Businessman Paid for Elected Official’s Divorce in Exchange for Lucrative Contracts
Three people—an attorney, an elected official, and a businessman—engaged in an outrageous corruption scheme that involved paying for an elected official’s divorce. But an FBI investigation thwarted their efforts.
Agents opened a case in 2014 after receiving a lead. Established sources reported large-scale corruption involving the garbage, construction, and engineering industries in the suburbs north of Detroit. The case began there, where public official Dean Reynolds was caught extorting people and selling his votes.
“We were able to intercept him in real time accepting and demanding bribes,” said Special Agent Robert Beeckman, who investigated this case out of the FBI’s Detroit Field Office. Agents also saw Reynolds accepting a cash delivery. As a local legislator in the 10th largest Michigan municipality, Reynolds used his connections for capital gain.
Reynolds made sure to have connections in the garbage industry, one of the township’s biggest expenses. On the other end of several phone calls was Chuck Rizzo, president of Rizzo Environmental Services, Inc. Rizzo’s company had one of the largest and most lucrative garbage businesses in Southeast Michigan. He offered Reynolds bribes to secure favorable contracts. He spoke specifically about securing Reynold’s vote on an $18 million contract.
In exchange for the lucrative contract, Rizzo paid Reynolds’ divorce expenses.
Rizzo asked his lawyer Jay A. Schwartz to provide a variety of services, including advice about how to commit bribery and divorce counsel for Reynolds. Schwartz agreed. A subpoena of his billing software confirmed that $40,000 worth of legal services were provided for free.
As the divorce went on, Reynolds fought a custody battle that required a psychological evaluation. Another wiretap caught Schwartz proposing that a third party could pay for it; however, that person needed to have one very crucial ability.
“[Schwartz] talked about finding a third party who could hold up on the witness stand if ever questioned under oath about where the money came from. You have an attorney, an officer of the court, proposing a bribery scheme with a view towards perjury if necessary…hiding it from a judge,” Beeckman said. Schwartz swindled an unsuspecting family friend into the scheme.
Schwartz was sentenced to 27 months in prison and fined $250,000. Rizzo was sentenced to 66 months in 2018. In 2019, Reynolds was sentenced to 17 years in prison. A total of 22 people were indicted in the scheme.
The FBI prioritizes these cases because systemic corruption can cause a domino effect leading to general mistrust of authority.
“There are places in the world that have given up. They have corruption at such a level that their governmental systems have completely failed,” Beeckman said. “The public there has no confidence in the people who run their country. We’re not there in this country, and we have no intention of getting there.”
Bribery is a federal crime. If you suspect it, contact the FBI.
A common worry is that if you submit a tip, you will be the sole cause of an open investigation about a public official. This is not accurate. Beeckman confirmed that a public corruption case cannot be opened based on a single source.
“No detail is too small. You could be the person who supplies the last bit of information that we need—the puzzle piece that makes it all make sense,” he said.