to pay hundreds of thousands of dollars in federal income tax and faces up to eight years in federal prison. In his plea agreement, filed Thursday in U.S. District Court, Rizzo pleaded guilty to felony charges of conspiracy and filing a false federal income tax return, according to a statement from the U.S. Attorney's Office.
“It is regrettable that some public officials believe they are above the law,” said IRS Criminal Investigation Chief Richard Weber, according to the statement. “Instead of filing accurate tax returns, Mr. Rizzo claimed bogus corporate losses on his income tax return to illegally reduce his tax liability. Pursuing public servants who corruptly endeavor to circumvent the tax laws to fund their lavish lifestyles is a top priority for IRS Criminal Investigation.”
Rizzo also admits to creating a corporation to fraudulently claim losses on his income tax return and reduce his tax liability, according to the statement. The corporation, R.A. Rizzo Incorporated, was created in 2002 with the help of his tax preparer, Robert J. Melcher. Melcher pleaded guilty to aiding and abetting the filing of a false tax return, the statement says.
According to the U.S. Attorney's Office, Rizzo claimed fraudulent losses through his company's tax return of $409,731 for 2006 through 2009. Rizzo also admits in the plea agreement to using a corporate account for $200,000 in personal expenses.
As part of the plea agreement, Rizzo agreed to file amended personal and corporate tax returns for 2006 through 2010, and he now has to pay the extra taxes plus penalties.
KPCC's Nick Roman spoke Thursday with the current mayor of Bell about how the city has fared since the scandal.
"What happened before is, the city manager had control over the city. We didn't have no democracy. The city belonged to him, and now things are completely different," said Bell Mayor Violeta Alvarez. "Now the city is back to the community where it belongs."
You can listen to more of the interview with Alvarez here.
Rizzo's attorney could not be reached for a response.
This story has been updated.