Reuters: Bankruptcy News: Ex-mayor in Rhode Island handed 2-year prison term for corruption

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Ex-mayor in Rhode Island handed 2-year prison term for corruption Feb 12th 2013, 19:47 CAMBRIDGE, Mass. | Tue Feb 12, 2013 2:47pm EST CAMBRIDGE, Mass. Feb 12 (Reuters) - The former mayor of once-bankrupt Central Falls, Rhode Island, was sentenced on Tuesday to two years in prison for funneling work on foreclosed homes to a political contributor, a court official said. Former Mayor Charles Moreau pleaded guilty to federal charges of corruption in November, weeks after he resigned from office and admitted accepting kickbacks from his friend Michael Bouthillette in exchange for contracts to board up vacant homes in the financially troubled city. The former mayor said he circumvented a state requirement that the work be awarded through a competitive bidding process by declaring each home an emergency that needed to be boarded up immediately, prosecutors said in a statement. Between September 2007 and July 2009, Bouthillette boarded up at least 167 homes, earning "unreasonable profits" of hundreds of thousands of dollars, they said. Bouthillette said he rewarded Moreau three times with partial payment for a furnace for his house and renovations and flood remediation for another residence he owned. Moreau was sentenced to 24 months in prison followed by three years of supervised release, said Vickie McGuire, courtroom deputy at U.S. District Court in Providence. Bouthillette, who also pleaded guilty to corruption charges in November, was sentenced on Tuesday to 2,000 hours of community service and three years of probation. Both men had pleaded guilty to one count of federal program fraud, which carries a maximum penalty of 10 years in prison. Central Falls, Rhode Island's smallest city with about 19,000 residents, had 156 foreclosures in 2008 and 83 in 2009, according to bankruptcy court documents. In 2011, the city filed for bankruptcy, burdened by steep cuts in state aid, revenue shortfalls and unfunded pension and retiree healthcare liabilities of nearly $80 million. It emerged from Chapter 9 bankruptcy in October 2012 with a plan that proposes balancing the budget by slashing pensions and raising taxes but leaving bondholders unscathed. In December, residents elected a new mayor, James Diossa, who said in a statement on Tuesday that Moreau's sentencing "brings to an end a sad chapter in our city's history." "We must rededicate ourselves to building an honest and ethical city government that delivers city services to everyone equally, regardless of political affiliation or connection to City Hall," he said. Link this Share this Digg this Email Reprints

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