FilAm city councilor pleads guilty to $2.36M bribery

California, USA – A Philippine-born former member of the Moreno Valley City Council has made history.

Marcelo Co, 64, has agreed to plead guilty to a federal bribery charge for taking a US$2.36 million cash payment from an undercover operative posing as a real estate broker, according to the US Attorney’s Office, Central District of California.

“The bribe is believed to be the largest ever accepted by a US public official in an undercover operation,” said Thom Mrozek, spokesman for the US Attorney’s Office.  

Co was charged November 5, with one bribery count and one count of filing a false corporate tax return.

Brazen

“Mr Co orchestrated an elaborate and brazen scheme,” said US Atty. Andre Birotte Jr, at a press briefing, “to undermine the democratic process in Moreno Valley. Whether he was motivated by power or greed, these crimes constitute a wholesale violation of his oath to work for the citizens who elected him.”

The court documents filed November 5, according to the US Attorney’s Office, outline a bribery scheme in which Co told a businessman and an undercover FBI operative posing as a real estate broker that he would control a voting majority of the Moreno Valley City Council and would be able to guarantee land use decisions that would benefit the businessman and the land broker.

Co allegedly also promised to always vote in favor of land use decisions that would benefit the real estate broker. Co allegedly solicited campaign donations from the businessman, who was cooperating with the investigation, and the FBI undercover operative. Co allegedly eventually received payments of $5,000 and $10,000 that he said were to be used to finance the campaigns of individuals who would vote with him on land use issues.

“It is a very sad day for the citizens of Moreno Valley when one of their elected council members sacrifices his legal and ethical obligations for power and greed,” said Riverside County District Attorney Paul Zellerbach. “This type of unlawful conduct by Mr Co undermines the very fabric of good government and what we all hope and expect from our elected officials.”

Tax Charge

The tax charge that was filed concerns a United States Corporation Income Tax Return (Form 1120) that Co, who immigrated to the United States in the 1980s, filed for his company Qwik Pack Systems for tax year 2010. In that filing with the IRS, Co failed to report well over $100,000 in income. This tax charge is not related to the bribery scheme. Authorities alleged that Moreno Valley Mayor Tom Owings and Councilman Jesse Molina received $3,000 each from Co’s company in 2012.

“Mr Co’s intentional omission of more than $112,000 in taxable income,” said Joel P. Garland, Acting Special Agent in Charge for IRS-Criminal Investigation, Los Angeles Field Office, “and failure to pay $31,000 in tax to the IRS was committed for his own private gain and was an insult to honest taxpayers and the citizens of Moreno Valley. Today’s action is an example of IRS-CI’s vigilance when it comes to enforcing tax laws, particularly when it involves our public officials. IRS-CI, in partnership with our law enforcement partners, is committed to bringing to justice public officials who use their political office to commit crimes.”

In court documents filed November 5 in the US District Court, Co agreed to plead guilty to the two charges that could send him to federal prison for as long as 13 years. He is expected to make his initial court appearance in the federal bribery case early in December. The case will be assigned to a district judge who will schedule a hearing for Co to formally enter the guilty pleas.

Welfare fraud

Co was elected to the city council November 2010 for a 4-year term but resigned August 13, after he was charged the day before, in state court, in an unrelated welfare fraud case. That case allegedly involved stealing government aid of about $15,000 intended to be used to care for his mother, who resided in the Philippines and Taiwan. According to authorities, Co was collecting In-home Supportive Services but was not providing services to his mother, who was out of the country.

The case against Co is the result of an ongoing investigation by the Inland Regional Corruption Task Force, which is composed of prosecutors, agents, and investigators from the Federal Bureau of Investigation, IRS-Criminal Investigation, the Riverside County District Attorney’s Office, and the United States Attorney’s Office.

Sting 

Bill Lewis, assistant director in charge of the FBI’s Los Angeles Field Office said that “Mr Co regularly traded votes, land, and confidential information in exchange for cash to fund his personal bank account, rather than what was in the best interest of the residents of Moreno Valley. This case was a result of seamless collaboration by the Inland Regional Corruption Task Force, whose members share a mission of rooting out corruption across the Inland Empire.”

In the fall of 2012, according to authorities, Co met with the undercover operative to discuss a multi-million-dollar sale of a 30-acre parcel that he owned. Co allegedly told the real estate broker that once he had control of the city council, he could change the zoning of the property, and the land value would dramatically increase. With the city council election in November 2012, Co allegedly told the undercover investigator that he had the votes to alter the zoning and increase the value of Co’s 30-acre parcel, which had been appraised at $710,000. Co allegedly proposed that the undercover operative purchase the property for $5.36 million, which would include a cash payment of $2.36 million.

At a meeting January 30, in Temecula, Calif, caught on video (aired by CBS) Co was seen seated with millions of dollars on the table in front of him. Faces of the undercover FBI agent and informant were covered. Co allegedly agreed to sell the property for $5.36 million, but that the publicly filed documents would reflect a sale price of only $3 million. At the sting operation, after Co accepted the $2.36 million in cash, FBI agents quickly moved in as he started to leave. They confiscated all the money.

Mrozak stated that Co has agreed to work with the FBI and was, therefore, not arrested, according to authorities. – Rappler.com

This article was republished with permission from Philippine News, a content partner of Rappler