Hialeah Mayor Carlos Hernandez, testifying under oath Wednesday in the tax-evasion trial of his predecessor, acknowledged that he too had taken part in the city's “shadow” banking business that charged astronomical interest rates on loans.
That under-the-radar industry has put former Hialeah Mayor Julio Robaina in the cross-hairs of federal prosecutors. They have charged him and his wife with hiding some $2 million in income to avoid paying taxes — including secret cash payments from 36 percent interest charged on $750,000 in loans made to a convicted Ponzi schemer.
Hernandez doesn’t face any charges himself, but under questioning he admitted he collected the same inflated interest on $180,000 in loans he made to con man Luis Felipe Perez — contradicting denials he had issued during the 2011 mayoral campaign.
Back then, Hernandez had angrily denounced a Miami Herald story that reported he was paid about $100,000 in interest by Perez, calling it an attack on his integrity. He claimed that Perez had only repaid him part of the loan principal.
But at the Robainas’ criminal trial, Hernandez testified that he was paid a monthly rate of 3 percent interest — 36 percent annually — on a series of loans between 2007 and 2009. He answered “Yes, sir,” when questioned by prosecutor Richard Gregorie about his high-interest terms and payments.