MIAMI (CBSMiami) – A key witness has testified in the tax evasion trial of former Hialeah Mayor Julio Robaina.

Convicted Ponzi scam artist Luis Felipe Perez testified Tuesday that he cooked up his first deal with Robaina in 2006 on a Caribbean cruise, according to CBS4 news partner The Miami Herald.

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According to Perez’s testimony, Robaina gave him high interest loans totaling $750,000 which were to be paid back half in cash, half in checks. Robaina and Perez allegedly shared the secret cash payments which Robaina is accused of not reporting on his income tax returns. Perez needed the money to keep his Ponzi scheme afloat.

The loans, some of which were made in the form of mortgages on Perez properties, stipulated on paper an interest rate of 18 percent. But Perez said said that the actual interest rate was 36 percent – a usury rate that would be illegal.

Perez also testified that Robaina wanted him to stop writing the checks payable to him, and instead make them out to two lending companies set up by the mayor’s wife. One was called RVR Holdings and the other MR Holdings.

On cross-examination Robaina’s lawyer, David Garvin, ripped into Perez who he portrayed as a liar who swindled about $40 million from investors, including the Robainas and current Hialeah Mayor Carlos Hernandez, according to The Miami Herald.

Robaina, 49, and his wife, Raiza, 40, were indicted last year by a federal grand jury on charges of conspiring to evade paying taxes between 2005 and 2010. The Robainas are accused of overstating losses on their businesses and understating gains in their personal income, failing to report about $2 million.

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“We believe in the justice system, we believe in the process and we know that at the end our name will be vindicated” said Robaina as he walked into the courthouse on Wednesday.

The charges are the result of an investigation, first reported by CBS4 News in 2011, stemming from allegations made against Robaina by Perez, who plead guilty in 2010 of operating a $45 million Ponzi scheme.

Click Here to read the indictment filed against the Robainas.

Perez, known by the nickname Felipito, has been cooperating with federal prosecutors in an attempt to reduce his ten-year prison term.

The couple is being tried together.

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