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A.M. Costa Rica third newspage
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San José, Costa Rica, Tuesday, Feb. 13, 2007, Vol. 7, No. 31

Phone numbers to get an extra digit within a year, ICE says

By the A.M. Costa Rica staff

A year from now the telephone company will add an extra digit to every telephone number, thereby increasing the theoretical capacity to 20 million phone lines.

The telephone company, Instituto Costarricense de Electricidad, announced the plan Monday and said that by March 2008 every mobile phone will have a numeral 8 as a prefix and every land line will have a prefix of 2.

Right now phone numbers have seven digits and a theoretical capacity of 10 million lines. But that is not enough, said the telephone company. The company said

that mobile phones and the type of commercial setup where every extension is a separate number had stressed the system.

The new eight digit phone numbers will remain useful for 30 years, the company said. Costa Rica has 4.3 million persons.

The firm, known as ICE, instituted seven-digit numbers early in 1990, a press release said. The company was unable to say Monday exactly how many lines are in use.

Costa Rica has but one area code, 506. Other nations have handled the similar problem by adding more area codes.

Villalobos prosecution begins to present audit investigation

By Dennis Rogers
A.M. Costa Rica special correspondent

The judges’ bench got a new backdrop at the Oswaldo Villalobos trial, as the prosecution carted out 27 large boxes of documents that detail the operations of the high-interest investment business.

The investigators who put this collection of paper together were on hand to explain the workings of the alleged illegal financial maneuvers and the connections between the Ofinter S.A. exchange house run by Oswaldo Villalobos Camacho and the large-scale capture of funds that made up the rest of the operation nominally run by brother Luis Enrique Villalobos Camacho.

Prosecutors are trying to link Oswaldo Villalobos to both businesses.

Manuel Roldán, as supervisor of the investigation, laid out the preliminary work that led to the finer points discussed later. For him, a forensic auditor for the Judicial Investigating Organization's money laundering unit, he said the signs were clear enough to initiate a thorough investigation. In his presentation he also described how a ponzi scheme works, the first discussion of that subject in the trial so far. He noted that the ponzi strategy goes back to 1817 and “it’s not like we invented it.”

In a ponzi scheme early investors are paid interest from sums deposited by later participants.

Roldán said that the early investigation found many of the signs of a money laundering operation in the activities of the Villalobos brothers:

• Large numbers of transactions with no discernible commercial purpose;

• Multiple shell corporations with no commercial activity;

• Employees on the payroll but not present;

• Large numbers of bank accounts;

• Lots of large checks made out to “cash;”

• Informal accounting;

• Considerable cash on hand.

Lead investigating auditor Elizabeth Flores then had a long Powerpoint presentation that concentrated on the involvement of Oswaldo Villalobos in the operations in question, by showing that Ofinter shared quarters, employees, and bank accounts with the investment operation. The money-capture activities were well organized with detailed instructions for employees as to who to accept and how to handle specific situations, she said, adding:

Both businesses were connected by internal hallways at their Mall San Pedro site, though customers were only seen in a small room with a table and chairs. Employees could go back and forth, and of 18 on the payroll at the time of the raid in July 2002, only five were specifically dedicated to Ofinter. David Matthison was the local administrator of the investment operation, but involved with Ofinter as well. Matthison, Preston Powers, and Patrick Oehen signed confidentiality agreements as part of their employment agreement. Many of the other employees were relatives of the Villalobos.

Flores showed operational connections between the two businesses with case studies of movements of money collected from investors that was moved by Oswaldo to other accounts. For specific case studies, court employees opened various boxes so as to dig out a few files for the months and accounts in question to add them to the official record.

A study of January 2002 showed one account that Oswaldo opened in the name of Servicios de Suporte al Turismo S.A. (a favorite) with the local mutual fund Puesto de Bolsas Popular going from zero to more than $2 million a month later. She also said:

Another account at the Mercado de Valores mutual fund was also run by Oswaldo. In many cases, investors were told to write their checks directly to the fund itself. As Ofinter was buying most of the dollars from the

Deposits accepted by Villalobos
Year	gross deposits
1996	$21 million
1997	$31 million
1998	$41 million
1999	$52 million
2000	$78 million
2001	$98 million
2002	$83 million

Total	$404 million
Seven year take: $404 million By the A.M. Costa Rica staff Investigating auditor Elizabeth Flores concluded that the Villalobos borrowing operation took in $404 million from 1996 until the offices were raided July 4, 2002. The business showed a significant upward trend with increases every year. Income in 2001, the last full year of operation, was nearly five times the income in 1996, according to figures generated by the Judicial Investigating Organization. The increase presumably can be related to word of the Villalobos operation getting around, the increases in the North American real estate market and the decline of the dot.com stock boom. A lot of creditors rolled over their interest to continue to take advantage of the nearly 3 percent a month offered by Luis Enrique Villalobos. So the business could easily have had some $1 billion on its books when Villaloboso closed up the office Oct. 14, 2002 and became a fugitive.

investment operation, this caused a need to sell and avoid sending them to the Central Bank each night as required by regulation if the amount of the increase in dollar holdings exceeded 5 percent for the day.

Many sales were registered to Oswaldo but sent to accounts like this one, in the name of other entities, sometimes even Ofinter itself. Other sales on the books as to Oswaldo ended up as checks to other accounts. Some checks made out to Mercado de Valores were even cashed by employee Javier Calderón, though Flores said the mutual fund, which is a corporation, never gave any authorization to do so.

Flores finished discussions of links between Ofinter and Luis Enrique Villalobos by pointing to one of their own documents. The instructions shown to investors say “Our business is money exchange . . . . We have accepted investments to give us working capital since 1980.”

The separate charge of unauthorized financial intermediation was introduced by Roldán. To be considered a banking operation that is subject to regulation, financial activities must be repetitive, systematic, and prolonged. Flores stated that six Ampo folders documenting “deposits” with the same format were adequate evidence of repetition. In general, the use of forms and recruiting techniques involving other investors was systematic, she said. The Villalobos brothers themselves spoke of operations going back to 1980 with some individual investors with them for as long as 12 years, she added.

Luis Enrique Villalobos said he simply accepted loans from friends, so the prosecution is trying to refute this claim.

The investigation led by Flores showed a slightly higher total intake from investors relative to earlier estimates, with about $404 million for the period 1996-2002.

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A.M. Costa Rica fourth news page
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San José, Costa Rica, Tuesday, Feb. 13, 2007, Vol. 7, No. 31

Mauricio Barrera is the cook. He has been here a year and a half fleeing what he called an intolerable situation in his native Colombia.

A.M. Costa Rica/Saray Ramírez Vindas

A little treat from South America with a Colombian accent

By Saray Ramírez Vindas
of the A.M. Costa Rica staff

They are a crunchy treat halfway between an English muffin and a biscuit.

They are best known as a Venezuelan treat, and a cafe in Santa Ana used to produce them on demand.

Well, the corn flour arepa still is here in a small business on the Paseo de los Estudiantes in San José, just a few feet from the Instituto Nacional de Acueductos y Alcantarillados on Avenida 10.

And these arepas are Colombian. Cumbia Colombiana fills the air from the CD player and the employees speak with an accent typical of Bogotá.

Immigration has caused problems in Costa Rica, but the movement of refugees and others also brought amazing gastronomy treats. Colombians living in Costa Rica also have brought their rich culinary traditions with them.

The place is called Arepas Pués, and 250 colons, a bit less than 50 U.S. cents, buys much more than a food product. Monday a reporter sat with the owner and employees of the little restaurant. They all were friends in Colombia, from

the same suburb of Bogotá, and each had to leave that battle-torn country. They chatted about their life.

Owner Adriana Moreno came here five years ago as a refugee and has since gained her residency. She said her first years here were hard. Two daughters. 22 and 12, still are in Colombia with her mother. And the Costa Rican culture, she said, is very different and life moves slower here than in the Colombian capital.

She said she is surprised at how tolerant officials here are toward crime and prostitution. Her restaurant is in a location where crime and prostitution are not unknown.

The business has been open for two years with typical Colombian food served with heavy, colored ceramic dishes, as is the custom.

As is typical with arepas, cheese, meats and other treats can provide a variety of flavors. Chorrizo, a Colombian type of the usual sausage, and chicharrón can convert the single arepa into a full meal. They are washed down with a tinto, which is what Colombians call a black coffee.

The Colombian arepa is flatter than the Venezuelan variety. They still are cut almost in half and stuffed with goodies in the style of pita bread.

Venezuela buys out Verizon's stock holdings in CANTV

By the A.M. Costa Rica wire services

The government of Venezuela says it has signed an agreement to buy an American company's interest in Venezuela's largest telecommunications company.

Monday Venezuelan officials announced the agreement to purchase 28 percent of CANTV from Verizon, a telecommunications company based in the United States. The purchase defuses the possible international ramifications that would develop if Venezuela simply took over the firm.

In early January, President Hugo Chávez said Venezuela

should regain control of strategic sectors of its economy. He asked the national assembly to grant him special powers to nationalize businesses.

Last week, Venezuela agreed to buy a controlling stake in the country's largest private electric company.

Feb. 2, Mr. Chavez gave foreign oil companies three months to surrender control of their operations in Venezuela.

The U.S. has criticized the nationalization plan. Secretary of State Condoleezza Rice said last week President Chavez is destroying his country, economically and politically.

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San José, Costa Rica, Tuesday, Feb. 13, 2007, Vol. 7, No. 31

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A.M. Costa Rica Second newspage
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San José, Costa Rica, Tuesday, Feb. 13, 2007, Vol. 7, No. 31