Businessman Paul Raifaizen Pleads Guilty to Part in Massive Miami Taxpayer-Screwing Scam
Paul Raifaizen probably thought he'd hit the corruption jackpot when he found a crooked Miami-Dade County bureaucrat named Jesus "Jay" Pons, who promised to overpay his company for work it never did. However, Pons' scheme grew so outrageous that it toppled, ensnaring everyone involved in legal trouble. Oh, and just to add insult to injury, the bureaucrat also had an affair with Raifaizen's fiancée while all of this was going on.
Raifaizen's legal saga came to an end last week after he plead guilty to his part in the scheme.
Raifaizen was the vice president of Data Industries Inc., a New York company with a South Florida branch, that had a contract with Miami-Dade's General Services Administration (now known as the Internal Services department) to provide IT support and consulting. The 2006 contract was originally worth $760,000, but the county ended up paying out $10.7 million to the company before 2011.
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That's because Pons, a high-level manager at the GSA who also formerly sat on the Adrienne Arsht Center's board, cooked up several schemes to defraud the county out of money. Pons would claim work done by "ghost employees, who never actually did anything, while employees who did exist had their services overcharged and overstated to the county. One woman who did work but was paid just $35,000 a year, had her salary billed to the county as $350,000. A web designer charged $30 an hour, but the bill to taxpayers was $175 an hour.
The extra money instead would go to Pons and his associates (including his wife and brother-in-law) and Raifaizen in a 50-50 split.
Pons and Raifaizen would communicate with each other through fake names in emails, with Pons, by then driving a new Porsche to work, taking on the name of famed Miami Beach gangster Meyer Lansky.
In fact, the situation was so cozy for all involved that when Raifaizen found out that his fiancée was having an affair with Pons, he didn't even confront Pons and the scheme continued on as usual.
The scheme all fell apart in 2011 when a subcontractor was cut out of a project and hired a private investigator. The investigator then tipped off the county. Pons was removed from his job immediately, and in 2013 everyone involved was arrested.
Raifaizen agreed to cooperate with the investigation in exchange for immunity, but that didn't save him from a charge of filing a false tax return and failing to pay income taxes on $400,000 he earned from the scheme. He'll be sentenced in May and could face up to three years in jail and a $250,000 fine.
Pons plead guilty this past September and received a four-year prison sentence.
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