Crime

For helping Feds, Hialeah Ponzi schemer gets his 10-year sentence cut in half

Socializing: Former mayor Julio Robaina, left, was acquitted of his involvement in Luis Felipe Perez’s investment scheme.
Socializing: Former mayor Julio Robaina, left, was acquitted of his involvement in Luis Felipe Perez’s investment scheme. CBS4

One of South Florida's most-notorious Ponzi schemers, Luis Felipe Perez, will soon be released from prison after his 10-year sentence was cut in half for assisting in the prosecution of former Hialeah Mayor Julio Robaina on tax-evasion charges and one other associate.

Perez, 42, who became the poster boy for Hialeah's “shadow” banking industry that helped fuel his $40 million jewelry investment racket, is expected to be released by Thanksgiving.

“We think it's a very good outcome for him,” said his attorneys, Alvin and Josh Entin, after his sentence reduction hearing on Friday in Miami.

U.S. District Judge Paul Huck recognized Perez's significant cooperation by testifying at the bank fraud trial of a former associate, Garbriel Cifuentes, who was convicted in 2011, and the trial of former Hialeah mayor Robaina and his wife, Raiza, who were both acquitted on tax-evasion charges earlier this year.

Veteran prosecutor Richard Gregorie recommended Perez's reduction after noting that he “has been cooperating with federal law enforcement officers since prior to his first indictment in June of 2010” on securities fraud, according to a court motion. Perez also pleaded guilty to a bank fraud conspiracy involving a network of people who borrowed money from Wachovia Bank to invest in his gem business, which promised high returns.

The prosecutor said Perez “provided law enforcement with all of his books and records, explained all of his fraudulent activities and in April 2014 testified for two days” at the Robainas' trial.

Perez’s mother, Aida Perez, was informed of her son’s substantial sentence reduction by an el Nuevo Herald reporter on Sunday. She expressed happiness, but declined to comment.

Perez was the prosecution’s star witness at the tax-evasion trial of the Robainas, who were accused of failing to report more than $2 million in income on their joint returns, including high-interest proceeds from secret loans to Perez.

The Robainas' victory stung the IRS and the U.S. attorney's office, which were confident of convictions after making their case against the two-term former mayor and his wife.

The couple's trial spotlighted Hialeah's shadow banking industry of high-interest loans. As a sitting mayor, Robaina loaned $750,000 to Perez, who would be convicted in 2010 of swindling $40 million from the couple and dozens of other investors.

Perez testified that he paid 18 percent interest in checks and 18 percent interest in cash. He said that his $300,000 in cash payments were delivered to the home of a Hialeah power broker, Rolando Blanco, who had matched him up with Robaina in the loan deals during a Caribbean cruise together.

During closing arguments, the Robainas’ defense attorney, David Garvin, argued that the former mayor charged interest of 18 percent and collected only checks, not cash, from Perez. Garvin said they were “victims” of the unscrupulous jewelry investor, accusing Perez of lying on the witness stand to curry favor for a reduction in his prison sentence.

Also, Garvin raised questions about whether the then-Hialeah mayor actually collected the alleged cash payments at Blanco's home between 2006 and 2009.

He said that prosecutors Gregorie and Michael Davis — besides calling Perez and another key witness, Blanco's son, Roberto — could not independently prove there was in fact cash delivered and that Robaina received it.

Garvin also told jurors that the Robainas became targets of overzealous Internal Revenue Service agents, who aimed to take out a prominent politician. The former Hialeah mayor lost to Carlos Gimenez in the runoff for Miami-Dade County mayor in 2011 while Robaina was under investigation.

At Robaina’s trial, Hialeah Mayor Carlos Hernandez, also testified that he, too, had taken part in the city's “shadow” banking business that charged astronomical interest rates on loans.

Hernandez didn’t face any charges himself, but under questioning admitted he collected the same inflated 36 percent interest on $180,000 in loans he made to Perez — contradicting denials he had issued during the 2011 mayoral campaign.

El Nuevo Herald reporter Enrique Flor contributed to this report.

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