Federal Indictment Snares Former Rizzo CEO, Towing Company Owner

(UPDATED) MACOMB COUNTY — The former CEO of garbage hauler Rizzo Environmental Services, Charles B. “Chuck” Rizzo was indicted Wednesday on five counts of bribery and three counts of conspiracy to commit bribery. The charges are in connection with garbage contracts in Clinton, Macomb, and Chesterfield townships, Acting United States Attorney Daniel Lemisch said in a news conference.

Also charged with bribery is towing company owner Gasper Fiore, 56, of Grosse Pointe Shores, Lemisch said in a news release. The indictment charges Fiore and former Clinton Township trustee Dean Reynolds, 50, of Clinton Township, with multiple counts of bribery and conspiring to commit bribery in order to secure a towing contract with Clinton Township sought by Fiore.

“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,” Lemisch said in the news release. “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.”

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In March 2016, Fiore allegedly paid a $4,000 cash bribe to Reynolds, and then another $3,000 in cash to Reynolds in May 2016. The bribes were paid by Fiore to Reynolds through Charles B. Rizzo, according to the news release.

The indictment also charges Charles B. Rizzo, 46, of Bloomfield Hills, and Fiore, as well as Rizzo’s father, Charles P. Rizzo, 70, of New Baltimore, and Derrick Hicks, 47, of Bloomfield Hills, with conspiracy to commit mail and wire fraud. In addition, Charles P. Rizzo is charged with seven counts of mail and wire fraud, and his son, Charles B. Rizzo, is charged with twelve counts of mail and wire fraud.

Federal authorities base the fraud charges on the defendants’ conspiracy involving at least ten different schemes to steal money from Rizzo Environmental Services between 2013 and 2016, a time when the majority owner of the company was a New York-based private equity firm.

At the time, Charles B. Rizzo, Charles P. Rizzo, Fiore, Hicks, and others schemed to steal hundreds of thousands of dollars from the company using a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies, and the stealing of money to pay for part of the construction costs of Charles B. Rizzo’s Bloomfield Township mansion, according to the news release.

Charles B. Rizzo and other conspirators then used some of the stolen money to pay bribes to public officials in order to maintain and secure additional municipal garbage contracts, Lemisch said in the news release. In conducting the embezzlement scheme, Charles B. Rizzo referred to the money embezzled and stolen from RES as “OPM”—“other people’s money,” according to the news release.

The indictment contains forfeiture provisions regarding more than $4 million that has thus far been seized by the government in the investigation, as well as seeking the forfeiture of the proceeds of the sale of the Rizzos’ minority interest in RES. The indictment also adds new bribery charges against Reynolds in connection with another municipality.

The indictment alleges that Reynolds conspired to commit bribery with former New Haven trustee Brett Harris, 57, of New Haven. According to the indictment, Reynolds introduced Harris to an individual who, unbeknownst to Reynolds and Harris, was an undercover federal agent.

Reynolds introduced Harris as a politician willing to take bribes, the news release said. The undercover agent proceeded to pay Harris $9,000 in cash bribes in return for Harris’ promise to help secure a garbage contract with New Haven. The indictment charges Reynolds with accepting multiple bribes from engineering contractor, Paulin Modi.

Reynolds allegedly took an $8,000 bribe from Modi in 2009 and another $8,000 bribe from Modi in 2013 in connection with securing the engineering contract for Modi for Clinton Township. Each bribery charge carries a maximum sentence of 10 years imprisonment and a fine of $250,000.

Each of the mail and wire fraud counts carry a maximum sentence of 20 years imprisonment and a fine of $250,000. The bribery conspiracy counts carry a maximum sentence of 5 years imprisonment and a fine of $250,000.

"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 Special Agent in Charge David P. Gelios, Detroit Division of the FBI, in the news release. "Today's indictments reflect the FBI's continued resolve to root out public corruption and to work with honest community leaders to restore the public's trust in their government officials and institutions."