Miami-Dade County

Masvidal to face theft charges

Developer Raul Masvidal, one of Miami-Dade's most prominent civic leaders, is slated to be arrested today on felony charges that he siphoned tens of thousands of dollars from the county's Housing Agency to buy himself a sculpture of a giant watermelon slice.

Masvidal will become the second developer in recent months accused of stealing money from the Miami-Dade Housing Agency while thousands of poor families scraped by in decrepit rental apartments, public housing or homeless shelters.

A former banker whose ties to local power brokers span three decades, Masvidal is expected to turn himself in today at the Miami-Dade state attorney's office, where he will be charged with grand theft and organized fraud. If convicted of the first-degree felonies, he could face as many as 30 years in prison.

According to investigators from the Miami-Dade inspector general's office, Masvidal used county money to buy a $150,000 watermelon sculpture titled Mars.

Masvidal -- who once farmed watermelons in Puerto Rico -- allegedly concealed the purchase by submitting a fraudulent invoice through a failed Housing Agency construction project he was managing.

"What a great disappointment, " said State Attorney Katherine Fernández Rundle. "He was a respected member of our community. . . . But he turned on his community. He turned on his friends."

Masvidal's defense attorney, John Thornton, would not discuss specific allegations but said his client will plead not guilty. "We look forward to revealing all the facts in court. . . . He has committed no crime."

Masvidal is among at least a half-dozen people brought under investigation since The Miami Herald's House of Lies series last summer revealed chronic misspending and insider deals that allowed developers to reap millions of dollars for affordable housing never built.

In August, developer Oscar Rivero was arrested on charges he spent $736,000 in affordable-housing money to buy himself a South Miami house, plus appliances, a pool and a $3,000 insurance policy.

Masvidal's Hometown Station Ltd. was developing a $25 million headquarters for the Housing Agency, with the county kicking in $5 million to pay for the construction. But three years later, nothing has been built.

With the office project $8 million over budget and 18 months behind schedule, the county canceled the deal last summer.

MISSPENT MONEY

Auditors have since reported that Hometown Station misspent at least $3.2 million in public money on excessive management fees and costs unrelated to construction.

Hometown Station attorney George McArdle has called the audit's criticisms "baseless and unfair, " and said Masvidal denies wrongdoing. McArdle has also insisted the building project stalled because of the county's mistakes -- not Hometown Station's.

On Thursday, Hometown Station sued the county, saying Miami-Dade is to blame for the construction delays.

But investigators say at least $287,000 in public money was spent fraudulently on artwork.

Masvidal said he used the money to buy a sculpture of stacked cups that would grace the new office complex, acquiring the artwork from a childhood friend, noted Miami artist Julio Larraz. Masvidal had the piece shipped from Italy.

But investigators allege the developer actually acquired two sculptures from Larraz -- the stacked cups for the office complex and the watermelon for himself. Each cost $150,000.

To hide the purchase, investigators allege, Masvidal asked a Texas art broker to create a false invoice that listed only the sculpture of stacked cups -- at the bogus price of $275,000, almost double what it was worth. Added to the bill was shipping and other costs.

Masvidal submitted the invoice as part of the construction deal. Using county dollars, he paid for both sculptures and had them put in storage at general contractor Delant Construction's warehouse.

Then, even as auditors were probing Hometown Station's spending in October 2006, investigators said Masvidal took out two personal loans for a combined $250,000 by using both sculptures -- purchased with county dollars -- as collateral.

Investigators say the art broker who handled the sale of the sculptures, Ron Hall, will not be charged; investigators say they believe he was duped by Masvidal and was unaware that public money was involved.

Investigators also say they have no plans to charge Larraz, saying he, too, was in the dark. Masvidal and Larraz have been friends for years.

In December, however, they argued over money in the driveway of Larraz's Coral Gables home. According to police, Masvidal punched Larraz several times. Masvidal was arrested on battery charges.

Investigators say Masvidal owes Larraz $180,000, including $30,000 in shipping and installation costs for the sculptures. Larraz lent Masvidal the rest of the money for personal use.

TROUBLED FINANCES

For years, Masvidal has struggled with finances even as he gained prominence in Miami as a political advisor, philanthropist and businessman. Born in Havana in 1941, he became a Miami banker and in the 1970s was arguably among Miami's most influential Cuban Americans.

A one-time candidate for Miami mayor, he has worked with more than 40 civic organizations, including the ballet, the state Board of Regents and the United Way. He once owned part of Miami's minor-league baseball team.

In 1990, however, Masvidal was $2 million in debt, his businesses failing. He moved to Puerto Rico, where he became a watermelon farmer before a lender filed a $225,000 foreclosure suit on the farm.

Masvidal moved back to Miami and became a close advisor to then-Miami-Dade Mayor Alex Penelas, who chose Masvidal to head up the development of a new basketball arena downtown.

In recent years, Masvidal served on the board of Miami-Dade's Public Health Trust, which governs Jackson Memorial Hospital. After the scuffle with Larraz, Masvidal announced he would take a leave of absence until the criminal case was resolved.

The new charges against Masvidal are scheduled to be announced at a news conference today. The case will be prosecuted by Assistant State Attorney Richard Scruggs.

Fernández Rundle, meanwhile, said more people involved in botched Housing Agency deals could soon face criminal charges.

"We see many more arrests on the horizon, " she said.

Miami Herald staff writer Scott Hiaasen contributed to this report.

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