Former Moreno Valley councilman to plead guilty in bribery case

The Moreno Valley city councilman leaned back in his chair, his hands resting on his head as he took in the sight of stacks of bills — $2.3 million worth — piled on the table in front of him.

On that January day, Marcelo Co looked relaxed as he closed a lucrative deal to deliver the necessary vote to rezone a parcel of land, believing he had accepted a bribe from a real estate broker, federal prosecutors said.

But the broker was actually an undercover federal agent, and the transaction — one that authorities believe to be the largest bribe accepted by a public official in a sting operation in the United States — was captured on camera.

He would be confronted by agents moments later.

On Tuesday, federal prosecutors announced that Co — who resigned last summer in the wake of unrelated legal trouble — has agreed to plead guilty in what they described as the first criminal case to emerge in a months-long corruption investigation in the Riverside County city.

The charges filed against Co, 64, offered a glimpse into a probe that many in the city were aware of after federal agents searched the homes of local politicians and subpoenaed records. But the locals have largely been in the dark about the case as investigators remained tight-lipped about its scope.

Co has been charged with one bribery count and another count of filing a false tax return, local and federal officials said at a news conference Tuesday in Riverside. He is set to make his initial court appearance in December and could face up to 13 years in federal prison, prosecutors said.

U.S. Atty. Andre Birotte Jr. called Co’s crimes an “elaborate and brazen scheme to undermine the democratic process in Moreno Valley.” Birotte added that it “speaks volumes about the magnitude of what’s going on.”

In exchange for money, prosecutors said, Co promised that the majority of the council would vote in favor of changing the zoning on a piece of land, significantly elevating its value. The land had been valued at about $710,000, but through Co’s plan, the value would have jumped to more than $5.3 million. That value would include a publicly listed price of $3 million, plus the under-the-table cash payment, authorities said.

Timothy Delaney, a special agent in charge of the FBI criminal division in Los Angeles, said Co took his council duties “as seriously as if he were playing a game of Monopoly.”

Co has also agreed to plead guilty to lying on tax filings, a charge separate from the bribery case. For the 2010 tax year, IRS officials said that tax returns for his business, Quik Pack Systems, stated the company had taken in $146,500, although he allegedly knew that figure was, in fact, at least $258,000.

Co was elected to the council in 2010 and became mayor pro tem in January.

He resigned in August when he was charged with fraudulently collecting nearly $15,000 in home health services intended for the care of his mother, although he often sent her to the Philippines, where she was cared for by his siblings, court records state. He is set to be arraigned in that case this month.

In the bribery case, Co has agreed to cooperate in the ongoing corruption investigation, according to the plea agreement.

The investigation — a joint effort of local and federal authorities — first gained attention in April, when federal officials confirmed that warrants had been issued to search the homes of the mayor, council members and the office of a developer. Authorities have revealed little about the investigation, and the case has been sealed.

Last month, investigators requested documents related to elected officials — including the mayor, mayor pro tem and the three City Council members — as well as those related to development projects and employment records for specific city workers, according to a detailed listing of the subpoenaed items in a memo sent by City Manager Michelle Dawson to employees.

The FBI, through a spokeswoman, declined to confirm or deny whether subpoenas were issued.

The city manager was also called recently to testify before a grand jury.

Last week, the city announced what it called a move toward more transparency by launching a page on its website that would serve as a clearinghouse for updates on the investigation. On Tuesday, city officials released a brief statement acknowledging they knew charges had been filed and said the city would “continue to cooperate fully” with the probe.

At the news conference, prosecutors declined to say whether others in the city would be charged. The only indication they offered Tuesday was that it was far from over.

“We’re going to go where the evidence takes us,” Birotte said.

rick.rojas@latimes.com