05/16/2013 06:27 pm ET Updated Jul 16, 2013

Julio Robaina, Former Hialeah Mayor, Indicted On Tax Evasion Charges In Miami (VIDEO)

MIAMI, May 16 (Reuters) - The former mayor of Hialeah, a scandal-plagued city on Miami's northwest outskirts, was indicted on tax evasion charges on Thursday, two years after losing a bid for Miami-Dade County's top political job.

Julio Robaina was indicted together with his wife in U.S. District Court for the Southern District of Florida in Miami on multiple counts of conspiring to defraud the federal government though the filing of false tax returns.

"It was the purpose of the conspiracy for Julio Robaina and Raiza Villacis Robaina to enrich themselves by concealing, disguising, and failing to report the true and correct amount of their income to the Internal Revenue Service," the indictment said.

The tax evasion charges stem from highly lucrative loans, totaling more than $1 million, that Robaina is alleged to have made in return for sky-high interest rate payments from borrowers in what The Miami Herald newspaper described as a "shadow-banking," or loan shark industry.

The indictment alleges that Robaina and his wife avoided paying their full share of taxes and instead used the money to purchase two Miami beach condominiums and a Ferrari sports car.

The Newark, New Jersey-born Robaina, a Republican, was first elected mayor of Hialeah in 2005 and elected to a second term in 2009. He stepped down in 2011 to launch a losing bid for mayor of Miami-Dade County, a year after the IRS had begun investigating his personal finances.

Lawyers for Robaina could not be reached for immediate comment. But he told the Miami Herald in 2011 that he had reported the interest income from loans on both his personal and corporate tax returns.

Robaina was expected to surrender to authorities on Friday, the Herald said.

Hialeah, a blue-collar and predominantly Cuban-American district, is better known for its ubiquitous warehouses than for its once regal Hialeah Park race track.

One of Florida's biggest cities, it has a long history of graft and corruption and former Mayor Henry Milander, who died in office in 1974 after 27 years in power, survived numerous scandals, including a grand larceny conviction.

More recently, in the 1980s and '90s, Cuban-born Raul Martinez, a longtime Hialeah mayor, won re-election despite a federal influence-peddling indictment and two hung juries. (Reporting by Tom Brown; Editing by Bob Burgdorfer)