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A.M. Costa Rica third newspage
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San José, Costa Rica, Friday, Feb. 2, 2007, Vol. 7, No. 24

Oswaldo Villalobos trial to open amid many questions

By the A.M. Costa Rica staff

Some 117 witnesses have been called to appear at the fraud and money laundering trial of Oswaldo Villalobos that starts Monday.

A spokesperson for the Poder Judicial said that the Ministerio Público, the nation's prosecutorial agency, plans to put on 57 witnesses and that the Villalobos defense lawyers have summoned 60.

The trial is of high interest to the expats and others who put their money with Luis Enrique Villalobos Camacho. The prosecution is expected to contend that Oswaldo Villalobos Camacho was operating a high-interest business together with his brother.

The trial is expected to begin at 8 a.m. in the auditorium of the Judicial Investigation Organization building. That is the middle of the three large office structures in the judicial complex. The auditorium was chosen because officials expect a crowd at least for the first few sessions.

The case is in the hands of the narcotrafficking prosecutor.

Enrique Villalobos is not on trial because he still is a fugitive. He closed up his Mall San Pedro business Oct. 14, 2002. Oswaldo Villalobos closed his adjacent Ofinter S.A. money exchange business and several branches at the same time.

The locations had been raided July 4, 2002, by Costa Rican investigators who were attempting to find evidence relating to a Canadian investigation.

Subsequently, officials revealed that the Villalobos operation had long been under scrutiny. Later charges of illegal banking, fraud and money laundering were levied.

Enrique Villalobos used to pay his creditors in cash and the rate was between 2.8 and 3 percent per month. He had an estimated $1 billion on the books when he closed his office.

The number of creditor accounts of people who lost their money was about 6,200. However, only about 600 persons filed a complaint parallel with the government's case. Since then those who filed have been the object of an campaign of browbeating and ridicule designed to cause them to withdraw. Many have, and little more than 100 individuals remain.

This is a curious case because some creditors ended up blaming the government and expect Enrique Villalobos to return and pay them. Some even expect compound interest.

A few of the creditors who supported the fugitive Villalobos appeared to be so unstable that they attracted the attention of those who provide security for the presidency. Then-President Abel Pacheco had called Villalobos creditors fools, and some creditors responded with veiled threats and some even marched in protest. Some thought that Pacheco was behind the July 4 raid.

It took investigators about six months to conclude that although vocal, the Villalobos creditors were not dangerous.

The trial is expected to answer some major questions about the Villalobos operation:

1. What exactly were the Villalobos Brothers doing?

Enrique Villalobos usually did not talk about how he earned his money. Once he said he bought low and sold high. He didn't say what he bought. Some creditors claimed he was in the factoring business. But there was little economic impact in the business community after Oct. 14, 2002, such as would be expected if a major player shut down.

One possibility is that the Villalobos were involved in the black peso exchange, converting U.S. dollars to Colombian pesos and back again.

2. What impact did Sept. 11, 2001, and tighter money transfer laws have on the Villalobos operation?

Although the July 4 raid and subsequent freezing of bank accounts may have hurt the Villalobos business, some suggest the firm was doomed because of new restrictions

being imposed to fight money laundering. Villalobos himself promised a more sophisticated operation and asked creditors to open bank accounts to receive monthly transfers shortly before he skipped.

This is an important question for those who expected Enrique Villalobos to return and resume operations, perhaps in an adjacent country.

3. Was Enrique Villalobos in charge or simply an employee?

Some creditors have wondered if the grandfatherly Villalobos was smart enough to run a billion dollar enterprise and suggested that there might be other groups — ranging from Costa Rican politicians to the East European mafia — in control of the operation.

4. How come the United States has not taken any action?

Enrique Villalobos had ties to Lt. Col. Oliver North and the southern Contras during the Nicaraguan civil war. Although many of his creditors are U.S. citizens and although he used U.S. bank accounts, the U.S. Department of Justice has failed to show much interest even though the U.S. Attorney's Office in Miami did extensive legwork for prosecutors here.

5. What ever happened to Freddy?

The third Villalobos brother managed the U.S. part of the business from his home in Florida. Where is he now?

6. Was the Villalobos operation really flypaper set up by the U.S. government to catch crooked politicians and scamsters?

Large sums of cash came into the Villalobos' hands from characters who appeared to be in flight from the United States. Was the operation really set up to trap these criminals? At least a handful of Villalobos creditors will not be at the trial of Oswaldo because they are doing time in the United States, including one crooked Illinois ex-politico.

7. How come the wife of Enrique Villalobos and employees of the money borrowing operation were allowed to walk?

A powerful piece of evidence in the Oswaldo Villalobos trial will be documents that show he was empowered to authorize deposits from individuals who did not come to the the borrowing operation with a usually mandatory recommendation from a current customer. The same documents name the wife of Villalobos, but she seldom is mentioned as a suspect.

8. Just where did the money go?

Villalobos true believers think that the fugitive financier is still making money hand over fist and that he will return their deposits to them with interest. Others say the borrowing operation was partly a ponzi scheme that paid interest from new deposits. Accounting records produced at the Oswaldo Villalobos trial should clarify this point.

9. Has either brother attempted to help creditors who fell ill or otherwise suffered greatly due to the collapse of the business?

There has been no public acknowledgment of any compassionate effort by the Villalobos Brothers, and excuses that they can't move money around fall flat. Some creditors have killed themselves. Others have lost homes and families.

10. Was there a link between the Villalobos operation and similar high-interest businesses?

Luis Milanes closed his Savings Unlimited and fled not long after the Villalobos operation folded. There also were a half dozen or more similar investment opportunities that went broke.

There is a $15 admission to benefit students and other Ticos

My comment about the cost of entry to Zoo Ave brought a response from Henry Kantrowitz, who gave some very convincing reasons why tourists pay $15 to see the zoo, which is filled with birds and animals and colorful cautionary signs about preserving our planet. He said that besides funding plenty of mouths to feed, ongoing research and the rescue and rehabilitation of wounded, abandoned or once caged birds, the price for tourists is contributing to the zoo being able to charge Costa Rican students and poorer Costa Ricans lower prices.

Mr. Kantrowitz speaks with authority since he was once curator of Zoo Ave and co-founder of the Birding Club of Costa Rica. He had me convinced and thinking it might be a good idea for Zoo Ave to post information about what they do so tourists can see it.

Many people who are planning to visit write to me asking how they can help schools, orphans, the environment, etc. while visiting. I am sure they would happily support these efforts.

I also heard from Phil who gave me the definition of “whitelist” from Wikipedia. It is a legitimate Internet word. He also suggested that we are becoming far too politically correct. I am inclined to agree with him, too. Thin skins lead to unnecessary conflicts. Try writing an opinionated column. It helps to toughen you up.

And then, on a lighter note, I got a note from Dick Burgoon about his mother, Irene Mensalvas. Irene is now 103 and has been crusading for peace for 50 years. And she is still at it. (I prefer “crusading” to “fighting” or “campaigning,” although all words unfortunately have an underlying military implication.)

Irene was a frequent visitor to Costa Rica and was last here in 1999 at which time I couldn’t remember her but she remembered me! She was a pretty sharp cookie then, and I hear she still is. Her picture in the Jan. 3 issue of the Baltimore Sun shows that, my dear, she still looks mahvalous.

Living in Costa Rica

. . .Where the living is good

By Jo Stuart
jostuart@amcostarica.com

Sunday I took myself to the movies, intending to see “Little Miss Sunshine." I wanted a feel-good film. I usually prefer to go to the movies alone because if I have a companion, I am too tempted to talk and risk getting pelted with popcorn.

Well, the paper was wrong, or I misread it, and Little Miss Sunshine was not showing at 2:30 p.m. so I settled for “Babel,” so as not to waste a trip or have to wait until 4:00 p.m. “Babel” is definitely not a feel good movie. I spent the most uncomfortable two and one half-hours that I can remember.

It was not just that as usual, the theater was cold, but the movie was distressing and upsetting, and relentlessly so throughout. But I stayed, partly because it had, after all, won some Oscars, and partly because I hoped that the ending would be uplifting. My problem was that I found it difficult to sympathize with any of the characters because they made such bad choices (not that I have always made good ones), except the two small children, who seemed to have no choice.

The movie did powerfully show the awful consequences of the lack of ability to communicate, the foolishness of youth and the dangerous and fatal domino effect of one firearm. All of these are most manifest in the Japanese deaf mute teenage girl who wants so desperately to be loved, or at least wanted. All are powerful messages that left me for no logical reason, thankful that I am living in Costa Rica.

But I really did want to see “Little Miss Sunshine.” I love Alan Arkin.


	Real Cuban cigars for sale. Churchill Cohibas and Churchill Romeo & Julietas. Bought last month. Still fresh, authentication stickers in place. Limited quantities. In San José. Best offer. cigarsincostarica@hotmail.com

You need to see Costa Rican tourism information HERE!

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