Miami Federal Magistrate Judge Robin Rosenbaum recommended to federal prosecutors that they drop an obstruction of justice charge against Tom Rafanello. Rafanello, the former chief of Miami's Drug Enforcement Agency (DEA), is charged with obstruction of justice and interfering with a federal investigation for shredding thousands of documents despite a court order to leave the records intact. Rafanello's Miami criminal lawyer was pleased with magistrates recommendation. His lawyer is hopeful that the federal district judge presiding over the case agrees and throws out the remaining charges.
Rafanello, after leaving the DEA, was hired as the head of security for Allen Stanford's financial empire. Allen Stanford was arrested several months ago by federal authorities for a running a $7 billion "Ponzi" scheme through island nation of Antigua for the past decade. Stanford is currently in custody in a Houston federal correctional facility awaiting trial on charges of securities fraud, wire fraud, mail fraud, racketeering and money laundering. Days after federal authorities shut down Stanford's operation, Rafanello and another member of Stanford's security team, Bruce Perraud, destroyed reams of documents in contravention of a court order.
Jude Rosenbaum told prosecutors that they have failed to show that the shredding of the documents impeded the U.S. Securities and Exchange Commission's (SEC) probe into Stanford's massive scheme to defraud. Rosenbaum did not reject the entire case, finding evidence that Rafanello's action impeded a federal investigation. The records allegedly destroyed in the case included background checks on Stanford employees and investors. Federal prosecutors declined to comment on the preliminary ruling, but have previously argued that Rafanello and Perraud destroyed the records knowing that a judge ordered them to be preserved.
As with every economic crisis, massive schemes to defraud investors always come to light. From multi-billion dollar schemes to defraud like the one committed by Bernie Madoff in New York, to multi-million dollar schemes committed in our backyard, such as Beau Diamond's alleged Sarasota fraud, investors always suffer the consequences. South Florida and Miami fraud lawyers have been busy defending those accused of defrauding investors. With the next economic downturn, more innovative schemes to defraud will be unveiled. As the old adage goes, history always repeats itself.
Miami's EX-DEA Chief Could Escape Charge in Allen Stanford Case, The Miami Herald, November 3, 2009.