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These stories were published Tuesday, Feb. 18, 2003, in Vol. 3, No. 34
Jo Stuart
About us
Investors, war and U.S. economy
Multiple factors crimping the economy here
By the A.M. Costa Rica staff

English speakers in Costa Rica are in the midst of tough economic times. But their economic problems may be secondary to what is turning out to be a lean tourism season.

The defaults by the Luis Enrique Villalobos Camacho and Savings Unlimited investment operations are one reason North Americans are broke and unhappy. But tourism also seems to be below expectations, and the tourists who are here seem to be very careful in spending money.

U.S. snow storm 
disrupts tourism

War fears are a major effect, and many business people are bracing for a hot war between the United States and Iraq. They feel that such a war will disrupt even more the lackluster tourist season. A struggling U.S. economy and unemployment are other concerns.

The problem ranges up from Golfito and the Osa Peninsula where a tourism official said foreign visitors were about 20 percent of normal. On the Caribbean, some hospitality businesses still are trying to rebuild after the heavy storms of late November and early December. In addition to physical damage, the storms had a strongly negative public relations effect.

Residents who attended the week-long Puntarenas carnival that ended Sunday said they were surprised by the absence of many foreign tourists. The Pacific beach communities also seem to be feeling the slowdown.

Even in San José where hotel bookings seem solid, some nightspot owners who cater to North Americans report their income is off at least 15 percent. And that is not using the shaky 2001-2002 tourism year as a base. The restaurant and bar owners are talking about the average over a number of years.

Upscale restaurant owners in heavily English-speaking Escazú are singing the blues, and some have their operations for sale.

Investors with the Villalobos firm cite the economy as one reason Costa Rican officials should drop investigations and allow him to return to business. He closed his office and went into hiding Oct. 14.

However, some observers of the economic scene think that investors overestimate the impact of the Villalobos 3 percent per month interest payments. Most investors rolled the interest over to get more, they say. So the money was just a bookkeeping entry.

Monthly interest for investors, based on an average balance of about $100,000 would be $19.2 million a month. Some say the monthly interest was as high as $30 million.

Some investors took their payments as cash during monthly visits to the Mall San Pedro location. But the economic impact is hard to determine without knowing how much was rolled over, how much was sent out of the country and how much actually was spent by investors here.

In addition to San José, the failure of the two investment operations (Savings Unlimited closed down Nov. 22), has hit pockets of North Americans all over the country. From the beach communities of Flamingo, Tamarindo, Nosara, Jacó, Quepos and Manuel Antonio to the Arenal area to Pérez Zeledón, concentrations of foreigners are not spending the way they did in the past. And tourist numbers are down.

Something stressful is happening with upscale restaurants that cater to North Americans. Some host just a handful of customers each night. Others are empty. So are some elite hotel dining rooms.

Restaurant owners and workers in Escazú, where a large number of ex-pats live, have reported falling customer numbers in the months since the collapse of the ill-fated investment operations.

From high-end to average-priced restaurants, the reverberations of the investment collapses, which had a largely North American

We're waiting

and European clientele, and the economic downturn have been felt across the whole cross-section of the restaurant trade. But declining tourism also may be responsible.

Possibly one of the most affected restaurants is Café de Artistas. The owner there, Bill Hill, said 50 percent of the café’s customers were from the ex-pat community, but since the investment collapses, trade from ex-pats has declined greatly. He has extended hours to compete.

Professionals in the area have voiced concerns over the reliance of businesses on ex-pats.

Joanne Loewen, a local graphic designer, said that a lot of businesses are going to have to change their emphasis. She said many places, not just restaurants, relied too much on customers from the foreign resident community, dominated by North Americans.

Mrs. Loewen added that it isn’t just the local business owners that suffer from this downturn in the local economy, but the employees of the restaurants, many of whom are Costa Rican and Nicaraguan. 

She also spoke of the situation with the more expensive restaurants. "Higher-end places have a lower occupancy rate, but they’re not dying," she said.

Mrs. Loewen designs advertisements and logos for many of the affected businesses in Escazú.

Other restaurants and bars have been affected, too. 

Lofty Tweedale, owner of El Ché in San Rafael de Escazú, said businesses are definitely affected by the investment collapses, including his own. However, he added that businesses must constantly evolve to external forces.

Edwin López, a waiter at Restaurante Cerutti, also in San Rafael de Escazú, said that although business there remains steady, the restaurant has noticed that some of its ex-pat clients have not returned in a while. The restaurant was empty Saturday night Jan. 25, when a reporter dropped by.

Tony Roma’s, a U.S. restaurant franchise with a location in Escazú, reports that its business is "so, so." But this isn’t necessarily as a result of the investment collapses, said Carlos Sovrino, the restaurant’s service manager. 

Sovrino said that the restaurant’s slowdown in business is due to a high level of competition. "The problem here is [that] there [are] too much bars," he said. He added that the slowdown wouldn’t force the business to close.

Sovrino said that he has noticed a few of the restaurant’s North American regulars drop off. But, he said, only 20 to 25 percent of the restaurant’s customers are North American anyway. 

Neighboring TGI Fridays, also a U.S. franchise, reports business to be normal, according to the restaurants manager. The restaurant was visibly busy when the manager was contacted.

Other businesses in Escazú have reportedly incurred drops in ex-pat customer numbers, including, among others, dry cleaning services.

Tourist numbers through October show less than a 2 percent decline in North Americans. But current numbers are not yet available. Most of the concern about war came after October.

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Fierce U.S. snowstorm snarls air travel here
By the A.M. Costa Rica staff

A heavy winter storm, caused in part by El Niño, swept over the northeastern United States Monday, paralyzed cities and caused problems with air flights as far away as Juan Santamaría Airport here.

All travel in and out of Washington, D.C., New York, New Jersey and, later in the day, Boston came to a halt as from 18 inches to three feet of snow blanketed the area north of Kentucky and east of Illinois. Some 22 people have died.

El Niño contributed by causing a warm-air buildup in the southern United States that a Canadian cold front converted to snowfall as it moved north.

The problems in the U.S. Northeast complicated travel here.

Hotels across San José said that incoming guests called up to say that their flights to here had been canceled because of the snowstorm.

Similarly, hotels also experienced problems with passengers who were supposed to check out and go to the airport for flights to the United States. 

American Airlines’ new direct service to John F. Kennedy Airport in New York was one flight canceled. Others reportedly followed suit.

In the mid-afternoon, a Hampton Inn representative said that the hotel had 25 reservation holders staying longer due to flights canceled leaving Costa Rica. 

The representative said 15 reservation holders informed the Hotel Sunday that they would not be able to make their bookings on time due to the imminent storm. The representative said that he had no data for reservations canceled or delayed for Monday.

The Hotel Don Carlos, when contacted, said it had four reservations extended and three incoming reservations delayed or canceled.

Other hotels in the San José area, including the Hotel Presidente, the Hotel Radisson Europa, the Hotel Balmoral and the Hotel Best Western in the downtown, also said they had reservations delayed or canceled from incoming guests, or people due to leave who required at least an extra night’s stay.

A Hotel Barceló San José Palacio representative said that the hotel did have reservations from people coming from the affected areas, but had not yet been contacted with information on delays or cancellations.

Representatives at Juan Santamaría Airport could not give an exact figure on the number of flights or passengers affected.

NASA unveils a ‘baby picture’ of virgin universe
Special to A.M. Costa Rica

GREENBELT, Md. — NASA has released the most detailed image yet of what the early universe looked like only several hundred million years after the ‘Big Bang.’

Scientists, using NASA’s Wilkinson Microwave Anisotropy Probe, created the image from a 12-month sweep of the entire sky.

 "We've captured the infant universe in sharp focus, and from this portrait we can now describe the universe with unprecedented accuracy," said Dr. Charles L. Bennett of the Goddard Space Flight Center in Maryland and the probe’s principal investigator.

Among the early findings from the data is the first generation of stars in the universe ignited only 

NASA photo
Red hot spots and blue cold spots show vestiges from the infant universe.

200 million years after the ‘Big Bang,’ much earlier than previously thought. In addition, the new portrait precisely pegs the age of the universe at 13.7 billion years old, with a remarkably small 1 percent margin of error.

Running gun battle
leaves suspect dead

By the A.M. Costa Rica staff

Three men held up an auto parts store Monday morning but police chased them down, killed one and arrested a second.

The midmorning drama played itself out starting at the Repuestos Conejo store in Guadalupe, northwest of San José. Three robbers entered the parts store, took an estimated 5 million in cash (about $13,000) and also the wallets and cellular telephones of some customers.

But the quick arrival of several policemen put them to flight and kicked off a running gun battle through heavily populated city streets.

Finally police shot out the front right tire of the fleeing Hyundai Excel, and the vehicle crashed into the rear of a car occupied by a middle-aged couple in front of the Liceo Napoleón Quesada.

A third suspect managed to flee the scene by hailing a taxi amid the confusion. In the rear seat of the vehicle police found the body of a man identified by the last names of Torres Sibaja.

 A bloodied suspect, identified as Johnny Quirós Chaves, suffered superficial wounds of the head and was thrown to the ground and handcuffed by police. He also suffered a bullet wound in the chest and was taken in serious condition to Hospital Calderón Guardia

The parts store, one of a chain, is located near the former Reina movie theater. In all the running gun battle traveled 1.5 kms., nearly a mile. The route was littered with shell casings.

Walter Navarro, Director of the Fuerza Pública, arrived on the scene to say that the morning’s work showed what his police force could do.

Top UNESCO official
here for a visit

By the A.M. Costa Rica staff

The secretary general of the United Nations Educational, Scientific and Cultural Organization is in town.

He is Koichiro Matsuura, and he will be visiting with Roberto Tovar, the foreign minister, this morning. Wednesday he will visit the Parque Nacional Santa Rose with Carlos Manuel Rodríguez, the minister of Ambiente y Energia. The minister will formally ask at that time that the 16,000 hectares (nearly 40,000 acres) of the Hacienda Santa Elena be listed as the Area de Conservación Guanacaste as a internationally known patrimonial site.

Gas prices going up
at Costa Rican pump

By the A.M. Costa Rica staff

At midnight, the price of gasoline took a jump, in part due to concerns about possible diminished supplies in case of a Mideast war.

Regular gasoline that was 225 colons per liter jumped 26 colons to 251. That brings the price of a gallon up to 965 colons or about $2.52 a gallon based on the current rate of exchange.

The price hike had been approved earlier by the Authoridad Reguladora de Servicios Públicos. 

Soldiers to continue search for Americans

By the A.M. Costa Rica wire services

BOGOTÁ, Colombia — Soldiers here, backed by helicopters and reconnaissance planes, are expected to continue their search Sunday for three Americans feared kidnapped by leftist rebels in the southern part of the country. 

The country's top military commander, Gen. Jorge Mora said Saturday the rebels of the Revolutionary Armed Forces of Colombia took the three hostages. The single engine U.S. aircraft was on an anti-drug mission when it went down in Caqueta province. 

Mora said two other passengers — an American civilian and a Colombian intelligence officer — were shot to death.  Search teams found the wreckage of the plane Friday along with the bodies of the two victims. 

Caribbean twins
elect new president

By the A.M. Costa Rica wire services

PORT-OF-SPAIN, Trinidad and Tobago — The parliament here has elected Maxwell Richards as the Caribbean nation's new president.  The Electoral College selected Richards Friday over rival lawyer Ganace Ramdial by a 43 to 25 vote. 

Richards succeeds president Ray Robinson, who leaves office next month.  Richards will serve a five-year term in office. 

The 71-year-old chemical engineer and former principal of the Trinidad campus of the University of the West Indies will become the fourth president of the twin-island nation March 17.

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Some investors are filing complaints in the U.S.
By the A.M. Costa Rica staff

The legal situation of Luis Enrique Villalobos Camacho is getting more complex every day.

In addition to investigations here in Costa Rica, individual investors have reported that they have filed complaints in the United States with a variety of agencies.

These filings are separate from a claim by a moderator of an Internet discussion list that Villalobos has been indicted in the United States. That individual Robert Kelly, has a list called "Costaricafraud" on the Yahoo groups service.

But his claim of indictments has never been backed up with evidence to his list members. An indictment in U.S. law means that a grand jury has studied the evidence and believes there is reason for law enforcement officials to apprehend the suspect and begin the trial process.

Kelly’s claims notwithstanding, other investors in the defunct Villalobos high-interest operation have said they individually have filed complaints with the U.S. Securities and Exchange Commission, local police agencies and federal-level officials. At least one investor is in contact with the U.S. Federal Bureau of Investigation.

Villalobos is subject to U.S. law because his corporations accepted money from U.S. citizens at banks in the United States. 

The Security and Exchange Commission told a reporter late last year that no information would be made public on investigations. However, the agency, which polices investment and stock sales in the United States, usually moves with a civil action before referring a case for criminal constitution with the relevant U.S. attorney, which is what federal-level prosecutors are called.

In addition to federal officials, some investors have said they complained to Security and Exchange-type agencies in their home states. Each state has one.

What these complaints in the United States could mean is not completely clear. A complaint is something less than a criminal charge. Police would have to investigate to determine if a crime were committed. Then a public prosecutor would have to make a decision to proceed with a criminal case.

Civil cases in the United States are brought to court by private parties. At the very least, either type of legal action could result in further freezing of any Villalobos assets in the United States. A criminal charge could cause U.S. law enforcement personnel to search harder for the fugitive financier.

The United Concerned Citizens & Residents of Costa Rica have as its goal the dismissal of charges here against Villalobos so he can return to distribute funds to investors. They will be meeting this week in an effort to hire José Miguel Villalobos Umaña, a lawyer and former minister of Justicia, to work toward that end. The group is raising money.

Members of this group are convinced that Villalobos went into hiding Oct. 14 after he closed down his investment business in order to escape unfair prosecution by avaricious Costa Rican politicians. They reject suggestions that his operation that paid 3 percent a month was actually a money laundering or ponzi scheme.

If charges are leveled in the United States, and Villalobos is found living in a third country, Costa Rica and U.S. officials might end up fighting to get the man into their court.

Villalobos might have as much as $1 billion on his books from an estimated 6,400 investors. The bulk of the investors are North Americans.

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.

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