UPDATE: Former Rizzo CEO pleads guilty to bribery and wire fraud
UPDATE: Charles Rizzo Jr., former CEO of Rizzo Environmental Services, pleaded guilty to conspiracy to commit bribery and wire fraud in Macomb County, MI on Nov. 9, as reported by The Detroit Free Press and other outlets.
Rizzo also admitted to embezzling hundreds of thousands of dollars between 2014 and 2016, when a New York equity firm owned a majority share of the company, in order to fund his bribes to local officials. As part of the plea deal, Rizzo will forfeit $4 million and cooperate with federal prosecutors. This deal is also reliant on his father pleading guilty in the coming weeks. If he does, the government will forgo their efforts to seize multiple family properties. If Rizzo can provide enough useful information, the government will also recommend that his potential sentence be reduced from 10 years to 6 years.
This is part of a much larger federal corruption investigation in the county that has resulted in criminal charges against 17 people. So far, 11 of them have entered guilty pleas. That list also includes Derrick Hicks, former owner and CEO of ASAP Services Inc., who helped Rizzo's embezzlement by inflating invoices for collection carts.
- The federal investigation into alleged corruption within Michigan's Macomb County has now expanded to include former leaders of Rizzo Environmental Services. Charles "Chuck" Rizzo Jr. has been indicted on five counts of conspiracy, three counts of conspiracy to commit bribery and twelve counts of mail and wire fraud. His father, Charles Rizzo, and a towing company owner, Gaspar Fiore, were also indicted, as reported by the Detroit Free Press and other outlets.
- In addition to potential bribery involving municipal contracts, the U.S. Attorney's of the Eastern District of Michigan also alleges that both Rizzos were embezzling money from the company while it was owned by a private equity firm. This allegedly involved "a fake legal settlement agreement, fraudulent consulting deals, cash kickbacks, shell companies, and the stealing of money" to pay for construction at Rizzo Jr.'s home, as well as bribe municipal officials.
- According to The Detroit News, this indictment may have been due to the fact that Rizzo Jr. recently stopped cooperating with the U.S. Attorney's Office in its investigation. The paper's sources indicate that he was a key factor in previous indictments of municipal officials, but changed his stance when it became clear that this cooperation might not be enough to avoid prison time.
Since initial charges were announced in the FBI's investigation eight months ago, the scope of these allegations has expanded greatly and tarnished the Rizzo name in the process. Rizzo Jr. resigned following details of a second indictment in October, and the company's role in this investigation became officially public in February, but until this week no criminal charges had been announced for the former executive. This latest announcement now puts the total numbers of municipal officials and other players involved at 12.
Details of this investigation further complicated contentious contract negotiations in Flint and put Canadian company GFL Environmental Services in a tough spot shortly after acquiring all of Rizzo's assets in early October. CEO Patrick Dovigi told Waste Dive the company was completely unaware of any legal issues during the acquisition process and spent many months reassuring local municipalities following the news. During a session at WasteExpo earlier this month, Dovigi called the situation "unfortunate" but said that "all in all as bad as it could have been it was a pretty good outcome in the end" because it gave him a chance to engage with customers more closely. Dovigi said that Rizzo signage has now been replaced with decals and about 25% of the fleet has been repainted.
These types of events serve to further perpetuate stereotypes about the waste industry that can make it hard for the general public to trust the process when it comes to claims about sustainability or anything else their service providers may be doing. While discussions continue about background checks and other systems to limit illegal activity, that may do little to stop actions by the leaders of companies or municipal officials in cases like this.
- Detroit Free Press Ex-trash firm CEO Chuck Rizzo, towing magnate indicted in bribery scam
- The Detroit News Rizzo star witness sours on feds, gets indicted
- U.S. Attorney Garbage Executive and Tow Company Owner Charged with Bribery and Fraud
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