Ex–Hialeah Police Chief Arrested for Skimming at Least $600,000 in Cash From Drug Funds

The former police chief of Hialeah, Florida, was arrested Monday for allegedly defrauding the city after a state law enforcement investigation uncovered millions in missing cash from the department's narcotics unit.

Sergio Velazquez, the police chief of Hialeah from 2012 until 2021, is facing felony charges of grand theft, organized fraud, and structuring bank deposits to evade reporting requirements. Prosecutors allege he siphoned off at least $600,000 from narcotics funds and seized cash from 2020 to 2021, then attempted to launder the money through multiple bank accounts and a corporate entity he registered.

Although Velazquez is only charged for alleged conduct over a roughly one-year period, investigators say that they can't account for several million dollars more that disappeared since 2015.

"This case revealed that Velazquez violated the trust and integrity expected of him as police chief," Florida Department of Law Enforcement (FDLE) Special Agent in Charge John Vecchio said in a press conference Monday at the Miami-Dade State Attorney's Office.

The evidence laid out against Velazquez is a particularly brazen example of the perverse police incentives created by the drug war and civil asset forfeiture, a tool that allows police to seize cash and property suspected of being connected to criminal activity such as drug trafficking, even if the owner isn't charged with a crime.

In an arrest warrant and affidavit obtained by Miami public radio outlet WLRN, an FDLE agent said the FDLE was first alerted to the alleged theft by the Hialeah police chief who took over the department after Velazquez was dismissed in 2021.

When the new chief opened a safe in his office, he discovered evidence bags with cash related to recent drug seizure cases—but tens of thousands of dollars were missing.

An ensuing three-year FDLE investigation found that cash had continually disappeared from safes inside the police chief's administrative suite. That cash came from two sources: a city-funded "petty cash" account for long-term narcotics investigations, and money seized through civil asset forfeiture as a result of those narcotics investigations.

When FDLE investigators checked the Hialeah Police Department's requests for "petty cash" funds against the expenses filed by the narcotics unit over an 11-month period in 2020 and 2021, more than $300,000 was unaccounted for. 

Velazquez's arrest warrant says that from 2015 to 2021, his office requested funds for narcotics operations totaling $2.8 million. But investigators could only match roughly $200,000 to legitimate expenditures.

Additionally, $1 million was missing from court-awarded civil asset forfeitures.

Civil liberties groups have long argued that civil forfeiture creates perverse profit incentives for police, and over the years there have been plenty of examples of officers who abused the process to rake in money for their departments, or simply stole to line their own pockets.

In New York in 2023, an Albany County sheriff's deputy was charged with stealing more than $68,000 from the department's federal forfeiture funds account.

Over in Lancaster County, Pennsylvania, in 2020, $150,000 went "missing" from the county drug task force's asset forfeiture fund.

In 2021, federal prosecutors charged two former police officers in Rohnert Park, California, with extorting money and marijuana from motorists during traffic stops.

Numerous police departments and district attorney offices have gotten into trouble for using asset forfeiture revenues as slush funds for frivolous expenses and fancy swag.

The problem with having a big pile of illicit cash, though, as any successful drug trafficker could testify, is spending it without getting caught.

At the same time that money kept disappearing from the Hialeah Police Department's narcotics funds, FDLE investigators allege that Velazquez deposited $2,000,000 in cash into personal and business accounts, splitting the deposits among multiple accounts and avoiding sums that would trigger automatic reporting requirements.

According to the affidavit, Velazquez also registered a corporation and spent tens of thousands of dollars from his business accounts on luxury watches and high-end brands such as Cartier, Louis Vuitton, and Versace.

Once Velazquez left office, the arrest warrant notes, the bookkeeping problems at the Hialeah Police Department suddenly stopped.

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