Tuesday August 7, 2012

How South Beach really runs: code enforcement extortion crackdown

Here’s a partial peek behind the curtain, curtesy of the FBI. Since it’s a press release, I’m going to cut ‘n’ paste just like I wrote it (just like the Herald would), and I’m going to delete out the boring bits:

Jose L. Alberto, the former lead code compliance officer for the city of Miami Beach, pled guilty to one count of conspiracy to commit extortion under color of official right for his participation in a scheme to extort cash payments from a South Beach nightclub. Alberto faces up to 20 years in prison.

Alberto was indicted on one count of conspiracy to commit extortion under color of official right and 22 counts of extortion under color of official right and induced by the wrongful use of actual and threatened fear of economic loss. Alberto was the second most senior official at the Miami Beach Code Compliance Division and oversaw and managed all the Miami Beach code compliance officers.

Alberto admitted that in June 2011, he solicited a cash pay-off from a Miami Beach nightclub owner in exchange for not enforcing a large fine for a code violation.

The nightclub owner reported the alleged extortion to the FBI, which commenced an undercover investigation. During the undercover investigation, Alberto accepted 22 separate cash pay-offs for a total of $16,600 from either the nightclub owner or an undercover FBI agent posing as the manager of the nightclub. These cash pay-offs were made in exchange for Alberto’s protection from potential code violations and to permit the nightclub to continue operating.

In court, Alberto also admitted that while the pay-offs were being made, he introduced various other code enforcement officers to the undercover FBI agent to help protect the nightclub. These code enforcement officers, like Alberto, also received cash pay-offs in exchange for their protection of the nightclub. Two of those officers, Vicente Santiesteban and Orlando Gonzalez, have pled guilty to conspiring with Alberto to extort cash from the Miami Beach nightclub and are scheduled to be sentenced in the coming months.

So there you have it — a pretty substantial criminal conspiracy run from inside Miami Beach city hall gets shut down. We’re left to speculate what this really means. Is it that the system is working? We’ve all heard about how the Beach is run by the mob, right? Is it that these guys didn’t have the permission of the official extortion ring (which surely would involve the Miami Beach Police Department, after all) to be doing this?

The $16,000 figure is interesting. Maybe Alberto hit up the nightclub as an experiment, and the FBI steered the direction towards high pay-offs to make a better case (in other words, he was only extorting this or a couple of other nightclubs). Or Alberto was determining the amount of the payoffs, which would suggest he had his own fee structure and that he has had been doing this a long time? If he made $16,000 from one club between June 2011 and March 2012, imagine how much you could rake in on the beach with a little ambition. It’s not like the money is that much to the club in exchange for getting to ignore the code with impunity.

I hope somebody follows this a little, because I’d love to hear what club this was, just to see what happens to them going forward. Not willing to play the game? I doubt that’d very good for business.

Photo from Flickr, via Random Pixels, where there was good reporting on this back in April, after the arrests were made.

Tags: corruption, crime, fbi, government, miamibeach