HIALEAH (CBS4) -- Hialeah Mayor Julio Robaina, who earlier this month announced he was running for mayor of Miami-Dade County, is being investigated for alleged acts of loan sharking, mortgage fraud and tax evasion, CBS4 News has learned.
The investigation, confirmed by three law enforcement sources with direct knowledge of the ongoing federal probe, stems from allegations made against Robaina by Luis Felipe Perez, who pled guilty last year to operating a $45 million Ponzi scheme.
Perez, known by the nickname Felipito, has been cooperating with federal prosecutors for months in an attempt to reduce his ten-year prison term.
Robaina denies he has done anything wrong and has repeatedly denied he is being investigated. Robaina claims he is nothing more than a victim of Perez, who tricked middle-class and wealthy individuals in Hialeah into investing in his jewelry business and a string on non-existent pawn shops in New York City.
"We were investing in his business, which he bought and sold precious gems, or at least that's what he represented to us," Robaina said. "We were victims of a friend who took advantage of us, but we are not under investigation."
Robaina said the reason he believes he is not being investigated is simply that "we have never been notified of any investigation against us."
But investigators have subpoenaed records from both Robaina and his wife. And agents and prosecutors interviewed Robaina at length sometime around July of last year. His wife was interviewed approximately three months ago. Both voluntarily agreed to meet with agents and prosecutors, although they each did bring an attorney with them.
The Robaina investigation centers on a series of loans the couple made to Perez over an 18-month period starting in 2006 or 2007. The total amount of money Perez borrowed from the Robainas was $750,000.
Perez needed the money to keep his Ponzi scheme afloat.
The loans, some of which were made in the form of mortgages on Perez properties, stipulated on paper an interest rate of 18 percent. But Perez has reportedly told prosecutors that the actual interest rate was 36 percent - a usury rate that would be illegal.
Perez claims the mortgage documents and promissory notes were deliberately falsified to cover the illegal transaction. He has also claimed that the illegal portion of the payments were made in cash to Robaina.
"Completely false, completely false," Robaina said. "The notes are there, they are registered notes and the interest rates are on those notes and that is what he was obligated to pay."
Robaina said he has provided, through his attorney, documents to investigators showing what the interest payments were and what he did with whatever money Perez repaid.
"We have provided our paperwork to let them know this exactly where the dollars came from, this is how they were reported to the IRS, this is how the income was reported to the IRS," Robaina said.
Robaina argues that once investigators have a chance to see everything there will be no doubts in their mind.
"I believe that's where we are heading," he said. "I believe that's where it is going. Obviously this is a big investigation there are a lot of people who are being looked at, people who did commit a crime. In our case we were victims."
But Perez's attorney, Alvin Entin, says many of the people who claim to be victims of Perez really aren't victims at all.
"Luis Perez is a nice young man," Entin said. "He had a jewelry business and borrowed money from people who were loan sharks to get the business moving, couldn't keep up with the payments to the loan sharks, started borrowing more money and before he knew it he was in the middle of a Ponzi."
One reason federal authorities are so interested in Perez's allegations is that it takes them into the world of Hialeah loan sharking.
Unlike typical loan shark activities involving organized crime figures, the loan sharking business in Hialeah is allegedly dominated by so-called "pillars of the community." They center around prominent and politically influential Cuban-American families who become the community's private bank of last resort. Interest rates range anywhere from 36 percent to 50 percent.
But unlike the stereo-typical mobster who would threaten to break a person's legs if they fail to repay the loan, in Hialeah force is applied through threats of being ostracized both socially and professionally.
"I can tell you that my client is still cooperating," Entin said. "There are other subjects and targets of governmental interest out there. My client has provided some very useful information and I think the government is proceeding on it."
Asked if Robaina was one of the individuals Perez was providing information against, Entin said: "I'm afraid I can't comment on that."
Robaina said he is not worried about the stories Perez might make up. Robaina said he did nothing wrong.
"Luis Felipe is someone who is facing ten years in jail," Robaina said. "I'm not sure what he's telling them. I can tell you what the facts are and what all of the corresponding paperwork shows."
But Perez's attorney maintained prosecutors will not have to simply rely on Perez's word.
"Things that Luis did he didn't do in a vacuum," Entin said. "There were people around him who were privy to it. There were books, there were records, there were documents you can track and trace. There is a lot of corroboration out there."
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