When several Hialeah politicians and others entangled in the tax-evasion case of former Mayor Julio Robaina were served with federal subpoenas this week, it stirred speculation that the criminal investigation was widening at City Hall.
In reality, those served are viewed as key witnesses by the U.S. attorney’s office, as prosecutors prepare for Robaina’s trial, scheduled for early November.
Among those subpoenaed to testify: Hialeah Councilwoman Vivian Casals-Muñoz, who notarized financial documents for Robaina; former Councilman Guillermo “Willie” Zuñiga, who borrowed money from Robaina; and political insider Roberto Blanco, who allegedly delivered cash-filled envelopes to Robaina as payments from a convicted Ponzi schemer who borrowed large sums from the former mayor.
Current Mayor Carlos Hernandez, who also loaned money to the same investment scammer, has not been subpoenaed, according to his chief of staff, Arnie Alonso.
In May, a federal grand jury indicted Robaina, 48, and his wife, Raiza, 39, on charges of failing to report cash payments on loans totaling more than $1 million and other business income. Both also are charged with lying to federal agents about Robaina’s involvement in his wife’s two lending businesses; Robaina was charged with lying about receiving the undisclosed cash.
The Robainas have denied any wrongdoing, saying that they will be vindicated at trial.
The couple is accused of receiving the cash as interest on personal loans they made to friends, including convicted businessman Luis Felipe Perez, who borrowed $750,000 at what he says was a 36 percent interest rate.
Perez, who blew much of the money on a jewelry investment racket, is expected to testify for federal prosecutors at the Robainas’ trial. He is serving a 10-year-sentence in a South Carolina federal prison, but hopes to get that punishment reduced with his testimony against Robaina.
Miami defense attorney David Garvin, who is representing both the husband and wife, complained to U.S. District Judge Ursula Ungaro this week that prosecutors dumped some 225,000 documents on him without identifying which ones would be used for trial. Ungaro ordered the prosecutors to respond to Garvin’s motion to sort out the paper record by Monday.
The government’s case revolves around a series of loans the Robainas doled out as part of an informal banking system operating below the radar in Hialeah. They came to light during Julio Robaina’s unsuccessful bid for county mayor in 2011.
The main conspiracy charge in the indictment, filed by prosecutors Richard Gregorie and Michael Davis, accuses the Robainas of overstating losses on their businesses and understating gains in their personal income between 2005 and 2007.
It charges that the couple’s reported income swung wildly from a loss of $62,015 in 2006 to a gain of $1,023,672 in 2007, when they knew their “total income was greater than reported” in both years.
In 2010, Robaina’s longtime friend, “Felipito” Perez, was convicted of directing a $45 million Ponzi scheme that duped dozens of investors and lenders, including Robaina, celebrity hairdresser Samy Suarez, then-Hialeah Council President Carlos Hernandez, Hialeah Chamber of Commerce head Daniel Hernandez and Manny Alfonso, a board member of the charity La Liga Contra el Cáncer.
The Internal Revenue Service began investigating Robaina’s finances while authorities were making their case against Perez.
Under federal law, if a person receives an interest payment on a loan, the income must be reported to the IRS and may be subject to taxes.
Perez claimed he paid Robaina a combined interest rate of 36 percent. Perez said half the payments were made in checks and the other half in cash, until he ran out of money in 2009.
He said he directed his drivers to deliver the cash in envelopes — with the mayor’s name or initials written on them — to the home of the late Rolando Blanco, their mutual friend.
Blanco’s son, Roberto, testified about the alleged payoff arrangement before a federal grand jury in Miami in 2011, according to sources. Roberto Blanco, who also borrowed money from Robaina, received immunity from prosecution, the sources said.