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Rizzo pleads guilty to tax fraud, phony losses on horse ranch

This post has been updated. Please see below for details.

Robert A. Rizzo, the former Bell city administrator who oversaw an era of corruption, pleaded guilty Monday to two federal tax charges.

[Updated 12:20 p.m. PST Jan. 13: Dressed in a blue blazer and gray slacks, Rizzo repeatedly said "Yes, your honor," as he agreed to plead guilty to filing a false tax return and conspiring to file a false tax return.

Rizzo, who already faces a potential 12-year sentence on corruption charges, could get up to eight years in federal prison and a $500,000 fine on the tax case.]

Once the top administrator in Bell, Rizzo was earning more than $1 million a year when he was ousted from his job after his generous salary and benefits package was revealed in 2010.

The tax case alleged that he further inflated his take-home pay by claiming more than $770,000 in bogus losses on his tax returns.

FULL COVERAGE: Corruption in Bell

Much of the money he was accused of claiming to have lost was tied to a horse-racing enterprise that he ran out of his weekend ranch outside Seattle.

Rizzo, according to the charges, illegally claimed losses of $409,731 between 2006 and 2009 by falsely claiming his horse ranch outside Seattle as rental property. He also admitted in a plea agreement that he paid for more than $80,000 in personal expenses in 2009 and $120,000 in construction work on his Huntington Beach home in 2010 while claiming they were used for his horse ranch.

The former city administrator also agreed in the plea agreement to cooperate with federal authorities.

The charging document also appears to refer to Angela Spaccia, the former second-in-command of the city in Los Angeles County, and Rizzo’s attorney said he expects that she will be indicted, though that has yet to happen.

Though Rizzo became the face of the salary scandal in Bell, he is the lone figure in the case to avoid going to trial. He pleaded no contest to 69 felony counts of corruption last October and then announced that he also would plead guilty to conspiracy to file false tax returns.

Los Angeles Superior Court Judge Kathleen Kennedy has already said she would allow him to serve his sentence on the corruption charges in federal prison concurrent with the time he received on the tax charges. He faces up to 12 years on the corruption charges.

Spaccia faces a similar fate, though it is possible her sentence could be longer because she never agreed to cooperate with authorities. She was convicted on 11 felony corruption-related counts in December and was immediately taken into custody.

Spaccia was the last figure in the Bell scandal to be convicted.

Of the eight people arrested in the case – Rizzo, Spaccia and six former council members – all but one were convicted. One former council member was acquitted.

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