Suspect in Rivera campaign-finance probe to change plea to guilty

Article Courtesy of The Miami Herald

By Marc Caputo

Published March 1, 2013


A key suspect in a criminal case tied to former Congressman David Rivera will officially switch his plea to guilty in three federal charges for illegal campaign activity.

Justin Lamar Sternad’s admission of wrongdoing next Wednesday will be another sign that he’s cooperating with the federal government in its investigation of Rivera.

The FBI jumped on Sternad’s trail after The Miami Herald and El Nuevo Herald began questioning his campaign finances and expenditures during the Democratic primary for the newly drawn Kendall-to-Key West District 26 congressional seat. 

Sternad’s campaign finance reports showed he raised little money, yet he was able to produce and disseminate a dozen different types of pricey mailers — some of which attacked fellow Democrat Joe Garcia, the biggest threat to the Republican Rivera.

Garcia beat Sternad and others Aug. 14 and then defeated Rivera in the general election last November, by which point the incumbent congressman was furiously denying wrongdoing.
A federal charging document last week showed Sternad received at least $81,486 in unreported cash and checks handled by unnamed “co-conspirators.”

The fact that Sternad, a political unknown and newcomer, is being charged with criminal violations of campaign-finance laws, conspiracy and making false statements is an indication that he’s a means to an end for prosecutors, legal experts say.

“It’s very rare to see criminal charges in campaign-finance cases,” said Daniel Stein, a former federal prosecutor from the Southern District of New York.

“Conspiracy means there’s more than one person. So it’s not limited to him,” Stein said. “They wouldn’t include the conspiracy charge unless they were interested in other parties.”
Also facing potential indictment: Sternad’s campaign adviser, Ana Alliegro.

Right now, however, her whereabouts aren’t known to the general public. She was supposed to meet with the FBI in September but never showed.

At first her family and lawyer, Mauricio Padilla, told The Miami Herald/El Nuevo Herald that they were worried about Alliegro because they had no idea where she was. They are now in contact with her, but won’t discuss her whereabouts.

Without Alliegro, prosecutors could have a difficult time pressing a case against Rivera.
Alliegro is a close friend of Rivera and a self-described “Republican bad girl,” making her an unlikely choice to head up the Democrat Sternad’s campaign against Garcia during the Democratic primary.

Sternad, who has been cooperating for months with the FBI, said he never dealt directly with Rivera, but that Alliegro referred to him as “D.R.” and “The Gangster,” sources have told The Herald/El Nuevo Herald.

Rivera has been a target of the federal government for more than a year.

Prior to the case involving Sternad, the IRS began investigating Rivera for a secret $500,000 contract from the company that’s now called Magic City Casino. Rivera helped run a successful pro-slot machine campaign in Miami-Dade on behalf of the dog track.

Rivera initially denied he was getting even a “penny” from the deal. He never mentioned that he had arranged the money to flow from a company nominally controlled by his mother, who then gave the money to him, according to documents from the Florida Department of Law Enforcement.

Rivera said the money was a loan, so he technically wasn’t paid and therefore was telling the truth when he said he hadn’t earned anything from his work for the dog track.

The state attorney’s office uncovered the dog-track payment when it examined Rivera’s personal and campaign finances. FDLE wanted Rivera charged for a host of crimes. State prosecutors opted against it, due to the weakness of Florida’s anti-corruption statutes and because the statute of limitations had expired for some of the alleged crimes.

Despite all the legal scrapes, Rivera was favored by many insiders to win re-election.
But then the news about Sternad’s campaign began dogging Rivera.

Three campaign vendors who had helped Sternad had also worked for Rivera in the past. Two of them told The Herald/El Nuevo Herald and, later, the FBI that Rivera was behind Sternad’s efforts. They said Alliegro handled most of the transactions, many of them in cash stuffed in envelopes.
Under federal campaign finance laws, all contributions and expenditures are supposed to be reported. Almost none of these transactions were.

Federal campaign finance laws limited contributions in 2012 congressional races to $2,500 per donor.

But Sternad received far more than that.

Just before paying the $10,440 state fee to qualify for the ballot in early June, Sternad’s campaign was given $11,000 in cash from an unnamed source in three installments.

A night-time hotel worker who earns less than $30,000 annually, he falsely reported that money as his own, a loan to his campaign, the federal charging document, called an “information,” says.
Sternad continued to receive cash and checks that paid his campaign expenses, but which were not fully reported.

More than two months later, with the FBI on his trail, Sternad didn’t make that mistake again. He filed blank federal finance reports and said in a letter that he was invoking his Fifth Amendment rights against self incrimination.

Sternad could face five years in prison for the charges against him. His lawyer, Enrique “Rick” Yabor declined to comment.

A top criminal defense attorney, Bruce Zimet, said the fact that Sternad was charged by an information instead of an indictment is a sign he’s probably cooperating with prosecutors.
Zimet said the size of the 10-page information, which are often shorter, also indicates that prosecutors might want to send a message to other targets of the alleged conspiracy.

“There’s no reason to have lots of details in the information unless it’s meant to communicate something,” Zimet said.