Owners of Diaz Supermarkets in Miami-Dade accused of $35 million fraud
04/15/2013 6:20 PM
04/16/2013 4:51 PM
Authorities said Monday that the co-owners of the family business Diaz Supermarkets were involved in $35 million in fraudulent transactions.
Diaz Supermarkets has long-standing ties to the Homestead and Naranja neighborhoods. The Diaz family was known for calling costumers by name and greeting them at the door. The stores had a tortilleria and a cafeteria that served breakfast, lunch and dinner. The butcher provided special cuts of meat and the catering department made traditional Latin meals for quinceañera parties and other celebrations.
The family business grew. The Diazes operated four markets in Miami-Dade offering check-cashing and money-wiring services since 2006. That is where authorities believe there was a movement of drug money and a scheme to evade the cost of workers’ compensation coverage.
Diaz Supermarkets “were the ones handling all of the cashing of the checks and taking a cut of the money,” said Anna Alexopoulos, a spokeswoman for the state Department of Financial Services.
John Diaz, 45, and his wife Mercedes Avila-Diaz, 44, also owned and operated Diavila Enterprises Inc., which was advertised as a tax preparation company. Diavila Enterprises “had been operating for nearly 10 years without the required workers’ compensation coverage,” Florida Chief Financial Officer Jeff Atwater said in a news release.
The scheme that the Diazes were allegedly involved in is popular in the contractor world, Alexopoulos said. Subcontractors are required to show proof of workers’ compensation coverage and they find ways around it.
“Usually there is a facilitator and this individual usually has a company already in place and is looking to make a little bit of extra money,” Alexopoulos said. “They rent out these policies to a general contractor or subcontractor who sets up a shell company and puts a fictitious name as the owner of the company.”
To avoid raising any red flags, there are no bank accounts involved, check-cashing stores are used, and sometimes the general contractor is involved in the scheme. The investigation began in Broward County with a construction site and led authorities to Diaz Supermarkets’ check-cashing service, Alexopoulos said.
The Diaz couple, who lived in Pinecrest, was arrested Friday and could face up to 95 years in prison if convicted of all counts.
Diaz is facing first-degree felony charges of money laundering and organized scheme to defraud, and second-degree felonies of multiple money service business violations. Both Diaz and Avila-Diaz also face third-degree felonies of workers’ compensation fraud.
Authorities seized $640,000 and three vehicles, Atwater said. Former employees said authorities raided and closed four stores Friday: Two were in Homestead at 1215 NE Eighth St. and 212 W Mowry Dr. One was in Naranja at 13501 Moody Dr., and another was at 151 Opa-locka Blvd., in Opa-locka.
John Diaz is the son of Adalbert Diaz, who opened Diaz Groceries and Meat in Naranja after moving from New York in 1976. On Monday night, some residents and store neighbors couldn’t believe the news.
“I have been shopping there for a few years,” Carmelia Mejia, of Naranja, said in Spanish. “The owners were nice people.”
The joint operation was part of “Operation Dirty Money,” which involves Atwater’s Division of Insurance Fraud, the Office of Financial Regulation, Miami-Dade County Police, the Broward Sheriff’s Office and the Palm Beach County Sheriff’s Office.
Anyone with information about suspected fraud is asked to call 1-800-378-0445.
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