Ford, GM & American Automakers salivate over 'oasis' Cuba

but where is the purchasing power that supports the demand for cars in a country where the average wage is $20 USD?

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Daily Mail Online

The world's most prominent automakers are hungrily eyeing up Cuba after its rapprochement deal with the United States.

December 19, 2014 ©Yamil Lage (AFP/File)

But trade restrictions that are still in place for Americans and a litany of concerns about Havana's policies means they are unlikely to dive in any time soon.

Washington and communist Cuba in December began the painstaking process of restoring diplomatic relations and easing the five-decade-old trade embargo.

President Barack Obama declared that the United States was ready for a "new chapter" in relations.

It still needs Congress to fully lift the embargo -- and if that happens it could take some time -- but businessmen are already looking for ways to establish an early position in a country they expect could surge economically with a bit more liberalization.

Automakers at the Detroit auto show were not talking out loud about the mouthwatering possibilities, but the potential for the largest island in the Caribbean, with a population of 11 million, was on the minds of many.

"We're very encouraged by the news that the countries intend to normalize relations. We will certainly evaluate any opportunities that may present themselves," said Patrick Morrissey, a General Motors spokesman.

"We are studying the eventual opportunities for GM in Cuba."

Christine Becker, a spokeswoman for Ford, said they also were keeping an interested eye on Cuba.

"We will review that initiative in order to determine its potential impact for the industry. We have to better understand it. We don't rule anything out for now," she said.

South Korea's Kia, which produces some of the lowest-priced cars on the US market, said it welcomed the change in policy toward Cuba, but told AFP it too had no tangible plans for the island's market.

- 'Cuba an oasis' -

Experts identify a number of hurdles automakers are going to have to overcome in Cuba, which is famous for the decades-old classic American cars that ply its dusty and unforgiving roads.

The US embargo and other economic isolation forced by the communist economy has denied car parts for those rich enough to have them, forcing skilled Cuban mechanics to keep them alive for decades.

Akshay Anand, an analyst at the industry specialist Kelley Blue Book, told AFP: "No doubt there's a potential growth. Cubans love American cars, the demand is there.

"You can look at it and say Cuba is an oasis for the automakers."

The buying power of Cubans remains low, but with investment slowly beginning to flow in to a range of businesses from agriculture to tourism, a surge in demand for modern vehicles is seen as inevitable.

But the current limited US opening leaves most investment and sales by Americans tightly restricted.

It allows Americans to sell farm equipment to support Cuban farmers; it is not clear if that will extend, for instance, to pickup trucks.

In the attractive shape of the vintage cars on Cuba's roads, Detroit has an indelible history in the island's motoring sector, readily visible to visitors.

Sometimes flashy and often crudely patched and rickety Pontiacs, Plymouths, Dodges and Chevrolets make up the island's 70,000 "almendrones," cars affectionately called large almonds for their rounded shape.

There are also Peugeots, Skodas, Ladas and Chinese models that entered the country between the 1960s and 1990s.

They too depend on the skills of Cuban craftsmen-mechanics to keep them chugging along in the absence of replacement parts.

Three things you need to know about Cuba - MarketWatch

MarketWatch

By Barry Wood

This car in Havana is perfectly preserved from the 1950s, but Cuba itself is in ruins/ Barry Wood

HAVANA, Cuba (MarketWatch) — In light of the historic thaw in U.S.-Cuban relations announced on Dec. 17, three items stand out from a four-day visit to Havana: 1) Cuba’s economy is a disaster in desperate need of reform. 2) The Communist Party retains its tight grip and political change is a long way off. 3) It is likely to be months before normalized bilateral relations produce real change.

The economy

Havana is a ruin, a surreal time warp, exemplified by ancient cars and trucks from before the 1959 revolution. For 50 years there have been no imports of cars for private use. Houses and apartment buildings are run down, with their occupants not having cash for needed repairs.

Amazingly, most Cubans subsist on salaries of $20 per month. Those with more are Communist bureaucrats, workers in tourism with access to hard currency, and those receiving remittances from abroad.

Cuba’s economy is dead in the water with barely any advance in gross domestic product. The country is nearly bankrupt with no access to credit. There are frequent power outages. Unemployment is kept low because jobs are provided in a bloated and inefficient public sector, where four out of five Cubans work. Inflation is suppressed. There are chronic shortages. Basic foodstuffs are rationed. Ninety percent of Cubans don’t own a car.

Despite the negatives, reforms unveiled in 2011 by President Raul Castro have allowed a small but growing private sector to take hold. The reforms permit Cubans to buy and sell their apartments, 84% of which are privately owned. But while an incipient real-estate market exists, it is stymied by an absence of mortgage credit.

Similarly, Cubans can buy and sell their privately owned vehicles. But contrary to expectations, liberalization has boosted car prices. Unbelievably, the asking price on the refurbished 1956 Chevrolet pictured below is well over $100,000. Classic cars can’t be exported, meaning that U.S.-based collectors won’t be able to import these treasures anytime soon.

Cuba’s economy is further distorted by there being two currencies, both of which circulate. The government says unifying the exchange rate is a priority but that is unlikely to occur until Cuba obtains access to hard currency. Look for early moves for Havana to rejoin the International Monetary Fund.

A closed political system

Cuba remains a one-party Communist state with little prospect of liberalization. The media is tightly controlled and state-owned newspapers are mostly propaganda. English-language newspapers from abroad are banned.

This past week Cuba released more of the 53 political prisoners it promised to liberate as part of the December accord between Presidents Obama and Castro. Thirty-six are now free, a move the White House calls “a tangible sign that Cuba is keeping its word.”

As part of the 2011 reforms Cubans can have cell phones, stay in hotels previously reserved for tourists, use the Internet, and travel abroad. But because most people don’t have disposable income, the new freedoms mainly help the better off.

Contrary to what many outsiders want to believe, Fidel, his brother Raul and the revolution remain popular, although independent surveys don’t exist. Cubans are proud of their country’s achievements in education and in health care, which is free to all.

Change from normalization may be slow

Every Cuban of the two dozen or so I spoke with favors normalization. Some were deeply emotional, saying they can’t wait for Americans to arrive in significant numbers. The lives of ordinary people are bound to improve with the lifting of the embargo.

But while Cubans and Americans are eager for visits, important restrictions remain.

Despite President Barack Obama’s announcement, it is still not possible to use U.S.-issued credit cards in Cuba. Likewise getting email on dial-up Internet servers can be difficult. I was unable to access my Google and Yahoo email accounts, getting instead a prompt saying, “access is denied in the country you’re in.” There is disagreement whether these measures can be lifted by executive order or must await congressional action.

Bob Corker, the new chairman of the Senate Foreign Relations Committee, said last week that the embargo has been ineffective, a clear sign that he may favor its repeal. Both the Chamber of Commerce and leading agricultural organizations favor normalization. Congressional hearings are already planned and a top State Department official is visiting Havana this month to advance the normalization process.

A Cuban businessman, who declined to be identified, told me that Cuba urgently requires reform. “We’ve created a system,” he said, “that we can’t control.” The only way for us to have any prospect of economic improvement, he continued, is to open up and build a market economy.

Last May Washington’s Peterson Institute for International Economics released a study on the Cuban economy. In it researcher Gary Hufbauer concluded “that once the tectonic plates shift” there will clear benefits for both Cuba and the United States. The tectonic plates have shifted and from my perspective Hufbauer is spot on.

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Barry D. Wood writes often about economic transitions. He last visited Cuba 11 years ago.

Cuba paraiso de delincuentes: Cubanos roban en EEUU y escapan a la isla

AmericaTeVeCanal41

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Ver tambien: 

http://cubaindependiente.blogspot.ca/2015/01/the-cuban-criminal-pipeline-part-i_10.html

http://cubaindependiente.blogspot.ca/2015/01/the-cuban-criminal-pipeline-part-ii.html

Rolando Sarraff, el espía canjeado a EEUU reaparece tras un mes de silencio

martinoticias

Rolando Sarraff Trujillo, el espía que quedó en libertad tras el acuerdo entre Cuba y Estados Unidos, confirmó que está en Estados Unidos y se encuentra bien, informó el martes su hermana Vilma Sarraff a The Associated Press.

Vilma Sarraff, que vive en España, dijo que su hermano contactó por primera vez con la familia tras un mes de silencio. El espía confirmó que se "encuentra libre y bien", pero no quiso desvelar detalles de la conversación telefónica ni la ciudad norteamericana en la que se encuentra.

La familia había dicho desconocer el paradero de Sarraff. La hermana hizo público este contacto horas después de que Estados Unidos confirmara la liberación de los 53 prisioneros políticos que Cuba se comprometió a excarcelar como parte del acuerdo histórico entre las autoridades cubanas y el gobierno norteamericano.

Rolando Sarraff, de 51 años, fue identificado por un ex miembro del gobierno estadounidense como el espía liberado al que el presidente estadounidense, Barack Obama, elogió como uno de los activos más valiosos de Washington. La fuente indicó que Sarraf fue la persona repatriada a Estados Unidos junto a Alan Gross el pasado 17 de diciembre.

Sarraff era un criptógrafo que trabajaba para la inteligencia cubana como "agente de comunicaciones".

Fue detenido y condenado a 25 años de cárcel en 1995. Antes de que cayera en manos de las autoridades cubanas, Sarraff ayudó a desmantelar la llamada "Red Avispa", una red de espionaje cubano en Florida que incluía agentes del grupo conocido como Los Cinco. Tres de ellos fueron puestos en libertad y enviados de vuelta a Cuba a cambio de Sarraff, Gross y los 53 disidentes.

Llegan ocho balseros cubanos a Virginia Key

AmericaTeVeCanal41

Asesinan en La Habana a un abogado de Tampa

Diario de Cuba

Alberto Romero, un abogado de Tampa, fue asesinado en Cuba la semana pasada, señaló un portavoz de la familia al diario estadounidense Tampa Bay.

Un portavoz de la familia dijo que recibieron la noticia el viernes, pero cuentan con muy poca información.

"La familia de Alberto Romero está de duelo en privado, por la pérdida de su ser querido, mientras las circunstancias de la tragedia son investigadas", dijeron sus allegados en una declaración escrita.

No estaba claro si Romero fue asesinado en la noche del jueves o el viernes en la mañana.

La oficina de la congresista Kathy Castor, demócrata de Tampa, está colaborando para asegurar el retorno de su cuerpo.

Romero, de 39 años, recibió el título en la Universidad de Illinois en 2001. Era abogado en temas de derecho civil y familiar.

No gold rush for Cuba despite diplomatic thaw

Pensions & Investments

By Rick Baert

A slight thaw in U.S.-Cuba relations has some observers thinking that down the road, U.S. asset owner interest in the Caribbean nation could heat up. 

“Every now and then I get a call from someone in private equity or infrastructure asking when we can invest in Cuba,” said Julia E. Sweig, Nelson and David Rockefeller senior fellow for Latin America Studies and director for Latin America studies at the Council on Foreign Relations, a Washington-based think tank. “But regulations regarding that aren't out yet.”

Institutional investment in Cuba “could be years away,” said Greg Behar, senior vice president, director of global equity investment strategy at Northern Trust Asset Management, Chicago. “It'd be in the bullpen for frontier markets.”

What sparked interest in Cuba, 53 years after the U.S. broke off diplomatic relations, was the Dec. 17 announcement by President Barack Obama and Cuban President Raul Castro that they would begin a process to normalize relations between the two countries. Along with establishing a U.S. embassy in Havana, the agreement would lift some U.S. travel restrictions and give U.S. banks access to the Cuban financial system. However, the agreement does not end the 52-year U.S. embargo against trade with Cuba, nor does it change Cuba's designation as a state sponsor of terrorism, made by the U.S. State Department in 1982.

It's the embargo — which would require an act of Congress to remove — and the terrorism sponsorship designation that has U.S. institutional investors silent on Cuba as a potential investment destination. Sources at money managers, asset owners and investment consultants contacted for this story would not comment on the potential for future investment in Cuba.

Given the half-century of animosity between the U.S. and Cuba, there would “definitely” be political risk in institutional investment in Cuba, said Brenden Woods, partner and co-head of infrastructure and real assets at alternative investment consultant StepStone Group, San Diego. “But I wouldn't necessarily say it's higher than any other emerging market. You may see adoption of developed-market investment structures like public/private partnerships, but implementation of those structures may require some observation before commitment. It'd definitely be a material consideration. It'll probably be a little bit of who jumps first, then you'll see a little follow-the-leader.”

Too soon

Officials at two public pension funds that have small allocations to frontier markets said, on condition of anonymity, that it's too soon to say whether they would allow their external managers to invest in Cuba. But one of the executives said there could eventually be opportunities for private equity investments there.

The ban even has an effect on investors in countries which have no ban on Cuba because of the financial weight the U.S. holds. “Of course, no one will talk about it,” said Sebastiaan Berger, the Hague, Netherlands-based CEO of CEIBA Investments Ltd. CEIBA is a real estate investment manager focusing on development of Cuban commercial and hotel real estate. “That wall will crumble. There already have been pension funds elsewhere investing in Cuba, but everyone's secretive about it because of the ridiculous regulations that are in place.”

The terrorism-sponsorship designation “is now under formal review as part of a review of U.S.-Cuban relations,” said Philip Peters, president, Cuba Research Center, Alexandria, Va., a think tank focusing on Cuban-American relations. “Because of this designation, the movement of money to and from Cuba is monitored by the U.S. Treasury, making investment by anyone, foreign or U.S., very difficult. Few banks want to deal with them. That would all go away once the designation was removed, making Cuba a lot more attractive for investment.”

Northern Trust's Mr. Behar said Cuba would also need to shore up its economic and financial infrastructure, including the creation of a stock exchange, and would need to be open to all foreign investment before being included in indexes and portfolios of frontier markets strategies.

Mr. Peters and others said Cuba would provide fertile ground as a frontier market in need of huge amounts of foreign investment, with sectors running the gamut from real estate and infrastructure to commodities and energy.

Potential opportunities in Cuba are “almost everywhere, because Cuba needs everything,” said Ms. Sweig.

Growth areas

Mr. Berger said some sectors prime for investment in Cuba, in addition to tourism, are air, ground and sea transportation of any kind; oil and gas exploration; nickel mining; cement production; “almost anything you can think of” in industrial and service sectors; and a wide array of construction and infrastructure needs.

“All of these are areas for growth,” Ms. Sweig said, but she cautioned: “Just because the Obama administration changed its policy doesn't mean that Cuba will change its policies top to bottom. Cuba has foreign investment guidelines and national priorities ... this doesn't mean Cuba will be open for business tomorrow.”

Currently, foreign investment in Cuba is done under a 2014 Cuban law allowing joint ventures with the Cuban government directly or with one of the country's state-run businesses. Investments are directed to portfolio projects chosen by the Cuban government, with most steered to sectors that generate hard currency. Cuba has two currencies, a non-convertible peso and a peso that can be converted, but only in Cuba. “Some foreign investors who've been there a long time have gotten returns,” Mr. Peters said. “The question is what would have to happen to get the returns. In basic finance, the math works out, but will the returns come in a currency that can't be converted in foreign exchange?” Mr. Castro has called for a unified currency, “and if it's fully convertible on the world market, this problem goes away,” he said.

Ms. Sweig said the Cuban government normally holds at least 51% of a joint venture, “but supposedly they've become more flexible with that ownership share.”

One potential target for private equity investment is entrepreneurial cooperative businesses in Cuba that operate independent of the government.

“Individually operated and small-sized businesses have seen big growth” since a 2010 law that liberalized rules for opening private businesses, said Mr. Peters. That law helped increase the number of Cubans operating private businesses to 500,000 today from 150,000 in 2010. “Those people are receiving investment on the family level with seed capital to start small businesses like restaurants, car repair shops and tailors,” he said.

Lots of inquiries

Since Mr. Obama announced resumption of diplomatic relations with Cuba, CEIBA has received a lot more inquiries from potential investors, said Mr. Berger. He expects CEIBA will benefit from its longtime expertise in Cuba, but he also acknowledged CEIBA is a relatively small manager and there'll be plenty of room for other money managers. CEIBA manages $110 million in assets, including “a small amount” from European pension funds he would not identify.

Cuba might be seen as following the same path as communist-led nations China and Vietnam in moving to a more open economic market, but Mr. Peters warned that Cuban officials won't admit to that.

“Cuban officials have been in touch with the Vietnamese and Chinese. They've seen up-close how China and Vietnam have evolved in terms of private capital and investment,” Mr. Peters said. “No Cuban will say that they're following a blueprint from anyone, but I'm sure they've learned a lot from watching them.”

Expelled Spy Likely To Led Migration, Normalization Talks With US

cubaconfidential

Josefina Vidal thrown out of the US in May 2003 for espionage

By Chris Simmons

The next round of US-Cuban discussions will be held on January 21 and 22 in Havana. Deputy Assistant Secretary Alex Lee is expected to lead the U.S. delegation at the migration talks on the 21st, while Assistant Secretary of State for Western Hemisphere Affairs Roberta Jacobson will lead at the normalization talks on Jan. 22nd.

The Cuban delegation is expected to be led by Josefina Vidal, director of the North American Affairs Division within Cuba's Ministry of Foreign Affairs. Vidal led the previous round of migration talks last July in Washington, D.C. A member of the Communist Party of Cuba’s Central Committee, Vidal was thrown out of the US in May 2003 as part of a mass expulsion of Havana’s spy-diplomats. For five years, her office also played a central role in the negotiations regarding the return of USAID contractor Alan Gross

RAÚL RIVERO: Metáfora de galera

El Nuevo Herald

Raul Rivero

"En movimiento espero"/ oleo sobre tela, 146x91cm/

Antuan delaguetto

Madrid – Están equivocados los rimbombantes aguafiestas que dentro y fuera de Cuba afirman que la oposición pacífica y los activistas de derechos humanos no han tenido ninguna participación en las negociaciones entre el régimen castrista y el gobierno de Barack Obama. Los cubanos que trabajan de frente a la dictadura todos los días aportaron a esa mesa de diálogos secretos una presencia capital: los presos políticos.

Es verdad que no se tuvo en cuenta la opinión de ninguno de los dirigentes de los grupos opositores, las Damas de Blanco, la incipiente sociedad civil o del exilio, pero en las conversaciones clandestinas sostenidas en Canadá entre los representantes de los dos gobiernos, los prisioneros regados por las 300 cárceles de Cuba fueron una cifra muda y antojadiza (53) que redondearía los acuerdos sobre el intercambio del subcontratista Alan Gross y los espías cubanos condenados en Estados Unidos.

Los nombres planos de los activistas de base hechos prisioneros en cualquier punto de San Antonio a Maisí comenzaron a aparecer después de las celebraciones por la firma del arreglo, poco a poco, como para que sus historias personales no empañaran el brillo de la gestión diplomática.

El documento suscrito por Obama y Raúl Castro muestra, en blanco y negro, el interés de uno por la liberación de un grupo de demócratas y la anuencia del otro a ceder a la petición como un buen veterano especializado en comerciar con la libertad de los ciudadanos que manda a encerrar porque no comparten sus ideas.

El asunto es que el socialismo tropical tiene una noción singular de la libertad. La mayoría de los prisioneros sacados de la cárcel en virtud del acuerdo salieron a la calle con el sello de liberados condicionales, otros con las llamadas licencias extrapenales y a un tercer grupo se les ha retenido toda su documentación, según la Unión Patriótica de Cuba (UNPACU), una organización a la que pertenecen 29 de los prisioneros enviados a sus casas.

Las autoridades, dice la denuncia, amenazaron con hacerlos volver a todos de regreso a prisión en caso de que realizaran actividades políticas.

Sí, es un desliz perverso de los cronistas sin agudeza y amargados que acuden a una prosa rebuscada para negar la impronta de la oposición en el proceso de acercamiento entre los dos países. Ahí están los presos políticos con las celdas de castigo, el hambre crónica y los sufrimientos en la experiencia de sus vidas.

Están en su papel secundario de la función, con su familia y sus amigos, bajo la vigilancia de la policía y con la certeza de que, como se dice en el lenguaje metafórico de la prisión, los carceleros les tienen guardadas sus cucharas.

Read more here: http://www.elnuevoherald.com/opinion-es/opin-col-blogs/opinion-sobre-cuba/article5705025.html#storylink=cpy

The Cuban Criminal Pipeline - Part I: Exploiting U.S. Laws

SunSentinel.com

By Sally Kestin, Megan O'Matz and John Maines, with Tracey Eaton in Cuba

Photography and videography by Taimy Alvarez

U.S. policy created for humanitarian reasons 50 years ago has fueled a criminal pipeline from Cuba to Florida, enabling crooks from the island to rob American businesses and taxpayers of more than $2 billion over two decades.

A yearlong Sun Sentinel investigation found money stolen in the United States streaming back to Cuba, and a revolving door that allows thieves to come here, make a quick buck and return.
Cuba has become a bedroom community for criminals who exploit America’s good will.
“There’s a whole new sub-class of part-time residents that flow back and forth,’’ said Rene Suarez, a Fort Myers attorney who represents Cubans charged in criminal schemes. “They tell me stories and live very comfortably in Cuba with the illegitimate money that they’re able to obtain here in the United States.”
The Sun Sentinel traveled to Cuba, examined hundreds of court documents, and obtained federal data never before made public to provide the first comprehensive look at a criminal network facilitated by U.S. law.
The Cuban Adjustment Act of 1966, a remarkable act of Congress passed at the height of the Cold War, gives Cubans advantages over every other immigrant group.

Cubans are allowed to enter the United States without visas or background checks of their criminal histories in Cuba. Unlike other immigrants seeking political asylum, Cubans can return home without jeopardizing their status, aiding crime rings that recruit accomplices and hide stolen money in Cuba.

The law has remained largely unchanged while financial and travel restrictions between the two countries have loosened, priming the system for abuse.
Strained relations between the countries make it nearly impossible to capture criminals who flee to the island. They also make it nearly impossible to deport criminals to Cuba after they serve their sentences in the U.S., as would be the case with criminals from most other countries. The crooks can stay here, free to steal again.
Cuban crime rings are staging car accidents for insurance fraud, hijacking trucks, and selling their Medicare numbers to provide for their families in Cuba. They’re smuggling money from these illegal enterprises on charter flights to Cuba, paying mules to take cash back and wiring dollars through Western Union.

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“Some of these folks are basically funding life in Cuba for their families,” said Miami-Dade Police Lt. Jose Gonzalez, whose detectives dismantle marijuana grow houses run mostly by Cuban nationals. “These people are going to Cuba weekly or monthly. These are citizens of Cuba commuting here to work.”
This free flow of criminals and cash has made a mockery of the two pillars of U.S. policy toward Cuba: the trade embargo designed to financially choke the Castro government and the special immigration rules that envisioned a one-way path for Cubans to escape communism.
Cuba’s state-controlled economy benefits from the illicit money. In one South Florida insurance scam alone, ringleaders sent millions back to the island and the Cuban government seized $200,000.
Long known as a safe haven for fugitives from America and other countries, Cuba now is harboring scores of its own citizens wanted for economic crimes in the U.S.

Fugitive Angel Ricardo Mendoza is a lifeguard at this beach in Sante Fe, Cuba. Mendoza is wanted on charges of diverting a truck with $180,000 in nickles from the Federal Reserve in 2004. Agents never found $45,000 or Mendoza, who still carries his U.S. identification cards.

The Sun Sentinel found and interviewed fugitives living openly on the island, including one wanted on charges he stole a semi-trailer loaded with $180,000 in nickels from the Federal Reserve. Another, charged in a $1 million credit-card fraud ring, had boasted that he went to the U.S. to steal and taunted authorities to “come to Cuba to look for me.”

In unveiling his initiative to “promote greater openness with Cuba” last month, President Obama did not address whether immigration rules should be tightened, or whether the U.S. will be able to deport some 34,500 convicted Cuban criminals and force Cuba to return fugitives never brought to justice here.
Members of Congress interviewed about the Sun Sentinel’s findings say the ease with which Cuban criminal networks can operate in the U.S. must be part of a wide-ranging discussion on increased engagement with the country that has stood as America’s nearest enemy for five decades.

Special Status

Criminals are corrupting the intent of the Cuban Adjustment Act: to provide refuge to those fleeing Fidel Castro and communism.
Cubans need only touch U.S. soil to be admitted to the country. They’re automatically considered political refugees and are immediately eligible for welfare, food stamps and other assistance. After a year and a day, they can obtain permanent residency, known as a green card.
Immigrants from other countries can wait years for visas just to be admitted to the U.S., and then wait years more for government benefits. Those fleeing persecution risk losing their asylum if they return to their home countries before becoming U.S. citizens.
More than 1 million Cubans have come to the U.S. since the 1959 Communist revolution, creating one of America’s most prosperous immigrant communities. While the overwhelming majority are law-abiding, a small faction has come to specialize in certain, mostly economic, crimes.
The federal government has long pointed to the prevalence of Cuban immigrants in Medicare fraud, as first reported in the Miami Herald, but authorities never quantified it. The Sun Sentinel analyzed court bookings data and found that Cuba natives, operating primarily in South Florida, are so prolific they account for less than one percent of the U.S. population but are responsible for 41 percent of arrests nationwide for health-care fraud.
The reach of Cuban crime rings extends far beyond ripping off the U.S. government health program for the elderly and disabled.
In Miami-Dade County, where 24 percent of the population was born in Cuba, immigrants from the island account for 73 percent of arrests for health-care fraud; 72 percent of arrests for cargo theft; 59 percent of arrests for marijuana trafficking; and half the arrests for credit-card and insurance fraud.

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Crime wave

U.S. policy gives Cubans special treatment over every other immigrant group, facilitating an underground criminal network that has spread from South Florida throughout the nation. Immigrants born in Cuba are disproportionately represented in arrests for certain crimes. Here are the percentages of arrestees since 2000 who were Cuban-born:

Arrests in Miami-Dade County*

24% of the county's population is Cuban-born

Federal arrests in Florida

4 percent of the state's population is Cuban-born

Federal arrests nationwide

Less than 1 percent of the U.S. population is Cuban-born

*Miami-Dade County statistics include state and federal charges.
Source: U.S. Department of Justice, Miami-Dade Clerk of Courts, U.S. Census Bureau. Population estimates are based on the 2013 five-year average. Federal arrest data from 2000 to mid-December 2014. Miami-Dade arrest data from 2000 to June 2014.

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Among Cuban-born defendants sentenced to federal prison for these crimes, two out of three are still Cuban citizens.

Their take: more than $2 billion since 1994, a conservative tally based on restitution ordered in federal cases and a Sun Sentinel sampling of state cases in Florida.

Alex Acosta, former U.S. Attorney for the Southern District of Florida, said Medicare thieves alone steal more than $2 billion each year in South Florida.

“The United States has opened its doors to Cuban refugees under the Cuban Adjustment Act,” said Acosta, the son of Cuban immigrants who is now dean of the Florida International University law school. “That is an extraordinary immigration offer that the United States has done for political and humanitarian reasons, and it is offensive that these individuals are abusing that.

“It’s equally offensive that the Castro regime is allowing them to do so and profiting from crime in the United States.”

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The close ties that the criminals have to Cuba and the involvement of many new arrivals has spurred speculation among investigators, prosecutors and even members of Congress about whether the Cuban government is behind the fraud. Cuba denies it.
The Sun Sentinel’s review of hundreds of court cases found many of those charged had arrived without visas and would have been refused entry and sent home had they not been Cuban. Others were convicted repeatedly of ripping off businesses and the government, but could not be deported.
Among them:
⚫ A Cuban national convicted twice for theft before he joined a Palm Beach County credit-card fraud ring that stole $750,000.
⚫ Another who allowed his name to appear as owner of a North Miami Beach pharmacy that stole $695,000 from Medicare in two months; he was paid $10,000 for his signature and $40,000 to go back to Cuba.
⚫ Two Miami Cuban citizens with multiple convictions who are charged as leaders in a 48-person, multi-state ring that stole $500 million in prescription drugs from Medicaid.
U.S. policy toward Cuba has made America an easy mark for criminals coming from an impoverished nation, said Scott Stewart, vice president of analysis at Stratfor, a global intelligence firm based in Austin, Texas, and author of a report on organized crime in Cuba.
“We’re so rich, and we’re so close,” he said. “It’s a very good environment for them to operate in.”

Cash to Cuba

A massive South Florida fraud ring that stole millions from auto insurers in recent years shows how U.S. policy benefits the criminals and allows them to easily return with ill-gotten cash, a possibility policymakers never intended.
The $18 million fraud involved 21 clinics in Palm Beach and Miami-Dade counties and more than 100 mostly-Cuban participants. They staged accidents, smashing cars with a sledgehammer, and billed insurers for treatment of nonexistent injuries.

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Ties to Cuba

A ring that staged car accidents in South Florida involving 21 clinics and $18 million in fraudulent insurance claims shows how Cuban criminals have exploited U.S. policy meant to provide refuge for those fleeing communism. Ringleaders frequently traveled back and forth to Cuba, smuggled millions to the island and fled there to avoid prosecution.

Travel Connections Money Deportation Fugitives

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The masterminds were Cuban immigrants, Lazaro Vigoa Mauri, then 45, and Vladimir Lopez, 38, who traveled back to the island as often as every month during the scam, according to a 2013 indictment charging them with fraud and money laundering.
Lopez spent most of his time in Cuba, former employee Carmen Venegas testified. “He was here, then he would go back to Cuba, but he was traveling constantly — every 15 days, on the weekend, every 20 days.”
The leaders employed new arrivals who came without visas and were allowed entry into the United States under the Cuban Adjustment Act. At least three other participants had been ordered removed for previous crimes but were still here because Cuba refuses to take back most deportees.
The criminals took advantage of U.S. policy intended to help Cubans resettle and occasionally return for visits, using those trips home to smuggle millions from their illegal ventures back to the island.
“Individuals were buying properties and taking money to Cuba, and they were also having other individuals smuggle it to Cuba for them,” South Florida IRS agent Pamela Martin testified at a 2013 court hearing.

One had three houses in Cuba — a notable achievement on an island that legalized private property sales only three years ago.
The owner of one clinic scammed insurers out of more than $400,000, smuggling much of it to Cuba on commercial charter flights, a former employee admitted in a plea agreement.
Another left Cuba on a raft, became a massage therapist at one of the clinics and then started his own. He withdrew thousands from his clinic’s bank account and sent it in $500 increments to relatives in Cuba “via friends who were traveling there,” he told agents.

The leaders escaped. Vigoa, Lopez and three others fled to Cuba, where U.S. authorities can’t touch them. Vigoa returned to his hometown of Pinar del Rio, his ex-girlfriend told agents, and had a cousin send his furniture from West Palm Beach.
Cuba’s safe harbor had a price, records show. One fugitive, Martin testified, “had a couple hundred thousand dollars seized by the Cuban government” for unjust enrichment, a charge Cuba levies against people with too much unexplained money.
Criminal defense lawyers told the Sun Sentinel they know of other fugitives who returned to Cuba and had to give the government a cut of their money.
“If people are not in a position to pay off public officials to the amount and degree they demand, they sometimes wind up in jail until they come up with the amount,” said Samuel Rabin Jr., a Miami defense lawyer. “Some of them pay a significant amount of money and are never jailed.”
These criminal enterprises also generate millions of dollars that find their way into the government-run Cuban economy.
The million-dollar credit-card fraud ring in Texas paid for trips to Cuba and sent Western Union money orders back to relatives. A Tampa ring bought gift cards and electronics with counterfeit credit cards and shipped goods to the island. And a South Florida marijuana cultivation ring funded major renovations to homes in Cuba with luxuries ordinary Cubans could not afford: new appliances, tile, custom crown moldings.
“There’s a tremendous amount that I’ve seen in my cases of underground money that goes there,” said Humberto Dominguez, a Miami criminal defense lawyer. “It’s huge.”

Commuters from Cuba

Recent changes by both countries have made it easier for all Cubans to commute between the two. The Obama administration in 2009 loosened restrictions on Cuban Americans visiting and taking money to the island. The Cuban government eliminated exit visas in January 2013, allowing its citizens to travel to the U.S. and stay up to two years without losing their homes and benefits in Cuba.

Obama is now moving to loosen U.S. limits on travel and money to Cuba even further, allowing export of more categories of items to Cuba and permitting banks to open accounts in Cuba.
“I think this is going to increase crime here,” said Suarez, the defense attorney. He says he has already seen an increase in Cubans commuting to the U.S. to commit crimes.
“They come here to make some money for a few months and then they go back until that money runs out, and then they come back to make some more,” he said. “Folks can live over there very, very well with the money they make in a few months here in Florida sitting on a [marijuana] grow house.”

That was Juan Sanchez Sotolongo’s plan. Three months after he arrived from Cuba last year, police found him growing marijuana at a west Miami-Dade house.
Sanchez Sotolongo told a detective he was “visiting from Cuba and he was just trying to make some money to go back home.”
After a court appearance, he was caught trying to board a flight to Havana and is now serving a 3.5-year prison sentence for marijuana trafficking.
Many Cuban Americans who long ago established roots in the U.S. say the back-and-forth travel, even for legitimate reasons, exploits a policy that envisioned an open, but not revolving, door.
“Look, how many people went back to Russia or the Soviet Union or back to Hitler, back and forth and did business?” said Jaime Suchlicki, director of the Institute for Cuban and Cuban-American studies at the University of Miami. “I mean, C’mon, this is crazy.”

Juan Sanchez Sotolongo

‘Don’t go to Cuba on me’

Cuban fugitives are escaping to the island after bonding out of jail and on the eve of their trials.
“It’s easy as 1-2-3 now,” said Joseph Houston, owner of Liberty Bail Bonds in Naples. “They’ve opened the doors wide open.”
They leave by plane or boat, or cross into Mexico from Texas and then go to Cuba. If courts confiscate their passports, they can obtain replacements or fake documents. Some are stopped at travel checkpoints, but countless others get through by sneaking out of the country or leaving before arrest warrants are issued.

Once in Cuba, they’re safe from American authorities. When fugitives run to other countries, the U.S. can typically have them extradited.
“The first time a bondsman called me and said, ‘He’s gone back to Cuba,’ I said, ‘Are you crazy?’” said Rolando Betancourt, a Miami-based bounty hunter.
Former bondsman Nidia Diaz of Miami said she left the business after a dozen Cubans skipped out, leaving her to repay thousands to the courts. “What takes us by surprise is we never encountered this problem with Cubans before,” she said.
Lilia Casal-Perez posted bond for a West Palm Beach woman after her arrest in a grow house. “I told her, ‘Don’t go to Cuba on me.’” She did.

When a marijuana lab exploded inside a Kendall West house in September 2012, blowing off the roof and doors and damaging nearby homes, the occupants — a couple with a baby and an 8-year-old — ran out, hopped in their cars and sped away.
“They were saying in Spanish, ‘Let’s go, let’s go!’” said Miami-Dade Police Detective Guillermo Cuba.
Within two days, police told the Sun Sentinel, Erisbel Velasco Herrera and Maylen Del Castillo Sanchez were back in Cuba.
Ibrahim Cueto Bernardo caught a charter flight from Miami to Cienfuegos, Cuba, on the morning he was to stand trial for auto-insurance fraud in Tampa. The 2012 trial continued without him, and he was convicted. His public defender filed an appeal, at taxpayer expense.
Yudiel Muro Escalona, a new arrival from Cuba charged in a counterfeit credit-card ring, disappeared the day after police came to his Miami house to arrest him. His mother told agents he returned to Cuba and was living in Artemisa, a city near Havana.

Harboring fugitives

Angel Ricardo Mendoza, 52, is on Interpol’s wanted list for stealing $180,000 from the U.S. Federal Reserve. He lives in a Cuban fishing village only about 100 miles from Key West, but U.S. officials can’t touch him.
A Cuban citizen, Mendoza was a Miami-based truck driver when he admitted he stole a tractor-trailer loaded with newly minted nickels bound for New Orleans in 2004. He drove the haul to southwest Miami-Dade, where accomplices buried the loot in the backyard of a house with 88 pot plants inside.
Federal agents never found $45,000 of the nickels, or Mendoza.
The Sun Sentinel tracked him down in Santa Fe, on the northwest side of Havana. He works as a lifeguard and lives a few blocks from the beach in a modest house with a large picture of the Virgin of Guadalupe on the wall. He still carries his green card and Florida driver license.

Angel Ricardo Mendoza

Angel Ricardo Mendoza's home (toward the back of this building through the gate on the right) in Santa Fe, Cuba.

Mendoza said he couldn’t resist the opportunity he saw in those 900 bags of nickels.
“Damn! 15 palettes full of money!” he told the Sun Sentinel. “I committed a crime I shouldn’t have.”
Mendoza, who had been in the U.S. for 13 years, high-tailed it back to Cuba. Federal officials said an accomplice wired Mendoza money, but he claims he took none of the loot.
He said he spent more than a year in jail in Cuba after he returned, although he did not know why. Other fugitives in Cuba have been jailed or fined for illegally bringing money into the island or for immigration violations, bail bondsmen and criminal defense lawyers told the Sun Sentinel.

An extradition treaty between the U.S. and Cuba, signed more than a century ago, is not recognized by either country. Cuba has historically harbored about 70 murderers and hijackers from America and other countries who fled there in the 1970s and ’80s, and in the past decade has increasingly become a refuge for its citizens fleeing prosecution in the U.S.

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Cuba is known for sheltering Medicare fraud fugitives, but has expanded its safe harbor to droves of other criminals.
More than 500 Cuban-born fugitives have outstanding arrest warrants for federal charges in the U.S., and another 500 on state fraud and drug charges in Florida, though their whereabouts are unknown. The FBI has estimated 30 to 50 health-care fraud fugitives went to Cuba. The Sun Sentinel, through court documents and interviews, determined that at least 50 more fled to the island, wanted for other frauds or marijuana cultivation.
A U.S. State Department spokesman said the U.S. “repeatedly raises their cases with the government of Cuba.”
A senior Cuban government official, also speaking on condition he not be named, said the U.S. expects information on fugitives “but doesn’t give it. The U.S. government is to blame because it hasn’t created the conditions for cooperation.”
Over the past decade, Cuba has agreed to the return of about 10 fugitives, most of them non-Cubans.

Catch me if you can

Life for U.S. fugitives in Cuba ranges from ordinary to opulent.
Jorge Emilio Perez de Morales Sante, wanted on charges he laundered $238 million stolen from Medicare, some of which ended up in banks in Cuba, has a two-story waterfront home on Quinta Avenida (Fifth Avenue) in an exclusive neighborhood of Havana. Nestled among palm trees and facing the Florida Straits, the home is down the street from a Cuban vice president and luxurious by Cuban standards.

Medicare fraud fugitive Jorge Emilio Perez de Morales Sante escaped to Cuba, where he has this waterfront home in Havana facing the Florida Straits. Inside, the walls are lined with colorful artwork.

A woman answering the door and calling herself a caretaker said he wasn’t home. “That’s all I can say,” she said.
The Sun Sentinel found another fugitive from U.S. justice living in a far more modest, sparsely furnished home in Santa Clara in central Cuba.

Livan Moya Tagle, charged in a million-dollar Texas credit-card fraud ring, told the Sun Sentinel that he stole to feed his family, and that Cubans go to the U.S. for economic opportunity. “No one leaves because of politics,” he said.
Moya wrote a rambling letter to the judge in his case in 2013, trying to clear his co-defendants and saying he fled to Cuba “with a great quantity of money.”
American authorities naively think “Cubans who leave Cuba hate the Cuban government,” he wrote. “I went to the U.S. to steal, to damage the U.S. Government.”
Moya included his return address and dared officials to get him.
“Come to Cuba to look for me,” he wrote. “Do it if you can.”

February 2013 letter from Cuba sent by fugitive Livan Moya Tagle to a Texas judge handling his credit card fraud case. See it bigger