Miami-Dade County

April 24, 2014

Robaina’s wife grilled at couple’s tax-evasion trial

A federal prosecutor accused the former mayor of Hialeah and his wife of defrauding the U.S. government and running a ‘scam’ at their Miami tax-evasion trial.

After Julio Robaina was elected mayor of Hialeah in late 2005, he put his wife in charge of his real-estate and loan businesses so he could avoid any conflict of interest, according to the couple.

So, in early 2007, the mayor informed Raiza Robaina that she should be on the “lookout” for an $800,000 payment that was going to be deposited in their personal account at U.S. Century Bank.

Yet on Thursday, Raiza Robaina testified at the couple’s federal tax-evasion trial in Miami that she had no idea where the money came from or what her husband did to earn it. “Both of you knew where he got the $800,000,” Assistant U.S. Attorney Michael Davis said on cross-examination.

“That is not true,” she responded, insisting that her husband did not tell her, nor did she ask him.

The wired money transfer came from Miami-Dade developer Roberto Cayon, who paid that large sum to Julio Robaina for lobbying the neighboring city of Hialeah Gardens to support a major real-estate project. Raiza Robaina testified Thursday that her husband only told her to use Cayon’s payment to cover the couple’s mortgage on a luxury Miami Beach condominium and poolside cabana.

But according to prosecutors, the Robainas did not report Cayon’s payment on their 2007 tax return — part of $2 million in total earnings that the couple allegedly failed to disclose between 2005 and 2010. Moreover, the Hialeah mayor did not report his role in Cayon’s development project on his 2007 financial disclosure form, which must be filed yearly, records show.

Julio Robaina, 49, did not testify in his defense. Instead, he let his 40-year-old wife effectively stand in as a buffer for him and as a witness for both of them, as she blamed the couple’s accountant for the “mistakes” on their tax returns. Prosecutors will call rebuttal witnesses on Friday, and closing arguments will take place Monday.

At one point Thursday, Raiza Robaina declared that she and her husband have always paid their taxes, but then she blurted out: “I don’t even know why this is a criminal case. It’s a civil case.”

After prosecutors objected, U.S. District Judge Ursula Ungaro warned Raiza Robaina: “Don’t do that again.”

On cross-examination, Davis, the prosecutor, grilled Raiza Robaina while accusing her and her husband of running $180,000 in mostly personal expenses through his real-estate business, Realty USA, which operated like a shell company with virtually no business activity.

Davis said that the couple used the company to pay off household bills for gas, telephone and nannies who looked after some of their five children Also included: a Realty USA check made out to Francisco Mestre, who is married to Julio Robaina’s sister, as a refund for $6,500 in Miami Dolphins tickets.

Davis called the couple’s use of Realty USA a “scam” designed to keep their income-tax obligations lower. Raiza Robaina denied the accusation and provided vague answers to most of his questions about dozens of expenses.

“It was being used by you and your husband to defraud the United States government,” Davis said. “No, sir,” she responded.

The prosecutor also asked Raiza Robaina about various payments to her husband through Realty USA — including a $300,000 fee paid by Miami-Dade developer Robert Vinas in November 2005 — that were not reported on the couple’s tax returns.

Davis accused Robaina of understating her knowledge of accounting and said that she had to know how her husband earned that payment from Vinas. She said she never asked her husband.

“He always did the right thing, so I had no need to question him about what he earned,” she testified.

According to the couple’s business records, it appears that Robaina was paid the $300,000 for consulting services he provided on a Miami development when he worked for Prestige Builders Group, which specialized in converting apartments to condos during the real-estate boom.

The Robainas are also charged with lying to federal authorities about the husband’s involvement in the wife’s two loan businesses, which charged high interest rates to a Hialeah jeweler who was eventually convicted of running a Ponzi scheme. Julio Robaina is also charged with lying to authorities about receiving cash payments from the schemer, Luis Felipe Perez, who is serving a 10-year prison sentence.

Raiza Robaina testified that she and her husband did not submit “false or fraudulent” tax returns in 2006 and 2007, and that neither of them lied to Internal Revenue Service agents and federal prosecutors about his involvement in her two loan companies, MR Holdings and RVR Holdings.

Those companies loaned $750,000 to Perez at 36 percent interest, according to prosecutors. Perez, who hopes to get a sentence reduction, testified last week that he negotiated the terms of the loans with Julio Robaina: 18 percent to be paid in checks and 18 percent to be paid in cash.

In total, Perez said he paid $600,000 in interest to Julio Robaina, including delivering cash payments to the home of a Hialeah power broker, Rolando Blanco, so the mayor could pick up the money. Blanco’s son, Roberto, also testified about the cash pickups and said he handed some payments to Robaina.

Before trial, prosecutors claimed that the mayor kept the cash payments secret from his wife because he wanted to use that money to spend on a mistress. No evidence of the alleged mistress surfaced during the couple’s trial, which started two weeks ago.

On Thursday, the couple’s defense attorney, David Garvin, asked: “Did you ever see your husband with a great quantity of cash that you didn’t know about?”

Raiza Robaina answered: “No, sir.”

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