The "Loose Change Gang" - the two City Hall employees accused of stealing quarters out of parking meters - is talking with federal prosecutors about a plea deal.
The talks are far enough along that James Bagarozzo and Lawrence Charles could plead guilty as early as this week.
"The parties have been diligently working together," Assistant U.S. Attorney Maura O'Donnell said in a recent court filing revealing the plea negotiations.
Bagarozzo and Charles, both longtime city employees, were arrested in December and accused of stealing money out of parking meters while working as parking meter mechanics for the city.
Both men are charged with theft of government property and are suspended without pay from their City Hall jobs.
Bagarozzo, who once served as head of the city animal shelter, is accused of stealing $210,000 over an eight-year period. Charles is accused of stealing about $3,300 over the course of a month.
Both men are scheduled to appear this week before U.S. District Judge Richard J. Arcara for what O'Donnell described as "plea proceedings."
The charges against Bagarozzo and Charles are the result of an FBI investigation and an even earlier investigation by the administration of Mayor Byron W. Brown.
It all started in October 2010, when Kevin Helfer, the former Common Council member who now serves as Brown's parking enforcement commissioner, noticed a huge difference in revenue collected from the city's 1,200 parking meters and revenue collected from the newer pay-and-display stations.
Helfer determined that the 128 pay-and-display stations, which cover 1,300 parking spaces, brought in an average of about $100,000 a month while the 1,200 individual meters brought in only $15,000 to $20,000 a month, according to court papers.
"I realized there couldn't be that amount of disparity between the two," he said last week.
Helfer said his suspicions led to an internal City Hall investigation that was authorized by Brown and included GPS devices, surveillance cameras and a private investigator who chronicled the thefts.
"Truthfully, he was great," Helfer said of the mayor. "He said, you have whatever resources you need."
The city's investigation, according to court papers, determined that Bagarozzo, who is accused of stealing considerably more money than Charles, removed fistfuls of quarters from the meters, stuffed them in his pocket and then deposited the quarters in a red-and-white bag in his city-owned vehicle.
He then stopped at his house for lunch, the papers allege, and took the bag inside.
When the investigation was complete, the city handed its evidence over to the FBI, which in turn confronted Bagarozzo at his home in December of last year.
Prosecutors say he admitted to systematically and continually stealing from the city since 2003 and that, during most of that time, he stole an average of $5,000 to $10,000 a year. They say he told FBI agents that his thefts escalated in 2009, when he began stealing an average of $1,000 a week.
Shortly after their interviews with the FBI, Bagarozzo and Charles were arrested and charged.
Over time, city officials say, it became clear how money was stolen from the meters Bagarozzo and Charles were authorized to repair.
They believe the meters were rigged in such a fashion as to prevent quarters from dropping into the lower, secured coin canisters that are removed when the meters are periodically emptied.
Instead, the quarters remained in the meter's upper compartment, making it possible for the mechanics to steal the coins.
City officials say Bagarozzo and Charles replaced the broken meters with functioning parts and simply moved the broken upper compartments to different meters. They say they found broken meters throughout the city.
If convicted, Bagarozzo and Charles could face up to 10 years in prison, though a more lenient sentence is likely, under federal sentencing guidelines.
They also could face dismissal from their City Hall jobs. Bagarozzo has been with the city since 1973 and Charles since 1994.
Charles' attorney could not be reached to comment, and Bagarozzo's attorney declined to comment.