SEC revisits Miami fraud charges

U.S. authorities have charged the city of Miami with violating a cease and desist order meant to stop the city from fraud involving city bonds. The Securities and Exchange Commission said the city's budget director was playing "shell games" with the city's finances -- which was, essentially, "similar misconduct," to fraud committed by the city that resulted in a cease and desist order issued in 2003. Court papers indicate Budget Director Michael Boudreaux "made material misrepresentations and omissions," in disclosing internal fund transfers in advance of three bond offerings, CNN reported Saturday. The bond issues totaled $155.3 million, CNN said. Boudreaux's attorney said the SEC was looking for a "scapegoat" for the city's failure to be forthright about its finances, which amounts to duping bond investors. Miami Mayor Tomas Regalado said the city was "paying for the sins of the past," but had corrected its accounting practices. "Now the city is very careful in segregating accounts," the mayor said. The Miami Herald said Saturday the SEC determined in 2001 Miami had moved funds from a capital budget fund to a general fund to make its finances appear balanced.