Federal investigators have opened a second criminal probe of U.S. Rep. David Rivera, examining undisclosed payments from a Miami gambling enterprise to a company tied to the Republican congressman, The Miami Herald has learned.
Agents with the FBI and the Internal Revenue Service have begun interviewing witnesses knowledgeable about a $1 million consulting contract between Flagler Dog Track — now known as Magic City Casino — and Millennium Marketing, a company co-owned by Rivera’s 70-year-old mother and her business partner, according to sources familiar with the investigation.
The involvement of the IRS, and the questions agents have asked, indicate Rivera is the subject of an income-tax evasion inquiry.
In the next few weeks, federal agents are scheduled to interview Lori Weems, a lobbyist and lawyer who drafted the consulting contract while representing the Magic City Casino, sources said. Earlier this year, FBI agents also interviewed Esther Nuhfer, a Miami lobbyist and political consultant with close ties to Rivera, sources said.
The Havenick family, which owns the casino, have also spoken to investigators. A number of other lobbyists and consultants have also been interviewed by state investigators.
Both the FBI and the IRS declined to comment on the case.
Rivera has long denied wrongdoing. Through his campaign, Rivera said in a Thursday email that he has not been contacted by federal investigators, and said that he has never received “income” from the casino or Millennium Marketing.
The previously undisclosed federal investigation is separate from a state probe of Rivera’s finances launched by the Miami-Dade State Attorney’s Office and the Florida Department of Law Enforcement last year, shortly before Rivera was elected to Congress. However, state investigators have also examined the dog track payments, sources have told The Herald.
Roberto Martinez, an attorney for Magic City, would not discuss details of either of the investigations.
“We are continuing to fully cooperate with law enforcement, who have told us that we are merely potential witnesses,” Martinez said.
The cloud of investigations has battered Rivera’s political standing since he took office in January, representing a congressional district stretching from western Miami-Dade to Collier County.
Rivera, a former state lawmaker, was once a fundraising powerhouse — he raised a record $1 million for a state Senate race he abandoned to run for Congress — but his donations while in Washington have been modest. In the second quarter of this year, Rivera raised just $33,500 — and $10,000 of that was donated by his mother and her business partner. He reported $62,000 in cash in the bank, but almost $152,000 in campaign debts and obligations, records show.
The focus of the federal probe is Rivera’s work on behalf of the Magic City gambling company from 2006 to 2008 — work that Rivera did not publicly disclose.
Lawyers for Magic City have said they sought to hire Rivera in 2006 to manage a political campaign to win voter approval of casino-style slot machines at Miami-Dade pari-mutuels. Voters approved the measure in January 2008.
Instead of hiring Rivera directly, the gambling company signed a contract in October 2006 with Millennium, a company founded one month earlier by Ileana Medina, a property manager at a Doral condominium and a frequent business partner of Rivera’s mother, Daisy Magarino, records show.
When first asked about the contract last year, Rivera said he was “designated” by Millennium to work on the Magic City campaign.
But Martinez told The Herald last year that it was Rivera who first approached the dog track about running the pro-slots campaign, and it was Rivera who suggested that the contract go through Millennium. Dog track officials had no contact with Medina or Magarino during the contract negotiations, Martinez said last year. Rivera signed the 2006 contract with Magic City along with Medina, records show.
Neither Magarino, who now is Millennium’s vice president, nor Medina could be reached for comment.
Under the contract, Rivera was to be the “Top Leader of Chain of Command” of all political consultants and strategists involved in the $6.7 million slots campaign. But the payments under the deal, totaling $510,000, all went to Millennium.
In February 2008 — just days after the successful slots referendum — Rivera sponsored a bill in the legislature that would have nullified the referendum and banned slots from Miami-Dade County and other areas. Millennium received $460,000 in fees after Rivera filed that bill, which did not pass.
Martinez said last year that dog track officials were not aware of Rivera’s bill and they never discussed it with him.
The contract also called for an additional $500,000 “success fee” to Millennium if and when slots machines won approval, records show. At the time, however, neither Rivera nor Millennium made a claim for the fee.
But in recent weeks, Millennium’s officers formally requested the $500,000 success fee from the Magic City Casino, according to Herald news partner WFOR/ CBS-4. It is unclear who made the request on behalf of the company.
Rivera initially denied getting paid to work on the slots campaign while in the Legislature and during his campaign for Congress last year. An executive with the company also initially denied hiring Rivera when interviewed by The Herald last year.
But after winning his congressional seat in November — and after the Millennium contract with Magic City came to light — Rivera admitted receiving $132,000 in “loans” from Millennium that he had never previously disclosed. Rivera first acknowledged the money by revising his federal financial disclosure forms just before taking office as a congressman in January.
Rivera had earlier changed his state legislative disclosure forms, erasing any reference to his work with the U.S. Agency for International Development, after the Miami Herald reported that USAID had no record that he ever worked for the agency.
Rivera has said he was not obliged to report the $132,000 in loans from Millennium on his state financial disclosure forms, though state law requires disclosure of most debts over $1,000.
Rivera also has said he repaid the loans from Millennium, in part by signing over a deed for a condo unit he owned days after he won the election in November.