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Suspect in case of former U.S. Rep. David Rivera to be charged with campaign finance fraud

A former candidate under FBI investigation with former U.S. Rep David Rivera is scheduled to be charged Friday with federal crimes over his campaign finances, according to the Miami Herald and El Nuevo Herald.

The charges against Justin Lamar Sternad stem from an investigation by the Herald, which first found discrepancies in his congressional campaign finance reports last August.

The FBI then began investigating Sternad, whose reports could have concealed as much as $100,000 in services and mailers, some of which attacked a Democratic rival of Rivera, who is a Republican.

Sternad is scheduled to surrender Friday morning in federal court, charged with lying on his federal campaign reports to hide the source of secret money funneled into his run for congress. Sternad is also charged with conspiring with others as part of the alleged scheme to defraud the United States.

Sternad, cooperating with authorities, is expected to plead not guilty. His lawyer, Enrique "Rick" Yabor refused comment.

Though Rivera is a target of the investigation, his name is nowhere in the indictment of Sternad, a source told the Herald.

Sternad and two campaign vendors who performed work for him have talked to the FBI and a federal grand jury to describe Rivera's involvement in Sternad's mercurial bid for Congress, which ended Aug. 14 when he lost the Democratic primary to Joe Garcia, who later beat Rivera in the general election.

A close friend of Rivera's, Ana Alliegro, worked as Sternad's campaign manager and repeatedly delivered fat stacks of cash to Rapid Mail & Computer Service, owner John Borrero told the Herald, El Nuevo Herald and then the FBI.

Another vendor, Hugh Cochran of Campaign Data, told the Herald and FBI agents that he spoke with Rivera about running computer queries to identify voters to whom the different mailers were sent.

A third vendor, Expert Printing, produced the mailers but has refused to talk to the Herald.

Rivera has denied wrongdoing or the existence of a federal investigation. Rivera couldn't be reached for comment on Thursday.

Alliegro, who was supposed to talk to the FBI in September, skipped out on her meeting with federal agents and is rumored to be overseas. Initially, Alliegro's parents and lawyer didn't know her whereabouts. Now she has been in contact with them.

Without Alliegro's testimony, federal authorities could have trouble determining Rivera's actual links to the unreported stacks of cash that funded Sternad's campaign.

Sternad became a FBI target soon after a series of stories published in the Herald and El Nuevo Herald that raised questions about his campaign during the Democratic primary. Sternad had sent out at least a dozen well-designed mailers targeted to different types of voters: environmentalists, African-Americans, immigration hardliners and those with rural sentiments.

One of the mailers, sent to women, savaged Joe Garcia for his divorce. The mailer echoed a line of attack that originated with Rivera.

Garcia's campaign, which refused comment Thursday, found the sophisticated campaign work highly suspicious for a political newcomer with no name and little money. Sternad, a married father of five and employed at a Miami Beach hotel, had financial troubles in the past.

Yet, despite the expensive mailings, Sternad's campaign-finance reports at the time listed no campaign vendors and claimed he raised only $11,383.60, which wasn't nearly enough to cover the cost of the mailers through July.

After the campaign vendors told the Herald that many of Sternad's expenses were paid in cash and far exceeded the amounts listed in his reports, Sternad then claimed he loaned himself $64,356.70 — a huge sum whose assets were minimal.

"I did not previously report this loan because I was unaware of the final monetary obligation incurred by my campaign," Sternad wrote to the Federal Election Commission.

"I have now received invoices for the expenditures," he wrote, "and this amendment represents satisfaction of those invoices."

Experts say it's a federal crime to knowingly file false federal campaign finance reports. And those who willfully and knowingly file the documents cannot necessarily escape prosecution by amending the reports after the fact.

Sternad, when it was time to file his campaign close-out report, decided to do no more harm. He filed 17 blank pages with the FEC.

And Sternad took the extraordinary steps of invoking his right against self incrimination in an Oct. 19 letter.

"On counsel's advice, I invoke my rights under the Fifth Amendment of the Constitution of the United States not to answer or submit the information requested on FEC Form 3, on the grounds that I may incriminate myself," Sternad wrote.

"Please refer all additional inquires to my attorney, Rick L. Yabor."

Soon, Sternad began cooperating with authorities. Sources say he never came directly into contact with Rivera. That was Alliegro's job. Alliegro reportedly referred to Rivera as "D.R." or as "The Gangster."

By the 2012 elections, Rivera had garnered a reputation as a bad-boy of Miami-Dade politics. He narrowly avoided a 52-count state indictment in an investigation of his personal and campaign finances.

The IRS, however, picked up where the state left off. It began examining Rivera in connection with a $500,000 contract from a dog-track, Magic City Casino, to run a pro-slot machine referendum in Miami-Dade County.

Rivera initially denied he was paid for his services. He later said the money, paid to his mother's company, was a loan so he was never really paid.

The cloud of investigations and Rivera's reversals ultimately helped doom his re-election in the newly drawn District 26 that stretches from Kendall to Key West. He lost to Garcia by nearly 11 percentage points in a district that the president, a Democrat, carried by about 7 points in November.

Miami Herald reporter Patricia Mazzei and El Nuevo Herald Executive Editor Manny Garcia contributed to this report.

Suspect in case of former U.S. Rep. David Rivera to be charged with campaign finance fraud 02/21/13 [Last modified: Friday, February 22, 2013 9:14am]

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