The mayor of bankrupt Central Falls, R.I., resigned on Wednesday and agreed to plead guilty to corruption charges of accepting gifts in exchange for awarding a contract to board up foreclosed homes within the city.

The U.S. attorney’s office in Rhode Island, the state police and state attorney general say Charles Moreau, 48, mayor, for nine years, accepted kickbacks from longtime friend and businessman Michael Bouthillette for work on at least 167 properties in Central Falls between 2007 and 2009.

Prosecutors also charge Bouthillette with one count of giving gifts, valued at thousands of dollars. He, too, will plead guilty.

According to prosecutors, a joint investigation among the agencies revealed that beginning in September 2007, Moreau directed the boarding up of all vacant homes in the 19,000 population city and that Bouthillette do all the work. Court documents say Moreau circumvented bid requirements by declaring each vacant home an “emergency.”

Court documents allege that Bouthillette submitted an invoice to the city for a board-up, with a lien placed on the subject property for the amount of the invoice. As foreclosed properties were sold and the liens discharged, Central Falls would pay Bouthillette, prosecutors say. “This system allowed Mr. Bouthillette to make unreasonable profits amounting to hundreds of thousands of dollars,” U.S. attorney Peter Neronha said at an afternoon press conference.

Wednesday’s announcement came two weeks after 19,000-population Central Falls ended a 13-month stay in bankruptcy protection.

“Mr. Moreau took advantage of the city when it was at its most vulnerable,” State Police Supt. Steven O’Donnell said at a press conference. “The mayor took advantage of no-bid contracts to board up  vacant homes.”

According to O’Donnell, Moreau told one city worker who inquired about the matter to “mind his own blanking business.”

A message seeking comment was left with Moreau’s attorney, former House Speaker William Murphy.

Moreau resigned, effective at noon, in a terse one-sentence letter to Secretary of State Ralph Mollis that preceded the afternoon press conference.

“This investigation took as long as it did because we had to turn everything upside down and look under every rock,” Neronha said. “It was painstaking to get to the truth.”

He added: “This case ought to send a pretty clear signal. Public officials should do the public’s business and not their own.”

Prosecutors say that as reward to Moreau for providing him with the board-up work, Bouthillette helped Moreau obtain a furnace for the mayor’s Central Falls residence for which Bouthillette allegedly contributed at least a portion of the purchase price of the furnace, and renovated and provided flood-remediation work at a Moreau-owned Lincoln residence for which Moreau never paid. Investigators were also examining whether Moreau voted in Central Falls elections while actually living in Lincoln, R.I., according to the Providence Journal.

Neronha expects a sentencing recommendation to include jail time for both.

Under state receivership, Moreau’s position was reduced in July 2010 to part-time advisor, his salary slashed from $72,000 to $26,000.

Central Falls filed for Chapter 9 bankruptcy protection on Aug. 1, 2011. At the time, the city, 10 miles north of capital Providence faced an $80 million pension liability.

Judge Frank Bailey in Providence two weeks ago approved the city’s five-year financial recovery plan, making its exit all but official. Under that plan, Moreau’s pay was to be restored to just over $78,000 once the city reassumed control of its operations, tentatively scheduled for January.

The effect of Moreau’s resignation on local governance is unclear.

In October 2010, Moreau challenged the receivership law that stripped him of his duties, but lost appeals in both Superior Court and Rhode Island Supreme Court.

“Actually, it’s a good day for Central Falls,” state Attorney General Peter Kilmartin said at the press conference. “They’ve gotten rid of a corrupt administration. There’s new light at the end of the tunnel and it’s a bright light.”

Asked if he felt any relief, Kilmartin said; “My relief will come when the corruption ends, period. You want to relieve me? Let’s end the corruption, totally.”

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