Rivera’s Secret Deal
Country Of Uninsured
Hialeah Casino a GO
Inmate IRS Scam
Half a million dollars in secret payments from the owners of Flagler Dog Track.
50 million non elderly Americans have no health insurance
After 3 years of court, state green lights casino gambling at Hialeah Park.
An I-Team speacial report shows inmates receiving millions in IRS scam
News Magazine R E A L .
L O C A L .
N E W S .
D E L I V E R E D .
South Florida Home
PRICES MAY REBOUND In 2011
January 2011 | Pinecrest Edition | www.cbs4newsmagazine.com
CBS4 News Magazine | CONTENT
MESSAGE FROM THE CBS4 NEWS MAGAZINE ******************
Dear Pinecrest Resident, South Florida Home Prices May Rebound In 2011! 31 As 2010 draws to a close, real estate watchers are keeping an eye on the South Florida housing market. Nationally, analysts predict that the market will “bottom out” in 2011. Some forecasters think we’ve already hit bottom here.
Congressman Elect David Rivera’s Secret Dog Track Deal. 7 State Attorney’s Office is investigating more than half a million dollars in secret payments from the owners of Flagler Dog Track to a company operated by Congressman-elect David Rivera’s mother.
Jobless Get Little Sympathy From Gov. Scott’s Team 19 If Governor-elect Rick Scott has his way, South Floridians who are out of work for three months may find their unemployment benefits cut off if they don’t do community service.
Condo Residents Want Answers After Home Damage 9 Jozefa Sontag must cross a police crime scene tape to gain access to her Sunrise home.
Goodbye CBS4.COM; Hello CBSMiami.com 21 The new Web site continues to feature the winning news produced by CBS4 reporters and South Florida’s largest team of digital journalists
Country Of The Uninsured 11 According to the study, the number of nonelderly uninsured Americans stood at 50 million in ‘09. Smart Spending When Buying Organic Foods 13 More and more people are buying organic foods even though they often cost more. State Regulators Approve Insurers Rate Increase 15 After three years of trying to control rates, state regulators have approved more than $700 million in rate increases.
4 | January 2011 | Pinecrest Edition
Audit Shows Extent Of Inmate IRS Scam 23 Prison inmates and IRS investigators alike say this tax refund scam has been going on for decades. State Green Lights Casino Gambling At Hialeah Park 25 The new Web site continues to feature the winning news produced by CBS4 reporters and South Florida’s largest team of digital journalists.
The CBS Channel 4 news team we would like to thank you for allowing us into your home. The CBS4 News Magazine Pinecrest Edition, a complimentary publication, is a unique and local source of news dedicated to providing professional, relevant and award winning journalism. The CBS4 News Magazine will be arriving monthly to you and every Pinecrest residence via the U.S. Post Office. In addition, our current edition can be available 24 hours a day in digital format at www.cbs4newsmagazine.com. Sincerely, Staff at the CBS4 News Magazine.
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5 | January 2011 | Pinecrest Edition
Congressman Elect David Rivera’s Secret Dog Track Deal The Miami Dade State Attorney’s Office is investigating more than half a million dollars in secret payments from the owners of Flagler Dog Track to a company operated by Congressman-elect David Rivera’s mother. The bulk of the payments were made in 2008 after Rivera successfully helped lead a countywide referendum to allow slot machines at pari-mutuel facilities such as Flagler. “We are certainly cooperating with authorities in doing anything we can to resolve this,” Flagler CEO Barbara Havenick told CBS4 News. Flagler’s attorney, Roberto Martinez, said the organization did nothing wrong and that the contract they entered into for Rivera’s services was perfectly legal. Sources familiar with the investigation say prosecutors are still trying to determine if any laws were broken and whether Rivera received any of the money paid to Millennium and if he deliberately tried to hide that income. Rivera has always denied he was paid for his work during the referendum and Rivera has never reported any income from the campaign on any of his financial disclosure forms. In the past six weeks, investigators have issued “dozens” of subpoenas for banking and other records relating to Rivera and the gambling issue, according to sources. Thursday afternoon, Rivera again denied he personally received any of the money paid to Millennium. “Mr. Rivera has not been contacted about any investigation, nor do we believe there are any grounds for an investigation,” Rivera Spokeswoman Sarah Bascom said in a
statement. “We will not be commenting on any alleged investigation.” Prosecutors recently obtained a copy of a consulting contract which contains Rivera’s signature. CBS4 News was allowed to review a copy of the 2006 consulting agreement which detail what Rivera’s duties would be in the 2008 referendum campaign. Rivera would “Act as Top Leader of Chain of Command of All Campaign Consultants & Campaign Activities” and included in his responsibilities was the “Identification & Neutralization of Opposition.” The contract states that in return for Rivera’s services, Millennium Marketing Inc. would be compensated. According to Flagler attorney Roberto Martinez, it was Rivera’s idea for all payments to be made to Millennium. Millennium’s president is Ileana Medina and its vice president, secretary, and treasurer is Rivera’s mother, Daisy Magarino. The company reportedly operates out of a townhouse at 1316 SW 135th Place, but a woman answering the door recently refused to answer any questions. Medina, who is Rivera’s Godmother, also refused to respond to questions. Under the contract, Millennium was paid $50,000 immediately after the contract was signed in November 2006. Then starting in January 2007, Millennium earned an additional $18,181 a month in consulting fees until the referendum occurred on January 29, 2008. As a result in February 2008, Millennium was paid approximately $210,000.
$510,000. But according to the contract reviewed by CBS4 News, Millennium is also entitled to a second bonus of another $500,000. Under the terms of the contract, because the referendum passed, Millennium accrued $20,000 a month in bonuses for the 25 months following the election. That money has not yet been paid to Millennium because, according to Martinez, neither Rivera nor Millennium has asked for the money. Instead they are allowing Flagler to hold it for them. One of the oddities of the arrangement between Flagler and Millennium is that none of the money was paid through the Political Action Committee the owners of Flagler Dog Track set up to run the slots campaign. Flagler and Calder Race Course each contributed more than $3 million to the Vote Yes For A Greater Miami Dade PAC and used that money to hire scores of political consultants. Those payments were all reported on the quarterly campaign finance reports the PAC was required to file. By not paying Millennium through the PAC, Flagler avoided making those payments public. Martinez, Flagler’s attorney, said the track was not trying to hide its payments for Rivera’s services. He said the agreement with Rivera pre-dated the establishment of the PAC. But it does appear that the Havenick family, owners of Flagler Dog Track, has tried to hide their business relationship with Rivera.
And because the referendum passed, Millennium was paid a $250,000 bonus in March 2008.
A few weeks ago, before the existence of the secret contract between Flagler and Millennium was confirmed, Flagler Vice President Isadore Havenick denied Rivera had been hired for the 2008 slots campaign.
Total payments to Millennium: More than
continued on page 19 7 | January 2011 | Pinecrest Edition
Condo Residents Want Answers After Home Damage SUNRISE (CBS4) – Jozefa Sontag must cross a police crime scene tape to gain access to her Sunrise townhouse. Tuesday, she and her husband visited their home for 16 years in Spring Tree Cove West to retrieve a few items. She broke into tears thinking that a canal collapse has put in jeopardy her ability to ever come home again. “My heart is broken,” she told CBS 4? S Carey Codd. “I work 30 years in the United States so I can have home. I pay the mortgage and everything.” She said she and her family recently redid the floors and bathrooms to make the home even more comfortable. But since December 16th, she and 6 other families have been unable to live in their homes. The canal behind their row of townhouses swallowed up large chunks of their backyards and the homes have been declared unsafe. Tuesday night residents learned that the city of Sunrise developed a plan to rebuild their backyards and rebuild the canal wall behind their homes. City manager Bruce Moeller told residents he expects to put the finishing touches on the plan and bid the project over the next few weeks. They estimate the repairs will take another three weeks. If all goes to plan and the buildings have no significant structural damage, residents could return by mid-February. Residents are cautiously optimistic. “I think it’s real good,” said longtime resident Louis Sasso. “I think it’s gonna get us in there as soon as possible.” “I’m hopeful that if his words come true next week than I’ll be hopeful I’ll be in my house in February,” said Lester Diaz, who recently bought his home with his wife and two children. “I’ll be happy that we can keep the house we fought so hard to get.” Moeller said the city believes either Broward County or the homeowner’s association are responsible for the land. However, he said the city will pay the several hundred thousand dollars for repairs because it’s the right thing to do. “In these situations it’s classes,” Moeller said. “Everybody looks at everybody else trying to figure out the blame or the cost to somebody
else. That’s not going to help our residents. The finger pointing, the figuring out who has to pay the cost that we can work on once we get the work proceeding.” Moeller said the city has discovered information that the homeowner’s association was warned of problems with the canal in 1993. He also said the county took over the property that fell into the canal several years ago after the HOA failed to pay its’ taxes. However, the HOA was supposed to make repairs, Moeller said. “The homeowners association actually submitted the application in 2003 to do the work but the work was never actually performed,” Moeller explained. “What we’re gonna try to understand is why that work wasn’t done and whether that failure to build the canal banks properly contributed to this event.” Diaz returned to his home on Tuesday to pick up tools and some leftover Christmas presents for his two daughters. He is angry that no one — the city, Broward County, or the homeowners’ insurance companies — have stepped up to take responsibility. “It’s a little bit like mental torture because nobody’s given us any information about who’s at fault and what they’re gonna do to fix it,” he said. Sunrise Mayor Mike Ryan told CBS 4 News’ Carey Codd that engineers have come up with a plan to stabilize the ground near the canal and rebuild the canal wall. He said
determining who is responsible will come later. “It’s a complicated process and not an easy fix,” Ryan said. Diaz said he and his family are staying in a relative’s rental home but just for a few days. After that, he’s not sure where they will go. He and other residents said they are not in a financial position to pay the mortgage on their homes while also paying rent for another home. Diaz works the phones from morning until night trying to get answers. He said a group of engineers gave him some bad news. “From the 3 engineers we spoke to yesterday they said if you don’t act now you’re going to be looking at worse damage,” he said. Residents, including Diaz’s wife, Angela Boisvert, attended a meeting Tuesday night, December 21, with city leaders to try and get answers. “I just want to make sure someone is looking at my house and it’s not gonna fall into the canal,” Boisvert told Mayor Mike Ryan. She also said the ordeal left her oldest daughter frightened. “My daughter doesn’t want to live there anymore,” she said. “My 7-year-old has said she doesn’t ever want to move back in. It was her room right above the water.” Ryan called this “a community problem” and continued on page 11 9 | January 2011 | Pinecrest Edition
Country of the uninsured 50 Million Americans Have No Health Insurance MIAMI (CBS4) – A new study from the Kaiser Foundation is giving a grim view of the state of health insurance in the country as the new GOP leadership in the House of Representatives prepares to try and systematically dismantle health care reform. According to the study, the number of nonelderly uninsured Americans stood at 50 million in ‘09. That was an increase of 4.3 million people from the previous year. The reason behind the decline was believed to be the economic collapse of the Great Recession. The 9.8 percent unemployment coincided with the increase of nonelderly uninsured Americans because the majority of that demographic receive health insurance through their employers. As jobs disappeared and firings increased, the uninsured population grew. Nearly one-third of Americans between the ages of 19 and 29 years old now are uninsured. A total of nearly 20 percent of Americans now lack health care. Overall, according to the Huffington Post, the number of uninsured Americans is now greater continued from page 9 “We don’t think it’s city land but that doesn’t change our view of what we need to do,” Ryan told CBS 4 News, at the December 21 meeting. “It’s not good for our city for these buildings to be lost. It’s not good for these families and it’s just the right thing to do. So we’re gonna try to figure out what it takes to stabilize them. If no one else is gonna step then we’re gonna have to move forward and try to fill that gap.” For now, the problem affects 7 town homes that are blocked off with a Sunrise Police Officer sitting guard outside. Residents said they are only allowed in for a
than the population of Spain. Not only were the uninsured impacted, but the average annual premium paid by workers for health insurance rose 30 percent in 2010. The study found that more than three-quarters of the uninsured come from working families and that four in ten of the uninsured are individuals and families who are poor (incomes less than the federal poverty line). The Kaiser Foundation report also found that the lack of insurance is also preventing causing one-quarter of those without insurance from getting needed medical care in 2009. In addition, in 2010, 27 percent of uninsured adults used up all or most of their savings paying medical bills. Nearly 50 percent of uninsured households had $600 or less in total assets, excluding cars and/or a house. The cost of uninsured to taxpayers in 2008 also jumped to $57 billion in 2008 and 75 percent of the total ($42.9 billion) was paid by federal, state, and local governments, the study found.
maximum of 30 minutes at a time to retrieve items. Louis Sasso has had to go back to his home to gather medications for his heart condition and diabetes. He said there was a problem about a year and a half ago with erosion but nothing like this. He said he and others cannot afford to pay a mortgage on a house they can’t live in and rent on an apartment they don’t need. “I really can’t take much more of this,” Sasso said. “I want my house fixed in the back and I want to get back on with my life.” All the affected residents said they have contacted their insurance companies and have
New Website Looks To Centralize Recalls MIAMI (CBS4) – One of the biggest problems parents face is trying to keep track of all of the recalled food and products. But, a new website is promising to house all the information in one site. The website, ClickCheckandProtect, is a Consumer Reports companion site and was started as a partnership between the National School Safety Coalition, the National Parent Teacher Association, and the National School Boards Association, according to the Chicago Tribune. The group hopes the new site will get parents to check the site and get schools to sign up for a weekly school newsletter that will also highlight recalls. Among the products the new site will focus on for safety alerts and recall notices: toys, food, medicine, and furniture. The groups behind the site said a unified site will help parents navigate through the overload of information. The Tribune noted that the CPSC announces product recalls, the FDA announces food and medication recalls, and the USDA announces meat recalls. The Consumer Product Safety Commission will launch SaferProducts.gov in March, according to the Tribune. The new database will give consumers a chance to report dangerous products and see what others have reported.
been told this issue is not covered by their policy. The question at hand is who is responsible for the land — the city, the county, the homeowner or the homeowner’s association. An association employee told the Sunrise City Manager they do not believe the land is their responsibility. Louis Gomez has lived in his town home for 6 years. He cares for two daughters and a grandchild. He said they do not have permanent housing and want answers. “(City officials) they don’t even know. So imagine me knowing who’s responsible? Nobody wants to say who’s responsible. So the only ones that suffer are the homeowners,” he said.
11 | January 2011 | Pinecrest Edition
12 | January 2011 | Pinecrest Edition
Smart Spending
When Buying Organic Foods MIAMI (CBS4) – More and more people are buying organic foods even though they often cost more. But there are ways to save money if you know which organic fruits and vegetables might be worth the extra price, and which ones probably aren’t. It comes down to the pesticides used to help grow regular fruits and vegetables. Research shows that some produce has little or no pesticide residue. So, you might want to save your money and not buy organics with those. But then there’s another list of those said to have the highest levels of pesticides, called the ‘dirty dozen.’ Dietician Leslie Bonci knows all about which foods are healthy for you, while the Coupon Mom – Stephanie Nelson – knows all about how to save you money. They are two experts when it comes to spending smart if you want to buy organic. “When y o u look
a t organic items – they don’t always look different,” said Bonci. “When it comes to organic with produce – it means without pesticides.” “It makes sense to spend extra money on organic produce when the conventional variety has high pesticides,” added Nelson.
Celery is on that list. “It does have a higher pesticide content to it. So, if you’re buying the organic, we’re not worried about the pesticide here,” said Bonci. Peaches, strawberries and conventional apples made the dirty list too. “When it comes to apples, especially for eating the peel of the apples, it makes sense to get organic apples,” said Nelson. Nectarines, bell peppers, cherries and potatoes are on the list, too. Blueberries, spinach and kale, and imported grapes round out the dirty dozen.
Also, while they’re not on the latest list, Bonci says bananas can also be a place to save.
There’s also a list of foods with the least amount of pesticides, where it may not be that different to buy conventional.
“You’re not eating the peel on this, this is just not worth that extra money,” said Bonci.
This is where people concerned about pesticides may be able to save a buck and skip buying more expensive organic versions.
It’s important to note that even with the socalled “dirty list”; the pesticide residue found was in amounts allowed by the government. And Bonci says few of us eat as many fruits and vegetables as we should.
The list of the cleanest includes produce includes onions, avocados, pineapples, kiwi, cabbage and sweet potatoes.
“Nutritionally, you’re gonna get the same benefit out of it,” said Bonci. “So, it is better if convention is what you can afford – by all means go out there and buy it.”
“ M e a n i n g conventional sweet potatoes have virtually no pesticide. So, in this case, you can get organic sweet potatoes for a pound, but why not get the conventional sweet potato at a dollar a pound?” said Nelson. “You’re saving about half because you know where to spend your money.”
Bonci says if you buy conventional and even if you buy organic, always rinse your fruits and vegetables very well with a forceful stream of cold water.
Conventional watermelon, grapefruit and sweet corn also made the Environmental Working Group’s clean list.
13 | January 2011 | Pinecrest Edition
14 | January 2011 | Pinecrest Edition
State regulators approve
INSURERS RATE INCREASE SARASOTA (CBS4) – Despite the fact that Florida hasn’t suffered any damage from a major hurricane in the last five years, most homeowners can expect rate increases from their insurance company next year. After three years of trying to control rates, state regulators have approved more than $700 million in rate increases. Insurance companies doing business in Florida claim they are still losing money because of what they have to pay to re-insurers for hurricane protection. This year they claim they lost more $100 million after paying the re-insurers. The paper found that the figures hid profits in the form of payments to affiliated companies which were inflated and cost homeowners hundreds of dollars on their bills. Since 2005, more than 2 million Florida families have been dropped by their carriers while the average statewide premium has increased 44 percent. In coastal regions, rates have doubled and tripled. Since 1998, Florida insurers have collected $20.5 billion more than they paid back in claims, $18 billion of that since 2005. Yet the industry still says it is losing money. When seeking rate increases over the past year, insurers have cited sinkhole losses,
mitigation discounts and increasing expenses for reinsurance, which is the coverage they buy from unregulated corporations that agree to pay their hurricane losses. Because a request to increase rates 15 percent or more triggers a public hearing, insurers kept their requests under that benchmark and received their approvals, sometimes for even more, behind closed doors. The increases will note be meted out evenly. Homeowners who live along the coast could see a rate increase of 20 to 50 percent, far higher than the company’s inland customers. The largest increased granted to a for-profit company was $88 million for Universal Property & Casualty. State Farm’s rate hike is expected to generate an additional $73 million on top of a 29 percent rate increase it as granted last year. The state-run Citizens Property Insurance was granted nearly $150 million in increases. The insurance industry and its advocates also blamed the government for its attempts to control rates.
Universal Property and Casualty declared $11.3 million in insurance losses for its insurance company subsidiary. But after adding back in the money Universal pays itself for management services, the company told stockholders in SEC filings that it made $29 million before taxes the first half of 2010, the newspaper reported. The holding company was still posting profits in November when its insurance carrier asked for and received a 14.9 percent hike. Most Florida-based insurance companies now are set up to pay sister companies for management services, claims adjusting or other tasks. These companies often have the same owners as the insurer and operate with no employees of their own. Because payments to affiliates are set as a percentage of premium, any rate increase to homeowners is also an increase in what the affiliates get paid. Source: Sarasota Herald-Tribune (© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
“When you charge artificially suppressed rates, it creates water behind the dam,” said former House insurance chairman Don Brown, an ardent supporter of rate deregulation and consultant to Gov.-elect Rick Scott. “It continues to pile up.” A review of U.S. Securities and Exchange Commission filings found several companies that told investors they were profitable while telling state insurance regulators the opposite.
Couture 15 | January 2011 | Pinecrest Edition
18 | January 2011 | Pinecrest Edition
Jobless Get Little Sympathy From Gov. Scott’s Team
businesses are facing a major increase in the tax they pay into unemployment compensation program.
TALLAHASSEE (CBS4) – If Governor-elect Rick Scott has his way, South Floridians who are out of work for three months may find their unemployment benefits cut off if they don’t do community service. Scott’s transition team accused those who receive unemployment benefits of only spending an average of 20 minutes a day looking for work. The team said Scott should therefore wean the jobless workers off their checks. Advisers also told Scott that after 3 months of unemployment compensation, unemployed Floridians should be required to perform community service work, similar to the way someone convicted of a crime has to perform community service work, according to the News Service of Florida.
Minimum rates are set to go up from $25.20 per employee this year to $72.10 in 2011. And while the jobless in Florida drew little sympathy from the Scott transition team, the wealthiest Floridians and visitors were cited as needing help. Scott’s team said Florida was no longer, “the yachting capital of the world.”
In Miami-Dade County, the unemployment rate stood at around 13 percent for November but has declined in four of the past five months. Nationwide, slightly fewer people applied for unemployment benefits last week, the second drop in three weeks. Some analysts say that’s a sign that the job market is slowly recovering. But Scott’s team is taking its deregulatory feeling and may seek to allow business to dramatically slash their unemployment compensation taxes. Due to the state’s high unemployment rate, just under 12 percent for the last few months,
According to the transition team, changing this could add thousands of jobs serving the yachting industry. The tough measures concerning jobs and unemployment benefits don’t only affect Florida’s jobless, but also employers. If individual taxpayers were expecting large tax breaks, they may also be out of luck. According to the News Service of Florida, Scott’s team wants corporate taxes and fees paid to the state slashed, unemployment compensation taxes slashed, and impact fees paid by developers should be done away with for at least two years. Florida Power & Light could be a big winner under Scott as well. The Scott team wants to lift regulatory limits on FP&L to generate more power from renewable energy. While an additional 40,000 jobs could possibly be created, homeowners would likely pay higher fees to accomplish Scott’s goal, according to the News Service of Florida.
continued from page 7 “He gave us advice, but he was never hired by us,” Havenick told The Miami Herald. “He knew that gambling proceeds could help the state’s education budget.” Likewise Rivera was less than candid regarding his role in the campaign. In an interview with CBS4 News, Rivera said: “What I did was support the initiative as many other elected officials did but was not paid by the campaigns at all whatsoever, one iota.” On Thursday, Rivera’s spokeswoman Bascom said: “In 2006, Millennium Marketing, a company owned by a close family friend of David Rivera’s, was contracted to provide consulting services for the Flagler Dog Track and other related companies relating to the ‘08 slots referendum. As part of that valid and legally executed contract, Rivera was designated by Millennium as its point of contact, acting as its on-the-ground strategic adviser. Rivera has never received income from either Flagler Dog Track or Millennium Marketing, Inc.” Bascom’s statement made it appear that Flagler hired Millennium and Millennium just happened to hire Rivera. But Flagler attorney Martinez made it clear in an interview that Flagler’s interest was in hiring Rivera and that it was Rivera who brought Millennium into the discussion. In fact, state records show that Millennium wasn’t even created until just prior to the agreement with Flagler was signed. When Bascom was notified of that fact, she issued a new statement, declaring: “Mr. Rivera’s first discussions with Flagler were through then-owner Fred Havenick, who first discussed with Rivera the possibility of Rivera being involved in the 2008 referendum and has since passed. Mr. Rivera met Mr. Havenick because of Mr. Rivera’s extensive involvement in the 2005 referendum, for which he similarly received no income. Mr. Rivera does not recall who broached the subject first, but does specifically recall being invited to Mr. Havenick’s home after the 2005 referendum to discuss the idea with Mr. Havenick. “Later on, after Mr. Havenick’s death, when Flagler expressed interest in moving forward with the idea, Mr. Rivera suggested the agreement be formally memorialized with Millennium. Flagler agreed that was the best way to proceed. Respectfully, Bobby Martinez had no participation in or knowledge of any of the discussions with Fred Havenick or any other family members after Mr. Havenick’s death.”
19 | January 2011 | Pinecrest Edition
Goodbye CBS4.com; Hello CBSMiami.com
parking. Every event has a map showing right where to go.
MIAMI (CBS4)- Just in time for the last day of Hanukkah and in plenty of time for Christmas, CBS delivered a holiday gift to the residents of South Florida, with the launch of CBSMiami.com, a new Web site that combines the best of CBS4 news with a host of new features designed to share the best of South Florida.
DEAL OF THE DAY This is an exciting new feature that will let visitors to the website purchase, online, everything from spa visits and great restaurant meals to clothing and furniture at up to half-off, and sometimes more. You can sign up for e-mail notice of the time limited deals, which like most good things, are here for just a short time…only to be replaced by another great deal the next day. People love to save, and CBSMiami is going to help them. You can find the deals, and sign up for e-mail notices of the specials, by clicking on the Deals tab on every page.
The new Web site continues to feature the winning news produced by CBS4 reporters and South Florida’s largest team of digital journalists, who create content 18 hours a day every day of the year, but it enhances that news content with a number of new features designed to make you smarter, more knowledgeable about your community, and to get information to make your day easier. CBSMiami.com delivers that information with the help of local experts, who get their information from living in the community. “It’s been a tremendous amount of work,” said Dave Game, Executive Producer for Digital Media at CBS4, and the local manager of the Web site project. “CBS Local Media in New York developed the concept, and our local team of Web journalists executed it. It takes the best that CBS4.com had to offer, and enhances it with a lot of great, interactive features we think South Florida residents will really like.” In addition to the news, which will be featured front and center on the CBSMiami home page, these new features will be showcased by a rotating, eye-catching banner designed to lead you easily into the Web site. “One of the problems with a large, complex Web site, is that we have so much to offer people sometimes have trouble finding it,” Game said. “With CBSMiami.com, we’ve simplified the design, added clear graphics, and developed ways to give you peeks into the richer content inside.” When combined with easy-to-use search features, visitors to the site should find it easy to get what they need fast. CBSMiami.com offers a number of great new features: BEST OF SOUTH FLORIDA The CBS Web team has evaluated literally thousands of shops, businesses, restaurants, and attractions as it created hundreds of ‘Best of” lists that are searchable, and which let web users quickly find a great place to eat, the best beach for kids, our best pick for second hand shops, and the like. This is an ongoing and growing project that will make us the go-to place when people want to know the best of what South Florida has to offer. To find them, just click the “Best Of” tab on any page. SOUTH FLORIDA LOCAL EVENTS GUIDE CBSMiami offers a comprehensive listing and calendar of what’s happening in one of the most vibrant regions in the world. The web team is reaching out to publicists, clubs, organizations, and event venues to gather and sort the largest online listing of things to do, kept constantly up to date, in South Florida. As our contacts grow, we will lead the way in keeping people up to date with fun things to do.We are also making it easy for organizations and individuals to post their own events, right on the Web site, and share them with the millions of people who visit CBSMiami each month. Visitors can upload pictures, share meeting agendas, and even offer details about ticket prices and
BUSINESS DIRECTORY Looking for a plumber? Carpenter? Can’t find that Chinese restaurant a friend told you about? Our online directory will help you locate it, and when found, you’ll get the location, contact info, and even a live map you can use to navigate there. Once you go, you can even rate your experience online to help the next person. Look on the Directory tab. FAN SHOP South Florida has a lot of great teams, and CBS4.com wants people to be able to show off their fan support. That’s why we’ve teamed with one of the most comprehensive on-line sports companies to offer gear for just about any team in the nation at great prices. If you’re a ‘Canes, fan, you’ll find literally thousands of Hurricanes items online. CBS4.com offers gear from more than 500 colleges nationwide, and if you prefer Pro sports, every pro team playing is represented in the Fan Shop. You can click, point, and score some great gear in the same visit where you checked the news, decided which restaurant to try for dinner, and got a great deal on a trip to the spa. Click the Fan Shop logo ENHANCED FEATURES –We’ve simplified the menus. so there are fewer places to look. –We’ve added “tags”, on-screen keywords you can use to create your own custom pages of information based on a tag. –Our new video player allows you to bring the video full screen, to share clips, and even embed our video in a blog or another site. The video is embedded right in the story, and is larger than before. –Our weather page will keep our custom Zoom Radar, realtime info from Weatherbug, and great animated, continuously updated maps and weather info direct from the CBS4 Weather Center –Our new Traffic Tracker shows you jams by color coding. You can zoom into your route, drag the mouse over the roadway, and get near real-time information about traffic speed every tenth of a mle. It’s almost addictive to use. You can even sign up to have traffic text alerts sent to your phone. –We’ve made it easier to comment on just about everything, and integrated facebook and twitter into almost every page. –We’ve added 2-way texting, so not only can we send out news alerts to cellphones, we can have users text us with news tips, to enter contests, even respond to news stories. Even with all of those improvements, CBS Local Media is continuing to explore ways to make it’s websites around the nation more interactive, more useful, and more fun to use. CBS is committed to providing the best web experience to people in South Florida, combining the expertise of local news and web professionals in South Florida with the power of CBS News and the diverse offerings of other CBS Web sites like CBS Sports.coim and CNET.com. 21 | January 2011 | Pinecrest Edition
AUDIT SHOWS EXTENT OF
INMATE IRS SCAM An I-TEAM Special Report
MIAMI (CBS4) – A US government’s audit report due to be released on tomorrow shows the Federal Internal Revenue Service ignores hundreds of thousands of potentially fraudulent tax returns filed by prison inmates serving time for other crimes. The report, by the U.S. Treasury Inspector General for Tax Administration (TIGTA), was obtained exclusively by the CBS4 I-Team and CBS News and follows an I-Team investigation into the prison tax fraud scam that costs taxpayers hundreds of millions of dollars in fraudulent tax refunds every year. Prison inmates and IRS investigators alike say this tax refund scam has been going on for decades. But the full extent of the fraud is only now coming to light. “They’ll file 10 or 20 of them (false tax returns) at a time,” said one anonymous Florida prison inmate who witnessed and participated in the scam. A Florida inmate who asked that the CBS4 I-Team hide his identity for fear he would be hurt exposing this scam, says that inmates simply file numerous 1040, 1040 short and 1040 E-Z tax forms with real names and real social security numbers but false employers, false income and often no W-2 forms attached. The CBS4 I-Team examined more than a dozen of these fraudulent forms and saw those examples in each case. The inmates would explain on the 1040 tax form that they had simply lost their W-2 form. The inmates claimed to have earned income ranging from $40,000 to $65,000. All of the employers listed on the tax forms the ITeam reviewed did not exist. Ultimately, the anonymous inmate said, the inmates who perpetrate this fraud receive fraudulent tax refunds ranging anywhere between $3500 and $6500 per inmate per fraudulent tax return.
I-Team investigator Stephen Stock asked the anonymous inmate: “How much money are we talking about?” “Millions. Millions (of dollars)” replied the inmate. According to a new report put together in September, 2010 by the US Treasury Inspector General for Tax Administration, or TIGTA, the inmate actually appeared to underestimate the extent of this fraud. You can review a copy of that report by TIGTA Audit. According to the TIGTA audit report 253,929 or 88% of all 287,918 tax returns filed by prison inmates were never screened or flagged by the IRS. The report also shows that 48,887 of those returns had no W-2 or other wage information filed with the returns. The TIGTA Audit shows that means the IRS likely paid out more than $130 million dollars in questionable refunds to those inmates who included no W-2 or other wage information with their “returns”. For another comparison: the report also shows that 249,185 fraudulent tax returns that were filed by people (other than inmates) and actually caught and stopped by the IRS prevented $1.48 billion in fraudulent refunds from being issued. The TIGTA audit shows that is a 50% increase in the number of fraudulent returns caught by the IRS in 2009. However, when you compare the number of fraudulent returns caught by the IRS and the amount that represents ($1.48 Billion) one also sees the potential amount of fraud represented by prison inmate tax refund theft. The IRS declined to go on camera to answer questions about why prison inmates continue to receive tax refund checks. So for perspective, the CBS4 ITeam went to former IRS criminal investigators to see how and why this continues to happen. “There’s a lot more fraud even in the refund crimes area there’s much more than just the prison schemes,” said Ronald “Ron” Wise, a 33 veteran of and former supervisor in the IRS criminal investigative services. Wise, along with his business partners Jose Marrero and Luis Rivera spent a combined 89 years as IRS special criminal fraud investigators before retiring and establishing MRW Consulting in Fort Lauderdale.
has no way to compare the W-2 that’s on that tax return with any source information until the end of March at the very earliest,” said Wise. “And in most of these instances these returns are filed very early in the year.” Wise and his partners agree that the IRS should do more to stop this scam. But they also say the agency is hamstrung by competing priorities and federal rules. “You would think that creating a funnel (for tax returns from prisoners to go through) would be the type of thing that you can (do to stop this fraud),” said Luis Rivera. “But you do (as an IRS investigator) have limitations. For instance 6103 (Federal tax law), which is where the disclosure provisions of the Internal Revenue Code are found, limit who has access to that information. So that’s a possible area (of reform) to look into (to stop this fraud.)” “So it really makes it difficult to catch,” said Rivera. “You do have the ability to maybe add additional pieces to the disclosure provisions (within the IRS) to maybe make the Bureau of Prisons able to screen more in detail the kind of information that goes out of prisons,” said Rivera who retired in October, 2007, after 28 years as a special investigator with the IRS. “So if you know that create funnels there and allow (the law) to give access to the information to the people maybe on the first line and maybe do something on the first line. Additionally, you’re going to have to prosecute some people.” And they say that Congress, prison officials and the U.S. Attorneys around the country also must do more to stop this prison tax scam. “It’s not just the IRS that’s being schemed,” said 28-year-veteran IRS investigator Jose Marrero. “So if you could somehow funnel the information and change some of the laws as it relates to prisoners then maybe you can at least stop it even if you can’t prosecute it.” The TIGTA audit report found the IRS actually paid out a total of at least $112 million in fraudulent refunds to prison inmates. Other federal programs caught and stopped $18 million in fraud. TIGTA’s audit report confirms that this prison tax scam, while decades in the making, has become more widespread and serious in recent years. The report calls on Congress to change law to enable the IRS better access to wage and withholding information. The IRS formally agreed to much of what is in this report. But the IRS hasn’t said what, if anything, it will do to stop or even slow down this type of theft of your tax dollars by inmates already serving time for other crime.
“The Internal Revenue 23 | January 2011 | Pinecrest Edition
PHOTOGRAPH OF THE MONTH - January 2011
A Supercell Thunderstorm Cloud Over Montana Credit & Copyright: Sean R. Heavey Is that a spaceship or a cloud? Although it may seem like an alien mothership, it’s actually a impressive thunderstorm cloud called a supercell. Such colossal storm systems center on mesocyclones — rotating updrafts that can span several kilometers and deliver torrential rain and high winds including tornadoes. Jagged sculptured clouds adorn the supercell’s edge, while wind swept dust and rain dominate the center. A tree waits patiently in the foreground. The above supercell cloud was photographed in July west of Glasgow, Montana, USA, caused minor damage, and lasted several hours before moving on.
If you have a photograph you would like to share and possibly have published please email it in high resolution to pics@cbs4newsmagazine.com.
State
Green Lights HIALEAH (CBS4) – Hialeah let out a hallelujah Tuesday over state approval of casino-style gaming at the historic Hialeah Park race track. “It is a great day for the city of Hialeah,” said a beaming Mayor Julio Robaina, flanked at city hall by state lawmakers, city leaders and representatives of the track. “This has been a long time coming, in achieving our goal of bringing Hialeah back to its golden years and golden days,” Robaina said. Hialeah Park, opened in 1925 and on the National Register of historic places, saw its heyday in a bygone era marked by champions like Citation, Seabiscuit and Seattle Slew. It was a time when horses and dogs were about all you could bet on legally in South Florida. The advent of casino-style gaming, with it’s flashing lights and clanging bells provided gamblers with a faster, flashier, more exciting way to lose money. As a result, Hialeah Park lost money. The track, familyowned since 1977, closed in 2001 and remained closed for eight years. Owner John Brunetti gave the place a multi-million dollar restoration, and reopened to quarter horse racing last year. Brunetti received assurances from local leaders that they would fight to bring casino-style action to the park.
“This was a long shot, no pun intended,” Bovo said. Long range, the plan is to surround Hialeah Park with a resort hotel, shopping mall, restaurants, clubs and a theatre.
Casino Gambling At Hialeah Park
expanding gambling at Hialeah Park – adding slots, gaming rooms, and preparing for the return of thoroughbred racing – is scheduled to get underway next month and be completed in less than a year, Brunetti said.
“This is going to be a family entertainment complex. This is not going to be just racing and casinos,” said Robaina. “This is going to be a full entertainment park.” Robaina said marketing research shows the project to be viable. It is centrally located, Robaina said, and has its own Metrorail station that is being expanded to connect to Miami International Airport. Developers estimate the eventual cost of the make-over to be $1 billion. Robaina said that, when fully complete, the project will provide “thousands of permanent jobs.” He said approval of the plan includes assurances that the historic clubhouse, grandstands and other structures will remain in place. John Brunetti, Jr., president of Hialeah Park, said private investors will foot the tab. “This is an even bet,” Brunetti said. “It’s going to happen, and it’s going to be successful.” The phase
first of
The fight ended three days before Christmas when the state issued Hialeah Park a license to operate slots and other games of chance. The bid had been vigorously opposed by competitors who already have slots. The legislature this year approved the Hialeah plan though, and last month challengers lost a court fight. Rep. Esteban Bovo, R-Hialeah, said the Miami-Dade legislative delegation and others involved in the effort had “to move mountains” to get it done.
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town they don’t dream of living in suburbia, they dream of living on the water. And that’s what is allowing the water prices to stabilize.” Zalewski showed CBS4’s Joan Murray a high rise where he says you can pick up a condo for under $200,000. He believes east of 95, we’ve already hit bottom. “Long term by 2015, a lot of people will look back and say, I wish I would have, but everyone has a different stomach for what kind of risk they are willing to take,” says Zalewski.
LeBron Buys Grove Mansion MIAMI (CBS4) – Miami Heat star LeBron James has finally made Miami his hometown. James purchased a three-story Coconut Grove mansion overlooking Biscayne Bay for $9 million.
South Florida Home Prices May Rebound In 2011 HOLLYWOOD (CBS4) – As 2010 draws to a close, real estate watchers are keeping an eye on the South Florida housing market. Nationally, analysts predict that the market will “bottom out” in 2011. Some forecasters think we’ve already hit bottom here. “We actually saw 7000 more real estate transactions this year over the last year of the housing boom, but I would preface it by saying there’s been a 40 percent decrease in the average price,” says Peter Zalewski who runs Condo Vultures, a Bal Harbour consulting firm that studies the market. “Right now the average house is selling for $220,000 but in the boom the average was $400,000. Volume is up, but the dollar value is down.” CBS4? s Joan Murray spoke to home seller Jeff Kiltie. Kiltie put his updated east Hollywood home on the market in October, priced to sell at $174,900. The house on Adams Street is in mint condition with a big bonus, an oversized backyard.
According to CBS4 news partner the Miami Herald, the sale closed on November 12 and was first reported by real estate broker Alex Shay’s real estate blog. The home has 12,178-squre-feet and is located at 3590 Crystal View Ct. It has six-bedrooms and eight-and-a-half bathrooms. The Herald reported the home also has a wine cellar, library, home theater, three-car garage, and guest house. Records showed that the home was purchased by Suite 823 Investments Florida LLC. Suite 823 is the Cleveland headquarters of LRMR Marketing, which was founded by James, controversial assistant Maverick Carter, and two other friends. (© MMX CBS Television Stations. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. CBS4 news partner The Miami Herald contributed material for this report)
“A lot of houses in this price range are beat up. They’re in foreclosure with the appliances ripped out. We spent a lot of time cleaning, painting and refinishing it. You could walk in tomorrow and move in,” says Kiltie. He’s optimistic he will find a buyer. At the height of the market Kiltie could have gotten more than double the price he’s asking. But as he said, “where would I have gone?” since so many properties were overpriced during the boom. Peter Zalewski says the bottom of the market in South Florida in 2011 all depends on where you live. “As the unemployment rate hovers, it creates a downward pressure on pricing,” said Zalweski. “The people who are affected most are in the western suburbs and that’s the marketplace where buyers from out of
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