By Michael E. Miller
By Allie Conti
By Keegan Hamilton and Francisco Alvarado
By Jake Rossen
By Allie Conti
By Kyle Swenson
By Chris Joseph
By Michael E. Miller
On the fifth floor of a squat, cream-color building just north of downtown Miami, an 8-by-11-inch color printout that reads "Fanatic" is taped to a maroon door. Inside the office Jorge Caligaris, editor of Soccer Fanatic, predicts a rosy future for his Spanish-language publication, which is printed in Miramar and distributed in Palm Beach, Broward, and Miami-Dade counties. "Our market," he says, leaning forward, "counts 21 million soccer fans in the United States alone. Sales of soccer merchandise nationwide have grown over 10 percent each year for the last couple of years, and unlike in Latin America, there is no forum of discussion about soccer here. I'm proud to say that we are the only soccer newspaper in Florida."
For several minutes Caligaris continues his upbeat discourse on the publication, which includes full-page color ads from big companies; dozens of stories from far-flung places including Japan, Poland, Bahrain, and Peru; and first-class photos. But the tenor changes when New Times questions a key personnel move. The name Julio Gonzalez appeared in the masthead as "director" in the first few issues this spring, then disappeared. "Where is Mr. Gonzalez?" a reporter asks. "What happened to him?"
Caligaris looks confused. "I don't know why you are asking about him," he says, leaning toward his questioner, who repeats the query. "There haven't been any changes," he responds. Then, growing more uncomfortable, he asks, "What does this have to do with Fanatic?" Finally Caligaris declines to answer any other question about Gonzalez.
No wonder. Julio Gonzalez, Fanatic's editors later admit, is Julio Gonzalez Ugarte, a central player in an international financial scandal that has journalists and prosecutors from Paraguay sniffing around the newspaper's offices. Last year, a source tells New Times, Gonzalez Ugarte pledged as much as $1 million in startup money to the publication. In May the Paraguayan Senate removed Gonzalez Ugarte from his job as director of the Paraguayan Central Bank for his alleged part in illegally moving $16 million to an American bank account. He is one of four top government officials from that country who have been forced from their jobs and criminally charged as a result of the brouhaha.
This scandal reaches all the way to the top: Several Paraguayan journalists predict the eventual ouster of the country's president, Luis Gonzalez Macchi, for his alleged role. You may have heard of this guy. He's married to a beauty queen and took office in 1999 after the resignation of president Raul Cubas, who allegedly helped assassinate his own vice president. Gonzalez Macchi's problems started when reporters learned his armored presidential BMW was stolen from Brazil. If the probe of the new scandal ensnares the Paraguayan leader, he'll join Argentina's Carlos Menem and Peru's Alberto Fujimori among the ranks of scandal-plagued South American leaders.
Paraguayan prosecutors, journalists, and others close to Soccer Fanatic confirm that the South Florida connection began in June 2000, when several entrepreneurs, including Caligaris, Agustin Matiauda, and an Argentine man living in Boca Raton began planning a soccer newspaper. They developed an ambitious blueprint and determined they would need tens of thousands of dollars to survive the first few months, when advertisers and readers would be sparse. On July 5 they employed Fort Lauderdale lawyer Laz Schneider and incorporated as Wise Publishing Company with an address on Las Olas Boulevard in Fort Lauderdale. Planning continued apace. In late December, just before Christmas, several of the newspaper's principals -- including Matiauda; his older brother, Carlos Alberto Matiauda; and Caligaris -- met at the Wyndham Miami Beach Hotel on Collins Avenue. A source tells New Times that the elder Matiauda brought a friend he had known since childhood: Gonzalez Ugarte. The lobby was crowded because of a convention, so the group adjourned to a nearby establishment. There, the source contends, Gonzalez Ugarte promised to invest. He couldn't say how much because he had to talk to his "people." Several days later, between Christmas and New Year's, Gonzalez Ugarte called Soccer Fanatic to confirm he would contribute $1 million, the source relates, and on January 3 the paper's staff moved to the fifth-floor office in Miami.
Five days after the new Soccer Fanatic offices were christened, the story that would rip apart the Paraguayan government broke in the Asunción newspaper ABC Color. Under the headline "Liquidators Illegally Remove Millions of Dollars from the Country," 28-year-old business reporter Luis Bareiro wrote that Carlos Pecci, a supervisor for Paraguay's Central Bank, had funneled $16 million from two failed financial institutions to a Citibank account in New York City. "There were rumors that money had been moved improperly," Bareiro tells New Times. "I made contact with lower-level officials at the bank who confirmed them."
Over the next few months, Bareiro and others in the Paraguayan press told an astonishingly complex tale involving corruption by Central Bank administrators with the collusion of South Florida businessmen and several members of President Gonzalez Macchi's family. While their reporting was sometimes subjective and included minor errors, it provides a compelling tale that packs a powerful punch.
According to a secret U.S. Treasury Department document obtained by Bareiro and shared with New Times,law enforcement got wind of problems in March 2000, when Citibank in New York filled out a report of suspicious activity. During the next few weeks, the bank detailed how three transfers totaling $16.7 million had been made from the two liquidated Paraguayan banks to the account of a Los Angeles lawyer named John Tulac, then to banks in California and New York. (Tulac did not return a call seeking comment.)
Paraguayan Central Bank leaders initially denied knowing anything about the $16.7 million, but this past February Gonzalez Ugarte and the bank's president, Washington Ashwell, acknowledged the money had been sent out of the country -- apparently in violation of Paraguayan laws -- with the aim of gaining a high yield. Throughout the spring ABC Color and other Paraguayan newspapers continued to publish daily stories on the misappropriation of the money. On April 30 Paraguayan authorities arrested bank supervisor Pecci.
Meanwhile in South Florida, Soccer Fanatic had published its first issue April 2 at a press owned by Gannett Inc. (where New Timesis printed). A front-page editorial in the premier 72-page broadsheet claims a circulation of 80,000 in seven Florida counties. New York, California, and Washington, D.C., as well as an English-language edition were all in its sights, according to the editorial. On page 2 Gonzalez (Ugarte) is listed as director -- just after the names of Caligaris and Agustin Matiauda.
But as things heated up in Paraguay, Gonzalez Ugarte apparently couldn't deliver the promised $1 million. On May 3 ABC Color reported that President Gonzalez Macchi had fired Central Bank president Ashwell and requested that the senate remove Gonzalez Ugarte from the bank's board.
On May 14 Bareiro wrote a story on Soccer Fanatic's ownership, distribution, and content in which he asserted that "Gonzalez [Ugarte] and other Paraguayan partners had acquired the newspaper in late 2000 or early 2001" and that the paper was paying $8000 per week for printing. Bareiro could not confirm Gonzalez Ugarte's ownership or presence at the office.
In the weeks that followed, however, Bareiro developed a stronger case that the president's family had some knowledge of the money's fate. On May 29 he alleged Paraguayan prosecutors had learned that Citibank transferred millions of dollars to three accounts at Ocean Bank. The "beneficiary" of the accounts, Bareiro wrote: the South Florida-based Paraguayan Humanitarian Foundation, which lists two acquaintances of Gonzalez Ugarte -- José Avila and Juan Rodriguez -- as directors.
Though the secret Treasury Department document confirms Avila's tie to a small portion of the money, Avila contends he never received a nickel. "The reporting from Paraguay is untrue," he says. "It's simply the wrong information." He declines to elaborate, adding that the foundation has "lawyers, trustees, accountants."
Bareiro's May 29 story also noted that the president's daughter, Judith Gonzalez Macchi, had traveled to Miami in the spring of 2000, around the time the money was transferred to Ocean Bank, and signed a business agreement with Avila. She allegedly wanted Avila to help collect money for Doña Lola de Miño, a foundation she had established.
On June 4 Bareiro described a boat trip the Paraguayan president, his wife, and their entourage took from a Coconut Grove marina. The trip, on a yacht called the Natasha II, cost $5000. (Bareiro describes seeing Avila's name on the yachting contract, but Avila denies footing the bill. "I never paid that," he says.)
Three days later came the coup de grâce: a report that the president's father, Saul, confirmed to prosecutors his family's involvement in the illegal transfer. The president's brother, Jose Ignacio, also allegedly knew of the funneling. Moreover, Gonzalez Ugarte had promised donations to Judith Gonzalez Macchi's foundation.
Bareiro won't disclose all his sources, but Paraguayan prosecutor Javier Contreras confirms most of the young reporter's work. He adds that "we are investigating the case and suspect Gonzalez Ugarte's involvement with Soccer Fanatic in Miami." Last week Contreras's office sent Gonzalez Ugarte to federal prison.
Where does that leave the newspaper? It's doing relatively well, claims Agustin Matiauda. Gonzalez Ugarte "didn't pledge any money," Matiauda comments. "He said he was going to show our project to others and see if they were interested." Matiauda says he and Caligaris found other sources of capital but declines to discuss details of the newspaper's finances.
But several facts published in Soccer Fanatic cast doubt on Matiauda's credibility. Although the initial issue reads "Our circulation begins with 80,000 copies in Florida," Matiauda acknowledges that number "was only a target." Though he declines to discuss present figures, sources told New Timesthat the number printed has recently dipped from 20,000 to 10,000.
And though the masthead in the June 18 Soccer Fanatic states that the paper is published twice weekly, Matiauda acknowledges that the truth is once per week. Finally the masthead claims the paper is distributed in Monroe County, Orlando, and Tampa. But Matiauda admits that's a mistake. Distributors take it only to Miami-Dade, Broward, and "a little bit of Palm Beach.... These are little things that are all part of publishing a newspaper," Matiauda contends. "They can be fixed." Staff intern Victor Thompson contributed to this report.