MIAMI -- Who'd have guessed a lawsuit-laden sugar company run by a former cocaine trafficker wasn't a great partner for Miami-Dade and Florida officials?
Hialeah's Banah International Group filed for Chapter 11 bankruptcy Friday, a year after it was approved for $430,000 in tax incentives, reports the New York Times -- and a year after none of the agencies awarding such incentives apparently noticed a convicted drug dealer was running the company, or that it was facing four lawsuits for nonpayment and had been slapped with an IRS lien.
Instead, when Banah chairman Alexander I. Perez promised to bring almost 300 jobs to a new 300,000-square foot headquarters in Hialeah, he got help securing both local and state incentives from the county, its Beacon Council economic development group, and the state's Enterprise Florida.
The deal was heralded: a street in Hialeah was renamed Banah Sweet Way with Miami-Dade Mayor Carlos Gimenez, Commissioner Rebeca Sosa, and Hialeah Mayor Carlos Hernandez present. Then-U.S. Rep. David Rivera even gave Perez a congressional certificate for "outstanding and invaluable service to the community," reports Miami New Times, the duo posing in Washington, D.C. with Congresswoman Illeana Ros-Lehitinen and Congressman Mario Diaz-Balart.
But on Friday, Banah reported in Chapter 11 filings that it owes between $1,000,000 and $10,000,000 to 232 people and companies, according to the Miami Herald, and has just 15 employees. A promised job fair was never held.
Though officials told the Times that Banah hadn't yet received any of the tax breaks, the misstep is the latest vetting embarrassment for Enterprise Florida, the public-private economic development arm of the state that Governor Rick Scott expects to help him deliver on his campaign promises of job creation. Scott has asked for roughly $300 million in incentives, an increase from the previous budget of $110 million, just as the group faced withering questions from lawmakers about whether or not it can justify its own existence. A report this month by Integrity Florida revealed that Enterprise Florida has doled out roughly $1.7 billion since its creation in 1995, but has delivered just 103,544 jobs -- only half of its target, and eight years late.
After the well-publicized bankruptcy of Digital Domain, a Port St. Lucie animation company that received a whopping $20 million in incentives from the state, Enterprise Florida promised a better vetting process. But when Perez failed to disclose his four-year stint in federal prison or the ensuing probation that ended in 2009, no one at the county or state level apparently checked into Perez or his company enough to notice.
The Miami New Times not only turned up the trafficking case in October with a "simple search of court records" but also found that Perez and his company were facing four lawsuits over allegedly bad business practices:
First, the firm's former Doral landlord claimed Perez bailed on his lease before moving to Hialeah. In a lawsuit filed May 29, CV Miami says Banah owed $139,000. (Both companies recently settled out of court.)
Three other lawsuits are pending:
• Former CEO Sergio Gonzalez accused Perez of stiffing him on his $200,000 salary in a lawsuit filed April 5.
• All-American Containers, a Miami company that supplied Banah, sued Perez and his firm June 6 for $183,478 in unpaid merchandise.
• In July, New York-based Sterling National Bank sued Perez and Banah for payroll capital worth $327,623 that hasn't been paid back.
New Times reports today that five more lawsuits were filed last month, including an eviction complaint from Perez's current landlord.
While Banah hadn't yet received its state tax breaks, the Florida Current reports Enterprise Florida is meanwhile trying to recoup money from several of the 18 companies that have failed to meet job or wage goals after receiving $21.3 million in up-front incentives since 1996.
The Banah case indicates the process is still flawed, critics say.
“Things haven’t changed,” Integrity Florida's executive director Daniel B. Krassner told the New York Times. "They are not vetting these companies well enough to ensure that tax resources are protected."