By Michael E. Miller
By Allie Conti
By David Villano
By Jose D. Duran
By Michael E. Miller
By Allie Conti
By Kyle Swenson
By Luther Campbell
For nearly a year Miami-Dade County Commissioner Bruce Kaplan has been under criminal investigation by the State Attorney's Office for allegedly providing false information on an application for a home mortgage. State Attorney Katherine Fernandez Rundle last week confirmed the ongoing probe but said she couldn't provide any specific details because the matter is still under review.
Sources familiar with the case, however, say a decision about whether to charge Kaplan could come as early as this week.
Contacted at his home, Kaplan refused to answer any questions regarding the investigation. The commissioner, whose district stretches from Miami Beach to Little Havana, has hired criminal defense attorney Steve Chaykin, a former federal prosecutor, to represent him.
The Kaplan investigation centers on the 1994 purchase of his Miami Beach home on Lake View Drive. Kaplan and his wife Janitza applied for and received a fifteen-year, $330,000 mortgage from Margaretten & Co., Inc., a local lending institution.
According to sources familiar with the investigation, prosecutors are examining whether Kaplan lied on his application to Margaretten by inflating his income, his net worth, and his assets in order to gain more favorable terms for the loan. Prosecutors are weighing a charge of mortgage fraud, a third-degree felony in Florida punishable by up to five years in prison.
Investigators have found what they consider to be inconsistencies between the information Kaplan submitted on his loan application and the financial disclosure forms he's required to file each year as a county commissioner, sources say. Last week New Times asked Kaplan to release a copy of his mortgage application, which is not a public record, so it could be compared to his financial disclosure forms. The commissioner refused.
Sources say prosecutors are also scrutinizing that portion of Kaplan's mortgage application in which he detailed his work history. In particular, they are interested in his statements about his employment with Caribbean Telephone Company, a corporation registered in the Cayman Islands and owned by Broward resident Mark Bradbury.
Kaplan's connections to Caribbean Telephone were first reported in New Times this past October. According to one of the commissioner's business partners, Matias Farias, Kaplan was hired to help market the company's operations throughout Latin America. A business agreement between Farias, Caribbean Telephone Company, and a company called Manhattan Holding Corporation (a copy of which was obtained by New Times) states that the three would develop "audiotext information services throughout Latin America and the Caribbean." Says Farias flatly: "It was phone sex."
Farias claims he was to receive 2.5 percent of all revenue generated by any phone-sex lines he was able to establish. Kaplan is identified in the agreement twice -- first as executive vice president of Caribbean Telephone Company and then as attorney of record for Manhattan Holding Corporation, a company registered in Panama. Farias says Kaplan had a similar arrangement in which he too would receive 2.5 percent of all revenue.
According to Farias, the group successfully initiated a phone-sex operation in Panama toward the end of 1992. That business continued, he says, until several months ago. Farias claims Kaplan tried, without success, to persuade Bolivian authorities to allow Caribbean Telephone to operate in their country as well.
Kaplan denied he was ever knowingly involved in the phone-sex business. "I have never been specifically retained to represent phone sex," he said carefully in October. "One of the areas of my [law] practice is telecommunications, but in no contract that I've negotiated has a reference to phone sex ever been made."
Sources say that prosecutors in the mortgage-fraud case have subpoenaed financial records from Caribbean Telephone in an effort to prove that the amount of money he earned from the company was far less than he stated on his loan application. Prosecutors believe that if Kaplan had not inflated his income, he would not have qualified for the loan.
In addition to the original $330,000 mortgage, Kaplan and his wife in 1995 obtained a second mortgage for $20,000. Prosecutors are examining that transaction as well in the belief that the company that granted the second mortgage, Peninsula Mortgage of Miami, relied on the information Kaplan provided for his original mortgage application with Margaretten.
A review of Kaplan's financial disclosure forms for the past several years reveals erratic movement in his personal fortunes. In 1993 he reported his net worth as $35,000. In 1994, the year he bought the house, it increased to $71,500. In 1995, however, he claimed that the figure had plummeted to $15,000. Last year, however, he rebounded dramatically to $118,605.
While investigating Kaplan, state prosecutors have conferred with their federal counterparts. Because most lending institutions are federally insured, mortgage-fraud investigations are generally handled by the U.S. Attorney's Office. (A recent example was the July bank-fraud and money-laundering indictment of Miami City Commissioner Humberto Hernandez.) Early in the Kaplan probe, however, investigators decided the case should remain with the State Attorney's Office, according to sources familiar with the inquiry. One of the issues influencing that decision was the fact that Margaretten was not federally insured. The lender was subsequently taken over by Chase Manhattan Mortgage Corporation, and the Kaplan loan has since been sold to GE Capital Mortgage in St. Louis. Both Chase Manhattan and GE Capital are federally insured, which would give federal authorities the right to review the loans.