Federal court

Former Hialeah Mayor Robaina, wife found not guilty of tax evasion

 
 
FILE--Former Hialeah Mayor Julio Robaina and his wife, Raiza are shown in this April 23, 2013, file photo.
FILE--Former Hialeah Mayor Julio Robaina and his wife, Raiza are shown in this April 23, 2013, file photo.
ROBERTO KOLTUN / EL NUEVO HERALD STAFF

jweaver@MiamiHerald.com

A Miami federal jury on Tuesday found former Hialeah Mayor Julio Robaina and his wife, Raiza, not guilty on a slew of tax evasion charges.

It was a resounding victory for the Robainas, who had repeatedly blamed mistakes by their accountant for the failure to report some $2 million in income.

Federal prosecutors had declared them “tax cheats” through the two-week trial but the couple’s defense attorney had argued they were victims of an unscrupulous Ponzi schemer.

After the verdicts were read, the Robainas hugged supporters in the courtroom, with Raiza Robaina openly crying. Julio Robaina shook his lawyer's hand.

The Robainas’ trial, which has lasted more than two weeks, spotlighted Hialeah’s “shadow” banking industry of high-interest loans. As a sitting mayor, Robaina had loaned $750,000 to a Ponzi schemer who would eventually be convicted of swindling $40 million from the couple and dozens of other investors.

Prosecutors admitted that Luis Felipe Perez, the government’s star witness, was a “con artist” who hopes to obtain a reduction of his 10-year prison sentence for his jewelry investment scheme.

But they also revealed that Perez kept financial records showing he paid 36 percent interest on the loans from the Robainas, half in checks and half in cash — cash that prosecutors contend he kept secret from his wife.

The $300,000 in cash payments are just one chunk of some $2 million in income that prosecutors say the Robianas failed to report on income tax returns in a scheme to avoid taxes.

Assistant U.S. Attorney Richard Gregorie had told jurors on Monday that the mayor’s loan deal with Perez was a “shadowy business that had no business going on.” Julio Robaina, who made a small fortune during the real estate boom converting apartments to condos, used his profits to make high-interest loans through his wife’s two loan companies, MR Holdings and RVR Holdings.

However, the Robainas’ defense attorney, David Garvin, said that his clients were victims of “Hurricane Felipito,” who stole millions from them and others to buy a pair of homes in Miami Beach and Coral Gables, a fleet of cars including a Rolls-Royce, and diamonds and other jewelry.

“He had no heart, no conscience and no morals,” Garvin told the jurors.

Garvin insisted that the Robainas, who set up two loan companies registered to the wife so the husband could avoid a conflict of interest as mayor, charged Perez no more than 18 percent interest and never received cash payments from him.

“The whole Perez thing is a fabrication,” Garvin said.

Garvin tried to raise reasonable doubt among the jurors by suggesting that a Hialeah power broker named Rolando Blanco, who died in 2007, matched up Robaina and Perez and later pocketed whatever cash may have been delivered to the Blanco residence for the mayor to collect there.

But Gregorie told jurors that no evidence was presented at trial by either Perez or Blanco’s son, Roberto, or any other witnesses to support that claim. “There’s no one who came in here and said the Blancos are stealing your money,” Gregorie said.

The Robainas, whose closing arguments were attended by about 20 supporters, each faced tax-evasion conspiracy charges covering the period from 2005-10. They also faced two false tax-return offenses for 2006 and 2007, and additional counts of lying to federal authorities that the mayor had “no involvement” in his wife's loan companies. Julio Robaina is also charged with lying to authorities about never receiving any cash payments from Perez.

Robaina, 49, who ran for Miami-Dade County mayor in 2011 while under investigation, did not testify in his defense. Instead, he let his 40-year-old wife effectively speak for both of them, as she and the couple’s defense attorney blamed their accountant for “mistakes” on their tax returns.

If convicted, Robaina and his wife, who have five children, could have faced several years of prison.

At the closing arguments, Gregorie and fellow prosecutor Michael Davis slammed the Robainas for under-reporting income and over-reporting expenses in a “scam” run through the couple’s two loan businesses and the then-mayor’s company, Realty USA.

They argued that the most blatant tax violation was the couple’s failure to report an $800,000 payment that Robaina received from a Miami-Dade developer, Roberto Cayon, for lobbying the neighboring city of Hialeah Gardens in 2003. The payment was for the then-Hialeah Council president’s lobbying for a major residential project on a large parcel. It was eventually developed instead by Miami-Dade Schools.

Last week, Raiza Robaina, who was put in charge of the family’s household finances and the couple’s businesses, testified that her husband told her that she should be on the “lookout” for the $800,000 payment that was going to be deposited in their personal account at U.S. Century Bank in 2007.

Yet Raiza Robaina testified that she had no idea where the money came from or what her husband did to earn it, insisting that her husband did not tell her, nor did she ask him.

Gregorie, the prosecutor, told jurors that “$800,000 is like hitting the jackpot. You don’t ask where the money came from?”

Added Davis: “He doesn’t say a peep about the $800,000 from Roberto Cayon, and that’s because he’s hiding it.”

The wife later admitted that Julio Robaina told her to use the money to pay off a loan on the couple’s luxury Miami Beach condo and poolside cabana.

The prosecutors also highlighted a $300,000 payment that Julio Robaina received from another Miami-Dade developer, Robert Vinas, who testified that he did not remember what Robaina had done to earn the money.

The couple also did not report that income, and instead showed it as a loan to Julio Robaina’s company, Realty USA.

In addition, Robaina did not report a Ferrari that he received from his former real estate partnership, Prestige Builders Group, which paid off a $142,000 loan on the luxury Italian sports car in 2006 after he left the business. Robaina maintained it was a “gift” from a partner, Martin Caparros, but prosecutors argued it was income subject to taxes.

The prosecutors also hammered the couple for running personal household expenses through the company, such as gas, telephone and nanny services. The Robainas also expensed $6,500 in Miami Dolphins tickets and mayoral campaign costs.

Said Davis: “They used Realty USA as a shell company to hide personal and political expenses.”

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