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.

About this project

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