Oscar Rivero, the developer at the center of Miami's sweeping affordable housing scandal, was arrested late Saturday on charges he spent at least $736,000 in public money meant for the poor to buy himself a South Miami house, plus appliances, pool, a termite inspection -- even a $3,000 insurance policy.
The money was supposed to pay for 54 houses for the low-income elderly in Little Havana.
But 14 days after the Miami-Dade Housing Agency cut Rivero a check for $806,000 in November 2004, he wired the bulk of the money to a title company to buy his 3,600-square-foot house in cash, according to an arrest warrant signed by Miami-Dade Circuit Judge Stan Blake.
Prosecutors charged Rivero, a 36-year-old lawyer and civic leader, with two first-degree felonies: grand theft and committing an organized scheme to defraud. If convicted, he would serve a minimum of 21 months in state prison.
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Prosecutors say they are still examining Rivero's financial and property records and more charges are likely. They are also tracking deals struck by other affordable-housing developers, several with ties to Rivero.
Rivero surrendered to law enforcement agents late Saturday at the Miami-Dade Public Corruption Investigations Bureau, where he arrived in a black Mercedes C240 and was immediately searched and cuffed. He was then taken to the Turner Guilford Knight Correctional Center, where he is being held on $1 million bail, with the special condition that he prove the money used to post bail was not obtained fraudulently.
''It's repugnant that Rivero, who knew the desperate need for housing for the poor, instead stole the money to build his own castle,'' said State Attorney Katherine Fernández Rundle, whose office has been investigating along with the Miami-Dade police public corruption unit.
Rivero's attorney, Lilly Ann Sanchez, said in a written statement, ``Mr. Rivero is an outstanding member of the community whose hard work earned him the respect of his peers, the public and even Florida's governor.''
Sanchez added that Rivero has so far returned $1.5 million of the public's money, including the money that was supposed to go to the Little Havana affordable housing project. Prosecutors, however, say the return of public money does not absolve fraudulent acts.
The case against Rivero will be prosecuted by Richard Scruggs, special assistant to the state attorney for public corruption.
Rivero's arrest comes 34 days after The Miami Herald published an investigative series that exposed widespread misspending at the Housing Agency, which in recent years paid a group of developers, including Rivero, more than $12 million for affordable houses that were never built.
Overall, the newspaper found, Rivero's companies received almost $1.7 million from the Housing Agency for projects now scrapped. Though he held on to the cash for years, the county only recently filed suit to recoup the money.
Rivero's projects also received $530,000 from the city of Miami and $750,000 for the county-funded, nonprofit MDHA Development Corp., run by Rivero's business partner and longtime friend.
In four years, he has not built a single house for the poor.
Instead, Rivero started buying a series of personal properties and an office for more than $4.9 million, The Miami Herald found, including the home prosecutors now say he purchased with the public's money.
That house is about a mile from an 11,000-square-foot estate that Rivero and his wife have been building in the High Pines neighborhood wedged between Coral Gables and South Miami. The house comes with an elevator, billiard room, wine cellar, four-car garage, pool, spa and fountain.
During their investigation of his current home, prosecutors discovered that Rivero wired the $711,000 payment for the house to First Colonial Title Services -- a company operated by another affordable-housing developer, Reynaldo Diaz. The firm did the title work to help Rivero buy the three-bedroom South Miami house.
Diaz and Rivero have done business before, records show.
A mortgage lender, Diaz provided both himself and Rivero with a required ''letter of intent'' promising private financing so they could qualify for Housing Agency loans in 2002.
Diaz was loaned $940,000 to build 28 houses for the poor, but delivered only two. He recently struck a settlement with the county to repay the money. Diaz could not be reached for comment late Saturday.
Prosecutors say Rivero not only used the Housing Agency's money to buy his current home, but also spent at least $25,000 for windstorm insurance, a swimming pool, marble, granite, architectural fees, windows and renovations. Records show Rivero paid at least $6,000 for renovations to the house to Civic Construction, the same general contractor he was allegedly using to build homes for the poor.
''We will continue to investigate diligently to identify and arrest those who have schemed to deny housing to those most in need of it in our community,'' said Maj. Michael Trerotola, who heads the corruption unit.
Rivero spent Saturday night in jail and is expected to spend tonight there as well. He is scheduled to appear before a judge Monday morning for a bail hearing.