A former Hialeah Police chief arrested on grand theft and fraud charges deposited over $2 million in cash into bank accounts during his tenure and spent lavishly on everything from Rolex watches to a Mercedes lease as petty cash and seized drug money vanished from the department, according to an arrest affidavit.
The 43-page affidavit details what led to Monday’s arrest of Sergio Velazquez on charges including organized fraud, grand theft and structuring transactions to evade reporting or registration requirements. All are first-degree felonies because they involve more than $100,000.
The charges apply to only $635,000 missing from police department coffers since June of 2021, within the four-year statute of limitation for first-degree felonies.
Miami-Dade Corrections
Miami-Dade Corrections
Booking photo of Sergio Velasquez
But according to the affidavit, the city of Hialeah cannot account for some $2.6 million transferred by the city to the police department for drug investigations and another $1 million missing from cash seized from suspected criminals, all while Velazquez was the city’s top cop.
Velazquez served as Hialeah’s chief of police from 2012 until November of 2021, and was arrested following a lengthy Florida Department of Law Enforcement investigation.
According to the affidavit, after Velazquez was relieved of duty, the department was unable to account for large amounts of “petty cash” utilized by the HPD Special Investigations Section for narcotics investigations that was disbursed during his tenure.
Records showed that between 2015 and 2021, around 100 petty cash checks were cashed totaling over $2.8 million, but of that amount only about $209,000 was ever documented as legitimate expenditures, leaving nearly $2.6 million unaccounted for, the affidavit said.
Between 2016 and 2021, over $1 million from 20 court-awarded civil forfeitures also went missing, the affidavit said.
The cash was never submitted to the property unit and was instead held in a safe in Velazquez’s administrative suite that only he and a couple others had access to, the affidavit said.
A former Hialeah Police chief was arrested on Monday on allegations of committing organized fraud and grand theft during his tenure, officials said. NBC6’s Steve Litz reports
During this same time, bank accounts controlled by Velazquez were used to deposit large amounts of cash in amounts less than $10,000 to avoid currency reporting requirements, the affidavit said.
During one period from Dec. 21, 2020 to Nov. 30, 2021, 9 petty cash checks totaling $352,000 were issued and cashed to fund police investigations, but $307,000 of that amount went unaccounted for.
About $526,000 in cash seized by the department that was court-ordered to be deposited to the Law Enforcement Trust Fund was not deposited, investigators found.
Another $235,000 ordered by the court to be retained by the department for investigative costs was also largely unaccounted for, the affidavit said.
Investigators also found that over $76,000 in cash seized by the department between Aug. 24, 2021 and Oct. 8, 2021, went missing from evidence packages.
In fact, over $1.1 million in cash is missing or unaccounted for in 2021 alone, the affidavit said.
During that time, over $293,000 was deposited into bank accounts controlled by Velazquez, and after the money was deposited, payments were made to credit card companies for a total of $265,000, the affidavit said.
About 10 days before Velazquez was relieved of duty as chief, the cash deposits stopped, the affidavit said.
Investigators said Velazquez made structured cash deposits utilizing four different accounts at four different banks, and sometimes as many as three banks would receive deposits in the same day.
The affidavit documents multiple instances where cash was seized during undercover drug busts but tens of thousands went missing from sealed evidence bags.
In all, between 2015 and 2021, 922 cash deposits totaling over $2.18 million were made into bank accounts owned and controlled by Velazquez while he was employed as chief, the affidavit said.
Of the 922 deposits, none were for over $10,000.
Velazquez’s salary was $210,000 at the time of his removal.
In 2015, Velazquez had incorporated an electrical business, but records showed the only reported wages earned by him came from the police department, the affidavit said.
But two business bank accounts showed about $257,000 in cash deposits between April 2016 and April 2022, despite there being no record of the business performing any permitted work in Florida, the affidavit said.
Business credit card purchases were made at a luxury watch retailer, Cartier, Louis Vuitton, Versace, Saks Fifth Avenue, Watches of Switzerland and Sephora, totaling over $77,000, the affidavit said.
Records showed a dozen credit cards were used by Velazquez in his name or the name of his business.
On April 20, 2021, Velazquez bought 2 Rolex watches, one for $6,304 in cash and the other for $68,632, splitting the payment between $30,000 on one credit card and $38,632 on another, the affidavit said.
The affidavit said investigators found Velazquez had also leased a 2021 Mercedes.
Velazquez was booked into jail but appeared before a judge on Tuesday, where he was granted a $30,000 bond.