U.S. Attorney's Office
Central District of California
(213) 894-2434
June 1, 2015

Former Member of Moreno Valley City Council Sentenced to Five Years in Federal Prison for Taking $2.3 Million Cash Bribe

RIVERSIDE, CA—In a case stemming from what is believed to be the largest bribe ever accepted by a public official in an undercover operation, a former member of the Moreno Valley City Council was sentenced this afternoon to 60 months in federal prison for taking a $2.36 million cash bribe from an undercover operative posing as a real estate broker.

Marcelo Co, 64, was sentenced this afternoon by United States District Judge Jesus G. Bernal. Co pleaded guilty last year to one bribery count and one count of filing a false corporate tax return.

The case against Co was the result of an investigation by the Inland Regional Corruption Task Force, which is comprised 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.

Co was elected to the Moreno Valley City Council in November 2010 and resigned from his seat in August 2013 after being charged in state court in an unrelated case. Court documents filed in the federal case 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 also promised to always vote in favor of land use decisions that would benefit the real estate broker.

Co solicited campaign donations from the FBI undercover operative and the businessman, who was cooperating with the investigation. Co 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.

In the fall of 2012, Co met with the undercover operative to discuss a multimillion dollar sale of a 30-acre parcel that he owned. Co 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 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 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 on January 30, 2013, Co 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 this meeting, Co accepted $2.36 million in cash.

The tax charge concerns a federal Corporation Income Tax Return (Form 1120) that Co 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.

Co must surrender himself to authorities on October 30 to begin serving his sentence.

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