By Michael E. Miller
By Ryan Yousefi
By Kyle Munzenrieder
By Sabrina Rodriguez
By Michael E. Miller
By Carlos Suarez De Jesus
By Luther Campbell
By Kyle Munzenrieder
On July 31, 1992, eight months before the election was held, Kaplan filed his first campaign-finance report, revealing a war chest of $25,000. This was an impressive number for a newcomer, and it outdistanced his rivals at the time: Sidney Weisburd, a former Miami Beach City Commissioner; and Conchy Bretos, executive director of the Dade County Commission on the Status of Women.
At that time, no one questioned the source of Kaplan's money.
Now we know.
Kaplan helped finance his first commission race through unreported campaign contributions and money illegally funneled from the trust account of one of his law clients, according to bank records and sworn statements obtained by New Times and confirmed by prosecutors. It was both a fitting start for the unethical campaign that lay ahead and a harbinger of Kaplan's amoral tenure on the commission itself.
But more distressing than Kaplan's alleged actions is the fact that both the Florida Bar and the Dade State Attorney's Office have known about them for more than two years, yet neither agency has taken any action against the commissioner.
In the summer of 1992, Kaplan was an attorney with few clients. His primary benefactor was Mark Bradbury, a Canadian citizen who operated several companies, including Topaz Capital and Caribbean Telephone. In addition to being the attorney for Bradbury's companies, Kaplan was also hired to persuade government officials in Latin America to allow Bradbury's firms to develop phone-sex operations in their countries. Under his agreement with Bradbury, Kaplan would be paid a commission for the services he helped initiate.
Kaplan, however, aspired to be more than a phone-smut peddler and decided to run for a seat on the Dade County Commission. Although a neophyte in local politics, Kaplan understood that it was extremely important for his initial campaign-finance report to show he had plenty of money in the bank for a long race. In politics, early money can do many things: It can give an unknown such as Kaplan instant credibility; it can scare off competitors; and perhaps most important, it can help a candidate raise even more money.
The problem for any political rookie, of course, is raising that early money. Kaplan's personal finances were no help at all. Profits from the phone-sex operation were slow to arrive, he was living in a modest apartment in Miami Beach, and he still had $16,000 in student loans to pay off when he decided to run.
The one place where Kaplan could find plenty of money was in his attorney trust account. Lawyers commonly maintain bank accounts, in their own names, in which they hold money on behalf of their clients. Attorneys use the funds to pay bills and cover expenses for those clients.
Kaplan established his trust account at United National Bank on Biscayne Boulevard in July 1991. According to bank records and documents gathered by the State Attorney's Office, by June of the following year he had accumulated $36,941 in the account, $25,000 of it belonging to Bradbury's Topaz company. The rest was being held on behalf of a corporation called VMG, which was owned by one Victor Gutierrez, a South American businessman who was involved in local real estate development.
Eager to get his commission campaign off to a fast start, Kaplan asked Bradbury if he could borrow some money from the Topaz account. Bradbury would later tell prosecutors the loan was a "gentlemen's agreement" and was never committed to writing. According to Bradbury, Kaplan was responsible for paying Topaz's bills and was free to borrow any remaining money.
On June 29, 1992, according to bank records, Kaplan transferred all the Topaz money -- $25,000 -- from the trust account to his political campaign account. This left the trust account with a balance of $11,941 -- all of it belonging to his other client, VMG.
Three weeks later, however, Kaplan, as the attorney for Topaz, received a bill for $7000 from Conwol Investment, Inc., a company conducting research for Topaz in Colombia. According to a sworn statement Bradbury gave prosecutors, the bill from Conwol was not unexpected; Kaplan should have anticipated it. He also should have realized there was no money left to pay it.
At this point Kaplan had two choices. The first was obvious: He could return $7000 from his campaign coffers to the trust account to cover the Conwol bill. But the timing could not have been worse. If he withdrew the money before July 31, he would be forced to report having raised only $18,000 instead of $25,000.
So Kaplan went with Plan B.
On July 16, 1992, he wrote Conwol a check for $7000 from his attorney trust account. On the memo line was this typewritten notation: "On behalf of Topaz."
By issuing that check, Kaplan was paying Topaz's bill with VMG's money.
After Kaplan paid Conwol -- and billed VMG $2795 in attorney fees for unrelated matters -- only $2146 was left in the trust account, even though VMG should have had more than $9000 in the bank. But rather than correcting the situation immediately after the July 31 campaign-finance reporting period ended, Kaplan did nothing until September, when VMG president Victor Gutierrez sought to withdraw his money.
Backed into a corner, Kaplan transferred $10,000 from his election campaign account to his trust account on September 14, 1992, so he could issue a check to Gutierrez and also cover other bills coming in for Topaz.
Although Kaplan replaced the money he had taken from VMG, the impropriety had already been committed. He had floated himself a $7000 interest-free loan for two months from one of his clients, without that client's knowledge or consent. For an attorney, that is an extremely serious offense, one that can lead to suspension or disbarment. It also meets the legal definition of theft, says Assistant State Attorney Joe Centorino. Under Florida law it makes no difference that Kaplan eventually reimbursed his trust account. The act of taking the money without permission is a crime.
Kaplan's actions also violated a raft of state election laws. The campaign-finance report he filed on July 31, 1992, implied that he had loaned his campaign $25,000 of his own funds. Under state law, candidates are required to report the names of individuals who loan money to their campaigns. The Bradbury loan to Kaplan could also have violated federal law, as it is illegal for foreigners to contribute or loan money to political races -- including city and county elections. (Neither Kaplan nor Bradbury could be reached for comment last week.)
Investigators first detected problems with Kaplan's attorney trust account in 1995, according to sources familiar with the case. All they knew then, however, was that Kaplan had transferred a large sum of money from his trust account to his campaign. Prosecutors, who came to suspect Kaplan of mortgage fraud, decided that issues regarding his trust account should be handled by the Florida Bar. In early 1996 they forwarded their information to that professional group.
Investigators for the Bar immediately notified Kaplan, who for months delayed meeting with them to discuss the trust account. When the two sides finally did meet, Kaplan produced a letter from Bradbury stating that Kaplan had his permission to borrow the $25,000 in 1992. Kaplan assured the Bar's auditor Carlos Ruga that he had done nothing wrong. Ruga simply took the county commissioner's word for it.
Rather than inspecting the bank records himself, Ruga relied solely on material submitted by Kaplan, even though, as he noted in his final report, Kaplan "did not produce all the bank statements and canceled checks" his staff had requested.
Despite this incomplete accounting, Ruga recommended closing the Florida Bar's investigation of Kaplan. "Based upon [Kaplan's] representations, I do not see any violations of the Rules Regulating Trust Accounts," Ruga wrote in a memo to Randi Lazarus, assistant staff counsel for the Bar's Miami office.
Lazarus then notified Assistant State Attorney Joe Centorino that the Bar had found nothing amiss. The Bar's slipshod investigation disturbed prosecutors, who reacted by launching their own inquiry into Kaplan's trust account. They subpoenaed all the commissioner's bank records, as well as Mark Bradbury and VMG president Victor Gutierrez.
Based on this more thorough review, prosecutors were able to piece together a complete history of Kaplan's actions. Contacted last week by New Times, Centorino acknowledged the probe. "This was one of several matters that were under investigation," he said. He termed Kaplan's handling of his attorney trust account "inappropriate" and "technically illegal."
Centorino explained that he and his supervisors made a decision last year not to charge Kaplan -- just before the statute of limitations for theft had run out. (The statute of limitations for the campaign-reporting violations ran out after just two years.) He said several things affected that decision, including the fact that there was no public money involved and that the victim, Victor Gutierrez, didn't even know Kaplan had misappropriated (and later replaced) his money until prosecutors brought it to his attention years later. "We still believe this is a matter best handled by the Bar," Centorino noted. "When we finish our other criminal investigations of Kaplan, we will once again forward all the material we have regarding his trust account to the Bar. We expect that to be very soon."
The Florida Bar's Randi Lazarus defended her office's examination of Kaplan's trust account and said her staff did as thorough a job as possible. "But if there is new information," she added, "we would certainly revisit the matter.