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Former Moreno Valley Councilman Pleads Not Guilty To Welfare Fraud

LOS ANGELES (CBS/AP) — A former Moreno Valley councilman Wednesday pleaded not guilty to state welfare fraud charges.

Marcelo Co, 64, was arrested in August on charges of stealing more than $14,000 in government aid intended to be used to care for his mother.

He is due back in court on Dec. 18 and is currently free on $15,000 bond.

Co also faces several federal grand theft charges in an unrelated case in which he is accused of taking a $2.36 million cash payment from an undercover operative posing as a real estate broker.

Thom Mrozek, a spokesman for the U.S. Attorney's Office, says the bribe is believed to be the largest ever accepted by a U.S. public official in an undercover operation.

Earlier this month, federal prosecutors said that Co will plead guilty to one count each of bribery and filing a false tax return.

Prosecutors say Co agreed to sell a 30-acre property for $5.36 million at a meeting on Jan. 30 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, promising to rezone the land, prosecutors said.

Court documents filed on Nov. 5 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, prosecutors said.

Co also promised to always vote in favor of land-use decisions that would benefit the real estate broker, a U.S. Attorney's Office spokesperson said.

Court documents allege Co had a plan to cover his tracks, with the four council members rotating their "no" votes so it would appear they did not always vote uniformly.

Four of the five sitting council members' homes were searched in April, according to Michele Patterson, Assistant to the City Manager. All four remain under investigation.

If the plea deal is approved, Co could face 13 years in prison. He has also agreed to testify at any further trial associated with the investigation.

(TM and © Copyright 2013 CBS Local Media, a division of CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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