Mayor of Central Falls, R.I.,quits and pleads guilty Wed Sep 19, 2012 2:37pm EDT (Reuters) - Charles Moreau, the mayor of impoverished Central Falls, Rhode Island, resigned on Wednesday and agreed to plead guilty to federal fraud charges. Moreau submitted his resignation to the Rhode Island Secretary of State early on Wednesday. A few hours later, federal prosecutors charged him with fraud and filed his plea deal with the U.S. District Court in Rhode Island. Beginning in 2007, as the number of foreclosed homes in the city began to surge, Moreau directed all of the boardup work to go to his long-time friend and political contributor, Michael Bouthillette, prosecutors said in a two-count charging document. Moreau did not answer his phone, and his lawyer did not reply to a request for comment. Moreau and other local elected leaders were stripped of power when a state-appointed receiver put the city into bankruptcy in August 2011. Central Falls, the smallest city in the smallest state in the United States, won approval of Chapter 9 bankruptcy plan on September 6. The plan calls for the state-appointed receiver to retain oversight while passing power back to elected officials no sooner than January. Gayle Corrigan, who runs the city day-to-day as the receiver's chief of staff, said that attorneys were reviewing the city's charter and Rhode Island's receivership law to determine the next step to fill the now vacant position. Reporting by Hilary Russ; Editing by Leslie Gevirtz