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These stories were published Monday, Jan. 20, 2003, in Vol. 3, No. 13
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A.M. Costa Rica/Saray Ramírez Vindas
Some U.S. investors are facing a grim choice
By the A.M. Costa Rica staff

U.S. investors in two failed high-interest operations here who haven’t kept up on their income taxes have to make a choice in the next few months, and neither choice is appealing.

Each may choose to seek amnesty and make extensive payments to the U.S. Internal Revenue Service. Or each may choose to remain silent and hope the IRS never finds about their evasion of taxes.


More letters, BELOW!


If they choose the first option, some investors may find that they will have to pay taxes, penalties and interest up to twice whatever they had invested in the Villalobos operation or Savings Unlimited.

If they choose the second option, they may eventually face prison.

Meanwhile, those hoping to deduct the money they lost will run into a number of tax-law details that may limit any deductions to a mere $3,000 a year.

In all, each investor’s situation is highly individual and depends on many factors that vary from person to person. For example, some may have been paying taxes every year on their interest income.

The above is the general scenario outlined by income tax experts contacted by A.M. Costa Rica over the last several days. And the experts give opinions that are as varied as the choices investors face.

David Housman, an accountant in Cariari, said the burden of proof will be on investors to show that they lost money and to prove that by using some type of paperwork. He said that if someone is going to come forward to accept an amnesty offer from the Internal Revenue Service, they would have to pay a 20 percent fraud penalty instead of the 75 percent if the tax agents catch up with them in the future.

The Internal Revenue Service, in one of their seasonal press releases, announced an amnesty for offshore investors last week.

One problem for investors is if they choose to accept the amnesty, they must come clean about the entire operation, including giving 

the tax agents the names of people who ecouraged them to make the investments.

The interest generated by Savings Unlimited and from Luis Enrique Villalobos Camacho is not subject to the U.S. exemption of about $76,000 for annual income earned overseas because it is interest.

However, Housman noted that an investor can deduct losses in the high-interest investment operations to the extent that they have income from similar sources, such as bank interest and real estate sales. These are called capital gains. 

Housman said that the situation with Villalobos would allow his clients to deduct the loss in the 2002 tax year. Villalobos has closed his business and is a fugitive, he noted. However, another accountant said that the ambiguous status of Villalobos might require people to wait until next year to make deductions. Many investors expect Villalobos to return and resume paying 2.8 to 3 percent per month interest.

Most assume that Louis Milanes, operator of Savings Unlimited, simply fled. Both men are being sought by Interpol, the international police agency.

For investors who have no other capital gains, any deduction from the Villalobos or Savings Unlimited failures is limited to $3,000 a year as a deduction against ordinary income.

"This is a very lousy situation, and, at best, no win. The question is how do you avoid your losses," Housman said. There are very few scenarios that would compel most out-of-luck investors to ever come clean with the I.R.S. he noted.

The I.R.S. does not have enough manpower to efficiently find tax-evaders and most slip under the radar, the accountant said. He noted that 20,000 agents have to handle about 120 million taxpayers. Other experts agreed.

However, Housman estimated that there were maybe 20 to 50 investors among the ranks of Villalobos and Savings Unlimited clients who may find it beneficial to claim losses on their investments.

These people may be asked to alert the I.R.S. as to who solicited them to join the circle of investors, which could tip the I.R.S. to information they might not have on a list of Villalobos investors the agency may have.

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A.M. Costa Rica photo
Costa Ricans gathered side-by-side with foreigners in the Plaza de la Cultura Saturday for a peace protest against the much touted war on Iraq. Around 300 protesters formed a vigil-like circle, in which candles were scattered, and symbolic drawings and messages were scribed on the ground. The scene was colorful, encompassing many facets of life that could be affected by war, both human and non-human. 
New entry-exit system weeds out foreign criminals
Special to A.M. Costa Rica

WASHINGTON, D.C. — Convicted drug offenders, traffickers and burglars are among the 330 aliens who have been stopped as they attempted to enter the United States since the implementation of the National Security Entry-Exit Registration System Sept. 11, 2002, according to Kris Kobach, counsel to Attorney General John Ashcroft. 

Kobach discussed the four-month old program at a press briefing Friday.

The suspicious aliens stopped thus far include "wanted criminals, aliens who've committed serious felonies in the past that render them inadmissible now to come into the United States, aliens with fraudulent documents, [and] aliens who've previously violated immigration law," said Kobach.

In some cases, the Department of Justice official said these would-be visitors to the United States have been refused entry to the country, and in other cases, they have been turned over to appropriate law enforcement authorities.

"[The system] has led to the apprehension of more than one suspected terrorist so far," Kobach said. 

For national security reasons, Kobach said he could not reveal further details.

The first phase of the system was implemented in September as the Department of Justice and the U.S. Immigration and Naturalization Service work to carry out a congressional mandate to establish a comprehensive entry-exit system by 2005.

"It's a new reality we face," after the September 2001 terrorist attacks, Kobach said. Prior to their strikes against American targets, the attackers had entered the country legally, investigations revealed, but then violated the terms of their visas.

The immigration service had no knowledge of the hijackers’ movements before the attacks, and no way of knowing. Recognition of that "incredible lack of information," Kobach said, prompted 

immediate action to establish a system which would provide authorities with information on the whereabouts and activities of foreign visitors.

Kobach says the system has several components. Temporary visitors entering the country are checked at ports of entry. Nonimmigrant visitors staying more than 30 days are required to check in with the immigration service and report where they are and what they're doing. Visitors are also required to notify the INS upon their departure from the United States.

In these last few months, approximately 54,000 alien visitors from 148 different nations have been checked at ports of entry, approximately one half of one percent of all visitors who have entered the country since that time, Kobach said. Entering visitors are selected for this special registration by immigration officials based on various criteria developed through intelligence information.

As an example of those criteria, Kobach said that a visitor's pattern of travel through other countries or regions might raise an immigration official's suspicions, or a visitor might be carrying a new passport from a country where a large batch of blank passports had been stolen.

Another component of the system requires selected nonimmigrant visitors from 25 nations to check in with their local immigration office to report their address and activity. They are also fingerprinted and photographed.

Through this domestic registration process, "We have thus far apprehended 15 felons who are also in the country illegally," Kobach said. Among these are aliens who have been convicted of assault with a deadly weapon, child molestation, theft, and narcotics possession.

Nonimmigrant visitors from predominantly Arab and Muslim countries are subject to the system’s domestic registration, a fact that has led to allegations the program is racially or ethnically biased. Rather, Kobach said, visitors from these countries are subject to the program because al Qaida has been known to operate in their homelands.


 
 
Financial leader voices 
support for Argentina

Special to A.M. Costa Rica

WASHINGTON, D.C. — Horst Köhler, managing director of the International Monetary Fund, announced Friday that he will recommend to the fund’s Executive Board approval of transitional financial support for Argentina.

In a release issued that day, Köhler noted that Argentina's economic situation "has somewhat stabilized, though it remains fragile. He added that the fund’s transitional program will "provide a framework for the multilateral development banks to support social programs in Argentina," which are needed to protect "vulnerable groups from the adverse effects" of the Argentine economic crisis.

"I have decided to recommend the approval of this arrangement as a demonstration of a good-faith effort of the international community in favor of the people of Argentina," he said. "I hope that our contribution will catalyze a cohesive effort on the part of the Argentine authorities, the provinces, legislators and civil society to fully implement this transitional program."

U.S. official confident of
Venezuelan peace

Special to A.M. Costa Rica

WASHINGTON, D.C. — The United States is confident a constitutional solution can be found to the current political impasse between the government of Venezuelan President Hugo Chavez and the political opposition, according to Thomas Shannon, deputy assistant secretary of state.

In remarks at George Washington University Friday, Shannon said that Venezuela is of great importance to the United States. He indicated that beyond the vital Venezuelan-U.S. energy relationship, the two nations have enjoyed a long-term political relationship based on Venezuela's status as one of the oldest democracies in South America.

"One would be hard-pressed to find in the region a country and people that are more committed to the democratic process," Shannon said. He cited the failure of an April 11, 2002, coup that briefly removed Chavez from office as evidence of the nation's commitment to democracy and constitutionality. 

"If we learn any lesson from the tragic events of April 11, it is that an unconstitutional solution to what Venezuela faces is not viable. It is not viable inside Venezuela. It is not viable outside Venezuela," he said.

Shannon added that the United States, working within the Organization of American States, has committed itself to helping find a solution to the conflict in Venezuela that is "peaceful, democratic, constitutional and electoral."

Venezuelan opposition leaders have argued that the Chavez government, although democratically elected, is governing undemocratically. The opposition also claims that government incompetence is undermining the nation's economy. 

The Chavez administration, in turn, has condemned opposition leaders as economic elites unwilling to accept government initiatives that would alter their traditional privileges. Chavez has rejected the opposition's efforts to hold a Feb. 2 referendum on his government's constitutionality, and contends that the Venezuelan constitution would prohibit a binding recall referendum until August 2003, at which point he will have served half of his current term.

"We are confident the situation can be resolved if the right resources are brought to bear," Shannon said. He suggested that the establishment of a "Group of Friends" that will include Brazil, Chile, Mexico, Portugal, Spain and the United States in support of Venezuela and the work of the Organization of American States’ Secretary General in Venezuela is a "very important" step toward this end.

Venezuela is one of the world’s biggest exporters of oil. The United States buys much of its oil from the country.

Poll: Canadians cite neighbor threat to peace

By the A.M. Costa Rica wire services

OTTAWA, Canada — A major Canadian newspaper has published poll results indicating one third of Canadians see the United States, not Iraq or terrorist organizations, as the biggest threat to world peace.

The Globe and Mail published Saturday the results of a survey of 1,000 Canadians polled from Tuesday to Thursday. The results show more people named the United States as a threat to world peace than did those answering Iraq, North Korea, or the al-Qaida terrorist network.

The results also indicate Canadians support participating in an attack on Iraq only if the U.N. Security Council is behind it. Sixty-two percent said they would support such a move if the U.N. authorized it, but only 15 percent would do so if the United States acted alone.

Almost three quarters (72 percent) said they believe Iraq has not been truthful in listing its weapons of mass destruction for international authorities. 

Canadian Prime Minister Jean Chretien has often said the Iraq situation should be handled by the U.N. Security Council. 

Opponents label 
Cuban election a “farce”

By the A.M. Costa Rica wire services

HAVANA, Cuba — Cubans voted Sunday in a one-party general election that political dissidents branded a farce. 

The election is held every five years to select 609 deputies to the National Assembly, as well as representatives to provincial assemblies. President Fidel Castro voted in the city of Santiago. 

He called the election a response to those who want to destroy Cuba, particularly the United States. 

Several leading dissident groups refused to vote. They urged voters to stay home or drop incorrectly marked ballots into the ballot boxes. 

Internationally known dissident Oswaldo Paya, a leading organizer of the Varela Project petition, said Cuba's elections are "neither constitutional nor legitimate." 

Calling for democratic reforms in Cuba, the Varela Project petition has been signed by 11-thousand people. President Castro, who is 76 years old, has led the Communist-run island nation since 1959. 

There is little doubt lawmakers will name him to another five-year term. 

Guatemala faces halt on U.S.-provided aid

By the A.M. Costa Rica wire services

GUATEMALA CITY, Guatemala — For failing to cooperate in the U.S.-led war on drugs, the government here is facing a possible suspension of U.S. aid. The country risks being included on a U.S. list of "decertified" nations that don’t cooperate in the drug war. 

The country has emerged as a significant drug-trafficking center and a serious concern for U.S. authorities, who say they are growing weary of the country's poor drug interdiction record and its corrupt anti-narcotics police.  It is also a major trans-shipment point for drugs bound for the United States from South America. 

This would be the first time the country has appeared on the list.

In 1998, the government seized 10 tons of cocaine. In 1999 it seized 11 tons. In the past three years, since President Alfonso Portillo assumed power, authorities have only seized an average of two tons per year. 

Gabriel Aguilera, vice minister for foreign relations, maintains that authorities are doing all they can to prevent and combat drug trafficking, but that the task is just too overwhelming. 

But according to an embassy official, who asked that his name be withheld, the problems here have more to do with corrupt anti-narcotics police than inefficient policing. Last October, Otto Reich, then undersecretary of state, said that drug traffickers had ties to, and influence with, the Portillo administration. 

When a nation is decertified the U.S. government suspends almost all its aid, and votes against that nation's request for loans from multinational lenders. A source within the Guatemalan government says it appears that Washington will decertify the country, but invoke a clause that allows it to waive the attendant sanctions. 

That option might do less economic damage in this country, where more than half the population lives on less than two dollars a day. But some say it would still sting the current administration as it heads into an election year.
 

Mexican soldiers pursue
police corruption

By the A.M. Costa Rica wire services

MEXICO CITY, Mexico — Soldiers have raided the offices of anti-drug agents in 11 states in an effort to combat police corruption. 

The raids come a week after the army arrested seven drug agents in Tijuana. The agents were allegedly holding two drug smugglers and offered to free them in exchange for drugs. 

Rafael Macedo, attorney general, says hundreds of federal agents are under investigation for corruption. 

Officials say the raids were conducted late Thursday. The offices that were taken over were in Sonora, Chihuahua, Tamaulipas, Nayarit, Chiapas, Guerrero, Baja California, Oaxaca, Tabasco, Yucatan and Jalisco.
 

Two face justice
in Karsh murder

By the A.M. Costa Rica staff

Two men charged with murder in the death of  a U.S. citizen will go on trial today in the Tribunal de Juicio de Goicoechea.

They are facing the charge in the brutal Aug. 21, 2001, murder of Roy William Karsh of Curridabat who was 61 at the time of his death.

Prosecutors said they will call 12 witnesses during the trial. The accused have the last name of Mora and Chacón. They have been in jail since their arrest a few days after the murder.

Karsh was found in his home by a neighbor. The murderers took his BMW automobile and some household appliances, money and some other items.

Bush suspends law on Cuban property use

By the A.M. Costa Rica wire services

WASHINGTON, D.C. — President George Bush has suspended for another six months a provision in a 1996 law that would allow legal action against foreign firms using confiscated U.S. properties in Cuba. 

Bush formally notified Congress Thursday of his decision to again suspend the Title III provision in the 1996 Helms-Burton act. 

The president said the waiver is necessary in the national interests of the United States and will expedite a transition to democracy in Cuba. President Bush last extended the waiver in July. 

Former President Bill Clinton signed the Helms-Burton Act into law in response to Cuba's downing of two small planes flown by anti-Castro Cuban exiles from Miami. The Title III Provision has been suspended every six months since the law took effect. 

The waivers allow the United States to avoid potential disputes with European Union nations whose firms have investments in communist-run Cuba.

Brazilian hopes diminish
for mudslide survivors

By the A.M. Costa Rica wire services

BRASILIA, Brazil — Officials say there is little hope of finding more survivors of mudslides that have killed at least 27 people and injured 70 others. 

Civil defense officials say torrential downpour triggered the mudslides that washed away shantytowns and buried more than 2,000 houses in southeastern parts of the country. 

The officials say most of the deaths came around the city of Belo Horizonte, the country’s fourth largest metropolitan area. 

Mudslides also buried highways and buildings in other areas and forced the evacuation of nearly 7,000 people. 

Another vice sweep
in downtown area

By the A.M. Costa Rica staff

The immigration police and other officials swept four central San José nightspots and several massage parlors Saturday night in search of illegal aliens.

Of the 26 persons investigated, 18 persons were detained, said officials of the Ministerio de Segurdad Pública. 

Officials characterize these raids as immigration sweeps, but the targets are almost exclusively nightspots and the detainees are predominately women, many of whom work as prostitutes.

Bush to meet Ecuador’s 
president next month

By the A.M. Costa Rica wire services

WASHINGTON, D.C. — The White House says President George Bush will meet with new Ecuadorian President Lucio Gutierrez here Feb. 11 to discuss anti-drug efforts and the war on terrorism. 

The White House issued the statement Friday, also saying it is committed to working with Ecuador to promote democracy and open markets, and to fight terrorism and illicit drugs. 

Gutierrez was inaugurated Wednesday in Quito.

Mayoral races have
little voter interest

By the A.M. Costa Rica staff

Only from 15 to 20 percent of the eligible voters went to the polls Sunday in the 10 cantons where elections were washed out by heavy storms last December. The elections Sunday also faced rainy weather.

There was no clear message in the results that saw the party of President Abel Pacheco, the Partido Unidad Social Cristiana, take half of the 10 mayoral races that were in dispute. Partido Liberación Nacional and Movimiento Renovación took the other seats. 
 

Bulls bash motorist

By the A.M. Costa Rica staff

The driver of a microbus suffered injuries about 4 a.m. Friday when his vehicle crashed into two bulls on the Tamarino road some five kms. (three miles) from Santa Cruz. He was identified as Miguel Angel  Rojas Alfaro. He went to the local hospital for treatment. One of the bulls died on the spot, and the second suffered injuries.
 
 
Professional Directory
A.M. Costa Rica's professional directory is where business people who wish to reach the English-speaking community may invite responses. If you are interested in being represented here, please contact the editor.


Psychiatrists

Dr. Luis Carlos Sancho Torres
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Lawyers

INVESTMENT RECOVERY CENTER

Learn how to best protect your interests in the Villalobos case. Explore your options at
http://www.irccr.net

Also, we invite you to join one of the most active discussion groups on the case.  Find out what people who care are saying. Join at irccr-subscribe@yahoogroups.com

2/16/02
tem


Law Offices of Lic. A.A. Hernandez Mussio

Attorney, Notary Public, Official Translator
English and Spanish

Specializing in Criminal 
and Corporate Law Practice

e-mail: legalxpt@racsa.co.cr

www.forovial.com                            Ave. 10, Calle 19, No. 1906
Cell: 365-3088                                            San Jose, Costa Rica
132-5/29/03


KEARNEY-LAWSON & Asoc.
      Lic. Gregory Kearney Lawson, attorney at law
Villalobos and Savings Unlimited Collections
*Investments  *Corporations 
*Real Estate Sales in Costa Rica *Tax Shelters 
*Immigration *Intellectual Property
    *Business procedures *Family and Labor Law
    *Locate People *Private Investigations
       Ph/Fax: 221-9462, 394-7007
gkearney_lawson@hotmail.com
attorneykearney@yahoo.com



Real estate agents


MARGARET SOHN  of Carico
15 years Costa Rican real estate experience
Member of the Costa Rican Real Estate Association, Lic. #1000 
Member, Costa Rican-American Chamber of Commerce
margaret@caricohenderson.com
www.caricohenderson.com
(506) 232-5016 home   (506) 233-8057 office  (506) 382-7399 cell 
2/9/03


Investments





Investigators

Empresa de Investigadores Internacionales S.A.
Telephone (506) 280-5217 
FAX (506) 280-5120
P.O. Box 297-2100 Costa Rica
Cédula Juridica #3-101-097681-32
investigators@prodigy.net
johnniechaverri@policeone.com
112-5/18/03


 
Device tested as a way to cut down diesel pollution 
By Mike Cooney
Special to A.M. Costa Rica

A device that could significantly alleviate Costa Rica’s diesel pollution problem is being tested by three San Jose area companies.

Technicians from the United States installed the DC-100 combustion catalyst systems on trucks from Transportes HyH of Uruca, Yumbo Cargas Internacionales S.A. Costa Rica in Colima de Tibás and buses from the Alfrado Bus Co. of San Jose during the first week of December.

Dan Shearer, chief operating officer of Transolutions International of Scottsdale, Ariz., which distributes the systems in Costa Rica, said the devices are expected to lower diesel pollution by 60 percent while reducing fuel costs by more than 15 percent.

Shearer said vehicles from the three companies would be monitored for six weeks to check for emissions and fuel consumption before the systems were made operational. They will then be monitored for six weeks while operating with the systems.

"By March 1 we’ll have the numbers and I’m confident they’ll show a significant improvement in fuel economy and pollution abatement," Shearer said. 

The DC-100, which is being marketed by Emissions Technology LLC of Phoenix, Ariz., differs from existing technology in that it attacks pollution at the source of the problem — incomplete combustion. 

By adding a catalyst to the combustion chamber, the DC-100 helps the fuel burn more completely in the combustion chamber rather than capturing the unburned hydrocarbons in the exhaust, the company brochures say. 

Tests conducted by Martin Marietta Materials in Indianapolis, Ind., and Ames, Iowa, on various types of heavy equipment showed the DC-100 reduced carbon monoxide by 60 percent and black

smoke and airborne soot by 80 percent. The tests 
showed the DC-100 was capable of a 21 percent reduction in fuel costs, the brochure said.

Shearer said officials from his company met with Manuel Antonio Bolaños Salas, Costa Rica’s vice minister for Energía, and officials from the transportation and combustibles ministries before installing the test systems.

"They were very supportive because they want to ease the country’s emissions problems," Shearer said.

The company said the device works this way:

The DC-100 is about the size of a small briefcase and is attached to the engine. It includes a pump, a dispenser, a circuit board and a catalyst formula in the form of an aerosol.

The pump creates a vacuum effect within the dispenser that causes the liquid formula to begin bubbling. When the bubbles rise to the top of the dispenser they burst, creating an aerosol mist. The aerosol mist is drawn into the combustion chambers using the vacuum effect from the pump as well as the engine’s own vacuum.

The aerosol mist enhances the combustion process, reducing the diesel particulate matter and toxic exhaust gases. The process also allows the engine to use less fuel to do the same amount of work.

The system can be used on any diesel engine, Shearer said. In addition to buses, trucks and transport equipment it can be installed on mining, construction or farming equipment, ships, tugboats, railway locomotives and industrial and generator applications.

Each unit costs $700 and pays for itself in fuel savings quickly, Shearer said. The formula lasts about 400 hours before replacement, he said. 

For further information you may contact: Daniel Shearer, Transolutions International 6991 E Camelback Suite D101 Scottsdale, Ariz., 85251. Transolutions@cox..net 


 
Our reward offer is still $500

Louis Milanes

Luis Enrique Villalobos Camacho
By the A.M. Costa Rica staff

This newspaper seeks the prompt return of two men who ran high-interest investment operations that have gone out of business.

Luis Enrique Villalobos Camacho, 62, was associated with Ofinter S.A., a money exchange house, and with his own private investment business that had about $1 billion in other people’s money on the books. 

Villalobos closed his business Oct. 14 and vanished.

Louis Milanes operated Savings Unlimited and several casinos in San José. He left the country with other members of his firm the weekend of Nov. 23. He may have as much as $260 million in his possession. Both operations catered to North Americans.

Villalobos had about 6,300 customers. Milanes had about 2,400.

Villalobos and Milanes are the subjects of international arrest warrants.  Associates of both men have been jailed.

A.M. Costa Rica has posted a $500 reward for information leading to the detention of either man with the hopes that others will make similar pledges. The newspaper believes that investors only will see some of their money when the two men are in custody.

Milanes has few supporters in San José. On the other hand, as the letters frequently on this page show, Villalobos still has supporters who believe that he will reappear and settle his debts. They believe he is in hiding because of a predatory Costa Rican government.

More letters on the Villalobos case
Pacheco is the ship’s captain

Dear A.M. Costa Rica:

Well if all of us investors are FOOLS, Mr. Pacheco [Jan. 17], you defintely are The Capitan of THE SHIP OF FOOLS . . . or should I say Admiral of the Fleet Enemas.

You actually signed a decree that released the Robles Brothers from any wrongdoing in Costa Ricas crime of the last century . . .BANKRUPTING BANCO ANGLO . . . and after you signed it, you said in an interview that you didn’t know what you were signing.

So, Mr. President, join our Ship Of Fools and for your foolishness you can take the Helm.

William Shaw


What would you do in his place?

Dear A.M. Costa Rica:

Kudos to Jack Evans for pointing out that the blame game has officially begun, even if his tone was a bit caustic. It is difficult not to choose sides in this matter. I'm not a pro-government person, but neither am I anti-Tico. I don't suffer fools gladly but I understand those who have made foolish decisions. 

In the midst of all of this there are no words that anyone can say to assuage those on both sides of this issue. If all the investors got back their money and EV was allowed to continue his business as usual, there would be those offended that law was not enforced. If EV was caught, jailed, and no one recovered their money beyond the piddling sums the CR government has frozen, then who suffers is clearly defined.

Neither scenario is completely satisfying. I am glad that I am not the Canadian who instigated all this, and particularly glad that I am not Villalobos who irked the Canadian in the first place.

Villalobos knows that the people who are protesting the CR government's actions have no chance in hell of fixing things. They have no political clout (indeed if they keep pushing they might find themselves deported back to the countries of their origin) and with Pacheco's popularity they can only have a negative impact on the Gringo community's relationship with the government. Only Villalobos can fix the situation, but with all his money and him safely outside the country he no longer has any reason to do so.

Odd that he coincidentally has reached retirement age when all this happened. Curious also that his wife is from eastern Europe and that he was accepting new investment money on a daily basis just before he disappeared.

I won't get into whether he is honorable or not; that is irrelevant according to Nietzsche. What would I do if I was EV? I'm not one to profess my sanctity; I'd get a life, literally: I would have plastic surgery, get a new identity and stay the hell away from Costa Rica. Again, I wouldn't choose to be in his shoes in the first place, money or not.

The investors need to ask themselves some questions about EV, particularly this one: what percentage of EV's life did he spend with me (the actual time spent, not the overall length of the relationship)? If the percentage is less than 1%, perhaps they never knew the real EV after all.

Carlos Ochoa 
Cartago


Look for the track record

Dear A.M. Costa Rica:

I read with interest the article giving President Pacheco's response to your staff's questions of him. Help me in understanding a few facts as I know them. 

SUGEF has said Mr. Villalobos has operated within regulation guides, the Canadian Govt. has distanced themselves from their investigation after finding nothing of their alleged charges. 

I suspect the attorney son of the Canadian Investor started the investigation after his run in with Mr. Villalobos. It's not difficult to get convicted drug users and dealers to point a finger at others in their bid to negotiate with attorneys and judges for reduced time. Since there are no findings . . .the question I would ask of President Pacheco is why not give the order to the judge to release the funds and business records and other equipment, drop the warrant (on what charges?) and let him start making restitution to investors. We have been patient because we know he will do the right thing. We are not naive, nor are we fools. 

There does seem to be a number of folks who are a bit upset with the interest they are getting from their choice of investment. While most people give their funds to agents of companies, not knowing the principals who are actually placing their "funds" into the market place. The "track record" is what intelligent people look at, and, yes, we know that risk is in the formula. 

The "track record" is what gives us the feeling of trust to make a decision to invest. . . this does not eliminate the "risk" anymore then it does at the bank or stock brokerage. Regarding the "tax" issue. . .all investors know that it is their responsibility as it would if they received their income on a 1099 commission-only type of employment.

This article was more fair then some of the past written. Thank You.

Mike Shawlee 
Washington State

 

Loss of money a blow to economy

Dear A.M. Costa Rica:

Re: Villalobos

The government permitted Ofinter and Saving Unlimited to operate for many years and then, without negotiations or any notice to investors, took action resulting in both organizations closing. With some foresight this could have been prevented. Yet they accept no responsibility for their actions. The result has been disastrous for the economy and is not by any means isolated to the investors.

The President appears more focused on mocking investors and the lost taxes rather than the resulting economic devastation.

Six to Seven million U.S. dollars have been taken out of the economy each month, creating immeasurable hardship for everyone; both Ticos and resident North Americans alike. Many people were dependant on that money entering circulation and it is now gone. As a result businesses will fail, construction projects will be abandoned and many people will lose their jobs. In addition, banks will at some point feel the effect as people are unable to make their loan payments. 

The America government has chosen to stay out of this affair. If there was any significant wrongdoing affecting any of their citizens, one can be certain they would not have done so. 

The sad part of this appears to be the limited vision of the government with respect to these operations. They appear to have focused only on limited wrongdoing which was determined fairly quickly. They focused their actions selectively because the regular banks were not targeted. Why?

The injection of $70,000,000 US a year should have been welcomed by the government. The longer this is drawn out, the deeper negative impact and the more prolonged the recovery.

I had presumed that the government of Costa Rica would be acting in the best interests of the people. I guess I may have been wrong.

Sharon Hamm

EDITOR’S NOTE: Several letter writers have said the Superintendencia General de Entidades Financieras did not find anything wrong with the Ofinter S.A. money changing operation. This is true. But the Superintendencia said he did not have the power to investigate the Villalobos operation that was being conducted in an adjacent office. That’s because Ofinter was licensed and Villalobos was not. The agency also said that he turned information on several suspicious transactions that went through Ofinter to the prosecutor’s office, the fiscal.
 

He’s in favor of negotiations

Dear A.M. Costa Rica:

I visited Costa Rica nearly 30 years ago and fell in love with the people and the country. One day I look forward to retiring there. However, the recent events and the action of the government of late have saddened me and made me reconsider.

From all I have read, I am unclear as to the objectives of the government action with respect to Ofinter.

Contrary to earlier statements, the Government now states that there was no illegal lending involved. Ofinter was within thir rights to lend money. No one to my knowledge was hurt by the lending operation, and it has only fed the economy and attracted much more investment than would otherwise be there.

With respect to money laundering, this is an action that cannot be condoned. However, since Banco National had the same client in at least one case, why were their funds not seized and their CEO arrested. One expects that in a democracy people are treated fair and equitably.

As far as the source of the money, there is no evidence that is not made legally or for that matter inside the country. In fact, is that most of it is held outside the country and likely that is where the profits are being made. It is likely as well, if it is disclosed and becomes known, it will cease to exist. Therefore leave it alone. The IRS has.

The idea of Victims Assistance Office attempting to determine where all of the 6000 plus investors got their money is incredibility unrealistic. First of all, very few people are actually co-operating. Secondly, there is little evidence we are aware of that leads us to believe this was a widespread money-laundering operation. Thirdly, investors are unwilling to provide information because there could be Costa Rican tax implications, and fourthly, it is a lot of trouble for investors to go through when only a very small portion of their funds are involved

The Costa Rican Government in seizing Ofinters funds and arresting Osvaldo Villalobos frightened both Luis Enrique Villalobos and Louis Milanes into disappearing, making criminals of them. Did anyone in the government think what might happen if they took that action. Did they think about the tremendous repercussions and hardship it would cause not only the individual investors but the entire economy. 

Suddenly five to six million U.S dollars have disappeared from the monthly economy. That is 60 to 70 million U.S. dollars a year. Most governments would welcome that much money. There was no need to have so many people hurt so badly. The government appears to believe all the hardship that has been created is not their fault. They were aware these operations existed for many years and did nothing, thereby endorsing those lending institutions. And suddenly without any negotiations or forewarning they drop the heavy hammer.

Furthermore there are very few in the government who would not have taken the action that Enrique has to protect himself. In fact many would have acted less honourably. For the most part governments in a democracy are elected to represent the people of the country. Are the resident North Americans people of Costa Rica and should not their rights be represented and protected? 

The president himself has demonstrated a flagrant disregard for the people and the economy. Yes, North Americans have invested in Oftinter and Savings Unlimited but they also bought houses and cars, started businesses, invested in the economy, invited friends and relatives down, heavily promoting tourism, etc. A huge amount of money has been invested in CR. As a result over the years they have contributed significantly to the economy. Costa Rica has prospered and as a result has become the envy of all Central America. But what lies ahead? This will surely not help the economy. Whose interests are the government representing? Has any bank done as much?

The IRS has acted swiftly to declare their position, which allows people to openly pursue their interests without tax repercussions. If the money laundering was a problem, the IRS would surely be in the thick of things.

Why then cannot the Costa Rican government act swiftly to resolve this mess, bring it to an end and let the people and economy prosper once again. It is in every ones interest to have this cleared up quickly, remove the uncertainty so that life can go on. 

Finally and respectfully I suggest that the Government open negotiations with lawyers representing Luis Enrique Villalobos to get things back on track. It should be viewed from the general perspective of helping the people and the economy.

Randy Zaborniak


Loaning money is not horrible

Dear A.M. Costa Rica:

I read with great interest your letter about Ellen Beattie. It made me wonder why you are so interested in something that you have no interest in. 

First of all don't worry about the money that some of us have lent to Villalobos. It is my money to do with as I see fit. I made most of money in a small business, investing in real estate and loaning money to people who paid me interest on the money I loaned them. And of course, I paid taxes on the money I earned from these transactions. 

There is nothing I know of that is dishonest or illegal about loaning money. If there is something dishonest or illegal about loaning money, maybe you should notify the banks, saving and loan associations and insurance companies that they are doing something illegal. 

Of course don't forget to tell the IRS about this horrible practice of loaning money. I don't know the tax code number you wanted, about how to write off capital losses from lending money, but I sure your tax accountant or CPA can give you that information along with others that are used on a daily bases to write off losses. 

Just read any business section of any newspaper and see how many corporations take charge-offs at tax time. Last but not least, if you don't comment on my investments I won't comment on yours. 

David Castellino 
California
He’s a very wary investor

Dear A.M. Costa Rica: 

In the article, "Abel Pacheco denies...." [Jan. 17], Our president argues that the government is not responsible for the demise of the Villalobos investment operation. The suggestion made, is that there is something wrong with the people who trusted a person they do not know. 

I am a very wary investor, having lost all my capital and half the value of my home in the stock market crash of ‘87, so I checked out Mr. Villalobos over a long period of time by getting to know him personally. I was never disappointed by him, and my trust of him has only grown. I know of many others who invested after carefully considering the character of Mr. Villalobos.

That Mr. Villalobos, and this situation, should be compared to a robber on the street is a ridiculous argument. A robber, usually using the element of surprise, attacks without warning, no agreement is made and there is no friendship or trust. An investor considers the risk based on facts available and takes time to consider putting his trust in a person. 

The parties with any control who are involved in this situation are the Costa Rican government and Mr. Villalobos. He was forced to close his offices to protect his investors´ money. He continued to pay interest until he was forced out of business by the heavy-handed, unjust system here that froze his accounts, and now has posted his name internationally as a fraud. 

The Superintendencia has admitted that no Costa Rican law has been violated. They confess that no fault can be found on Mr. Villalobos´ part. Equally well with his brother who has been jailed. I do not think I am a fool for investing with Mr. Villalobos, but I hope I will not be proven a fool, for not thinking ahead that our government may, like a street robber, affect my investment, afterwards saying, "It is nothing, we are not responsible for this." 

John Dunstan

 
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