Former Hialeah Mayor Julio Robaina had a reason he wanted to be paid in cash secretly on a high-interest loan to a convicted Ponzi schemer: He was spending the money on his mistress and needed to keep it secret from his wife, according to federal prosecutors.
Prosecutors claim that Robaina was paid more than $300,000 in cash by his close friend, Luis Felipe Perez, now in prison after pleading guilty to running a $45 million jewelry-investment scam. But in court papers, the prosecutors dont identify the alleged mistress on whom Robaina spent the cash payments.
The new evidence hidden from public view since last month because of a federal court order surfaced in the criminal tax-evasion case against Robaina and his wife, Raiza, on Monday, after a magistrate judge granted the Miami Heralds request to unseal certain documents.
The government expects its evidence to show that the cash interest payments were delivered to defendant Julio Robaina, rather than defendant Raiza Robaina, prosecutors wrote in a previously sealed February filing.
Last May, the Robainas were charged with conspiring to evade paying income taxes, failing to report secret cash payments and lying to federal authorities about their joint business that made more than $1 million in loans to Perez and other friends. Theyre also accused of underreporting hundreds of thousands of dollars in income between 2005 and 2007. The Robainas, who share the same criminal defense attorney, face trial April 10.
Federal prosecutors Richard Gregorie and Michael Davis have asserted since the couple was indicted that the two needed separate lawyers to avoid potential conflicts of interest, but the Robainas insisted they wanted to keep one defense attorney, David Garvin, to represent both.
The prosecutors raised the issue again last month in a motion that was sealed as a courtesy to Garvin after asserting that Robaina arranged to receive the alleged cash payments from Perez so he could secretly spend the money on his unidentified mistress.
Garvin insisted on keeping the governments motion under seal and Magistrate Judge Jonathan Goodman reluctantly agreed because the lawyer argued that if the allegations were made public, they would taint the jury pool and other witnesses in the case. As a result, two magistrate hearings, a district court hearing and a half-dozen documents were kept under wraps until a Miami Herald attorney, Scott Ponce off Holland & Knight, persuaded Goodman to unseal the records.
At a Feb. 25 closed-door hearing, Goodman made light of the fact that he was not dealing with matters of national security, drug-trafficking informants or trade secrets, but an alleged affair involving a one-time Hialeah mayor who ran unsuccessfully for Miami-Dade mayor in 2011.
Were talking about a situation that might be embarrassing to Mr. Robaina if word got out who knows if its true or not that some [witnesses] will say that he was apparently having an affair and wanted money delivered to him in cash because he wanted to keep it secret from his wife so he could use this money for his mistress, Goodman said at the hearing.
Garvin, the Robainas attorney, said that the alleged affair was not only embarrassing, but could also prevent his clients from receiving a fair trial.
Gregorie, the prosecutor, who took no position on keeping the matter off limits to the public until trial, said the former mayors arrangement with Perez, the convicted Ponzi schemer, put him at odds with his wife.
It is clearly inculpatory as to Julio Robaina and exculpatory as it to his wife, Raiza Robaina, Gregorie told the magistrate judge at the Feb. 25 hearing. We feel an obligation to notify the court and defense counsel of this difference between the two defendants.
At another closed-door hearing March 6, the Robainas both testified that they wanted to keep the same defense lawyer, Garvin, regardless of the alleged affair. As a result, the magistrate judge accepted their waiver of a conflict of interest.
Prosecutors claim that Perez, who is now serving a 10-year sentence, agreed to pay the couple 18 percent interest on more than $850,000 in loans.
Perez claims he made those payments in checks to the Robainas, but that he also had a side deal with the husband. He is expected to testify at their upcoming federal trial that, at Julio Robainas request, he arranged to pay an additional 18 percent interest in cash to the former mayor.
Perez claims he arranged to send the cash-filled envelopes with the initials J.R. written on them to the Hialeah home of the politicians benefactor, Rolando Blanco. Perez claims he went to these lengths because Robaina did not want his wife, Raiza, to know about the cash payments.
Blanco, who also loaned money to Perez, died in 2007. But Perez claims he continued to have the cash delivered to the Blanco residence after his death. Blancos son, Roberto, is also expected to testify that he handed the cash payments to Julio Robaina.
Both Perez, who is seeking to get his prison term reduced, and Blanco, who has immunity from prosecution, are expected to testify that Robaina arranged the cash payments so that his wife would not know about them and so he could use the extra money on his mistress.
Newly unsealed court records show that during a grand jury appearance in 2011, a prosecutor asked Roberto Blanco: OK. Did your father ever say anything to you about it, he uses it for his own purposes or maybe Mr. Robaina has a woman on the side or women on the side that he may use that money for?
Blanco replied: We spoke about it.
The prosecutor asked: Your father said that?
Yes, Blanco said.
At the closed-door March 6 hearing, both Robainas testified that Perez and Blanco were lying about the loan arrangement with the couple.
In just-unsealed court records, Mrs. Robaina said she viewed the two men as liars.