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(506) 2223-1327               Posted Wednesday, May 19, 2010,  in Vol. 10, No. 97         E-mail us
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Paragon continues to collect civil suits in Florida
By the A.M. Costa Rica staff

A Florida lawyer has filed a class action suit against Paragon Properties of Costa Rica S.A, its U.S. subsidiary and its two owners seeking the bulk of a refund due a woman who decided not to buy Costa Rican property.

The lawyer, Matthew Sarelson, said that his case joined at least seven others in the Broward County Circuit Court. The lawyer's filing said that William Gale, chairman, and Esteban Soto, the company president, have not returned the bulk of a $29,900 deposit the woman paid before she inspected land in Costa Rica.

The woman signed a purchase contact that said she could get her money back within 10 days if she decided not to buy.

The case is unusual because the women did not purchase land here. In early 2009, Gale reported that his firms had sold  2,509 lots in some 17 projects along the Pacific coast. Many of those purchasers put down an initial deposit, perhaps 40 percent. According to a typical purchase agreement, the buyers said they would pay the balance and build a home, perhaps in as little as two years. Paragon agreed to put in roads, water systems in some projects and other infrastructure.

The agreement also said that buyers would not receive a deed to the land until it was paid off.

Many Paragon customers have complained that they have not received deeds or that there has been little or no infrastructure work done on the project in which they purchased land. Others have complained that they cannot get clear answers from Paragon. Gale, of course, has blamed the struggling economy and promised last August to live up to his agreements.

Some former Paragon employees complained that they have not been paid since Thanksgiving. The company's Web site has not been updated since 2008.

In short Paragon is well situated to be one of those Costa Rica real estate legends.

The Florida lawyer, Sarelson, incorrectly calls the Paragon operation a ponzi scheme. But a ponzi scheme is when early investors are paid with money collected from later investors. Paragon has not paid any land buyers. The lawyer also alleged fraud in his civil filing, which may be closer to the mark if his allegations are true.

The individual involved is Anita Oginsky of Corunna Michigan. She signed an agreement with Soto Oct. 31, 2007, according to the suit. She threatened Paragon with a suit once before, and the firm responded with a legal threat of its own, according to the suit. Finally the company entered into an agreement to refund her money, but only delivered $5,800, said the filing.

Sarelson named these individuals as having filed cases against Paragon or Gale in Broward County; Charles Arena, Stephen D. Benson, Louis J. Weinstein, George Rosenthal, Steven S. Maves and Sid Crossly. Another man, seems to have won a
case in Connecticut and registered the judgment in Florida.

There do not appear to be open cases in Costa Rica against the company, even though many of the agreements were made here. Court records are not as accessible here, but a former employee said that Paragon just transferred 250 lots to another company, and that would not have been possible if the local courts had frozen the land. The transaction also would not have been possible if the company has filed deeds in the name of other persons for the lots that were transferred.

Just as in the Villalobos lending operator failure, most of the U.S. citizens involved are unfamiliar with Costa Rican law and do not have easy access to legal advice.

Michael J. Fingar, a Paragon lawyer, took issue with an A.M. Costa Rica news story in a letter in January 2005. Said the lawyer in his critique of the story: "Sixth, and this is perhaps your most egregious misstatement, is the idea that purchasers cannot cancel at the end of their inspection. That falsity is contradicted by the contract, and elsewhere in the most straightforward language."

A.M. Costa Rica had written the month before that the company was providing a skimpy contract and gave a list of questions buyers of subdivision lots should ask.

Subsequently, A.M. Costa Rica accepted advertising from the firm but did not seek renewal of the advertising contract when the last ad expired Feb. 14, 2008. Up until that time the newspaper had not fielded many complaints, and Paragon seemed to be moving ahead as it promised.

In an unusual twist, Sarelson provided two pages on Internet search engine results in his 11-page filing. The material is from a site called the Ripoff Report and contains complaints posted about Paragon.

Sarelson has made the initial court filing available on his Web page.

There have been other court cases, but in at least one case, the lawyer working for the purchaser refused to discuss the situation.

Paragon had potential purchasers deposit substantial sums in the escrow account of a Florida lawyer when the prospects agreed to take a free trip to Costa Rica to see land.

The escrow agreement released the money to Paragon when the visitor signed a purchase contract even though little or no site work had been done.

Although many would-be Costa Rican retirees are unhappy with Paragon, they are not alone. Condo projects and entire subdivisions collapsed with the economic downturn in the north. In some cases, the developers were trying to build out their projects on the money provided by the buyers. When buyers dried up, so did the money. In other cases, crooked developers just built a gatehouse, collected a lot of money and then vanished.

Despite the cases in Florida, the full scope of the Costa Rican property tragedy is yet to be revealed.


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San José, Costa Rica, Wednesday, May 19, 2010, Vol. 10, No. 97

Costa Rica Expertise
Costa Rica Expertise Ltd http://crexpertise.com E-mail info@crexpertise.com Tel:506-256-8585 Fax:506-256-7575

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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.


Real estate agents and services

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Legislative pay raise hits
a legal barrier at Sala IV

By the A.M. Costa Rica staff

Lawmakers of the Partido Acción Ciudadana submitted the proposed pay raise for legislative deputies to the Sala IV constitutional court Tuesday, which will at least delay approval of the measure.

The minority party members also called on President Laura Chinchilla to veto the raise when the legislation reaches her desk.

The political party said that its court filing says that the pay raise for lawmakers is abusive, irresponsible, for their own benefit and was done with a violation of procedures. Lawmakers want to increase their pay 60 percent to 4.5 million colons a month, about $8,000.

Putting pending legislation before the court is done often here.

At least 44 of the 57 lawmakers approve of the pay raise, although there has been no vote on the measure itself. Lawmakers, however, have voted to place it on the so-called fast track to limit debate and to arrange for quick approval.

Meanwhile, Acción Ciudadana had a success in the legislature. Lawmakers passed on first reading a measure to provide funding for education equal to 8 percent of the gross national product. That's a 2 percent increase that Acción Ciudadana lobbied for aggressively. All 57 lawmakers voted for the change. The new percentage will be in the budget for 2014.


Our reader's opinion
Legislators out of line
in seeking big pay raise


Dear A.M. Costa Rica:

It has been with a measure of amusement, and an equal measure of disgust, that I have followed the recent actions of the new Costa Rica legislature. While the nation was riding the high hopes of a new administration, led by the first female president ever no less, the legislature jumped into the fray by addressing the single most important issue facing that most austere body.

Amid the crumbling bridges, worn out and poorly constructed roads, abject national poverty, rampant crime and a myriad of other national maladies, the legislature stepped forward and decided. . . to raise its pay!

I admit to having misunderstood the initial figures which stated legislators made about $4,500 and wanted a raise to $7,200. That seemed reasonable to me until I realized they were talking per month and not annually. And now the latest figure I read is that they have increased their wants to about $8,500 PER MONTH!

According to the National Bank, the average salary in Costa Rica is $455 per month. Therefore, according to my calculations, this means that each legislator believes that they are almost 20 times more important than the average citizen. Total it up and almost six million dollars will be paid to these 57 individuals this year, almost 24 million dollars to them over the course of their four-year terms, and one wonders what the nation will get in return. If history is any determination, the nation will get four more years of sluggish, irrational behavior, clothed in jibberish that makes little or no sense. (Refer to the new traffic laws, arbitrary taxes on high-end homes, immigration statutes, and on and on.)

Two of the legislative minority parties voted against this blatant slap in the face of every Costa Rican, and they should be applauded now and remembered when the next elections roll around. The final vote was 44-11 in favor of the measure (apparently two legislators couldn't make it, or simply didn't want any part of this mess.)

It continues to mystify me as to why elected representatives of the people believe themselves to become more important than those who put them in office in the first place. This seems to be true of all elected officials everywhere, not just Costa Rica.

But here's the real kicker: This terrible measure apparently has the support and endorsement of the new president.

James Lynch
San Francisco de Heredia

Highway to Limón open
for three hours more


By the A.M. Costa Rica staff

Highway officials have decided to extend the time when drivers can use Ruta 32, the key highway from San José to Guápiles and Limón.

Drivers now have three more hours to pass by the dangerous section between kilometers 22 and 24 where the hillside has slid and more slides are expected.

The route will be open from 6 a.m. to 6 p.m.  That is during the daylight when spotters can detect any movement above. Traffic police will supervise.

Vehicles are restricted to one lane, and traffic policemen will provide an escort.

The highway passes along steep slopes that engineers say should have been reduced when the road was constructed in the 1980s. The highway cuts the travel time to the Caribbean coast and is usually less dangerous than the winding alternate route through Turrialba.


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A.M. Costa Rica guide

This is a brief users guide to A.M. Costa Rica.

Old pages
Each day someone complains via e-mail that the newspages are from yesterday or the day before. A.M. Costa Rica staffers check every page and every link when the newspaper is made available at 2 a.m. each weekday.

So the problem is with the browser in each reader's computer. Particularly when the connection with the  server is slow, a computer will look to the latest page in its internal memory and serve up that page.

Readers should refresh the page and, if necessary, dump the cache of their computer, if this problem persists. Readers in Costa Rica have this problem frequently because the local Internet provider has continual problems.

Searching
The A.M. Costa Rica search page has a list of all previous editions by date and a space to search for specific words and phrases. The search will return links to archived pages.

Newspages
A typical edition will consist of a front page and four other newspages. Each of these pages can be reached by links near the top and bottom of the pages.

Classifieds
Five classified pages are updated daily. Employment listings are free, as are listings for accommodations wanted, articles for sale and articles wanted. The tourism page and the real estate sales and real estate rentals are updated daily.

Advertising information
A summary of advertising rates and sizes are available for display and classifieds.

Contacting us
Both the main telephone number and the editor's e-mail address are listed on the front page near the date.

Visiting us
Directions to our office and other data, like bank account numbers are on the about us page.


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San José, Costa Rica, Wednesday, May 19, 2010, Vol. 10, No. 97


Kites on way north
Photos by Daniel Martinez
The Mississippi kite is an important part of the northbound migration on the Caribbean coast. The
small birds of prey winter in tropical America and head north at this time of year.

Bird watchers on the Caribbean counted more than 600,000
Special to A.M. Costa Rica

Final counts from the Kèköldi raptor observatory for the spring migration season are in, with slightly over 600,000 birds of prey, vulture, and storks recorded.

The count had complete coverage from Feb. 17 to May 6.

Top species were turkey vulture with 385,500 individuals, 
while 116,000 broad-winged hawks, 55,000 Swainson’s hawks, and 44,000 Mississippi kites made up the bulk of raptors counted. Lesser numbers of another 12 species of hawks, kites, and falcons were recorded. A single aplomado falcon was about the fifth sighting for Costa Rica ever.

Wood storks totaling 1,440 also passed the 11-meter observation tower on a ridge near Puerto Viejo on the Caribbean coast.

This is the Compañía de Danza Folclórica Huanacaxtle that comes from the Universidad de Costa Rica Liberia campus. The group will perform the afternoon of June 4.
Guanacaste dancers
Oficina Regional de Cultura de Guanacaste photo

Two festivals join together in Guanacaste in early June
By the A.M. Costa Rica staff

There will be a double festival in Abangares from June 3 to 6. The third Festival Guancastearte will join with the fifth Festival Oro, Café y Mariscos.

The Guanacastearte is held in a different community in the province each year. Next year the event will be in La Cruz.

Both events are supported by the Ministerio de Cultura and Juventud. Guanacaste has its own culture with traditional dances and music.

The double event begins June 3 with morning and afternoon workshops and an opening parade at 3 p.m. with local and invited artists. A number of artistic presentations will
follow in the Gimnasio Municipal. In addition, there is a puppet theater from San José and a local folk dance group. The day closes with an 8:30 p.m. dance for the public.

The fair goes into high gear Friday with workshops for dance, murals and the visual arts. There is a noon concert, more folk dance exhibitions in the afternoon and a presentation of Abangares popular songs at 7 p.m.

Saturday has an afternoon of dance, workshops and theaters, ending with a tango presentation at 7 p.m. One event that might interest expats is Sunday at 10 a.m., a fair of small cultural businesses, also at the gym.

The local fair gets its name because the area has been producing gold since before Columbus arrived.

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San José, Costa Rica, Wednesday, May 19, 2010, Vol. 10, No. 97

At the press conference: Fernando Ocampo, deputy negotiator; Anabel González,  minister of Comercio Exterior; President Laura Chinchilla; Gloria Abraham, minister of Agricultura y Ganadería; and Roberto Echandi, chief negotiator.
negotiators
Casa Presidencial photo


Exporters, politicians and textile firms pleased at accord

By the A.M. Costa Rica staff

Business groups and exporters are generally thrilled at the trade agreement with the European Union that allows entry without tariffs of much of the country's products. Textile producers are thrilled, too.

The agreement was reached late Monday.

According to reports from Madrid where the negotiations reached a successful end, Central American states are guaranteed the same deals that the European Union may work out with South American nations. The Mercosur group of nations, which includes Argentina, agreed Tuesday to resume negotiations that had been frozen.

President Laura Chinchilla said she was happy that the country would have better access to the 500 million in the European Union.

She appeared in a video conference from Spain. She said reaching the accord was one of her goals in her first 100 days in office. The president noted that with the free trade treaty with the United States and a proposed trade treaty with the People's Republic of China, the country would have access to the major markets of the world.

The Asociación Nacional de Exportadores de la Industria Textil and the Cámara Textil Costarricense reported that their industry had achieved the right to export 7 million
units of various types of clothing and four million units of socks. This quota will increase 9 percent per year in the first five years, the organizations said.

However, it was in agriculture where the major problems developed in the negotiations. Gloria Abraham Peralta, minister of Agricultura y Ganadería, said that the European Union agreed to progressively reduce its banana tariff of 176 euros per ton to 75 euros over 10 years. In the first year Costa Rica gets a million ton quota which will increase 5 percent each year. European countries are trying to protect the exports of their former colonies where bananas are produced.

Costa Rica also earned a 200 metric ton quota for milk of the 1,900 tons allotted to all of Central America. There is a quota for hard cheese of 317 metric tons that will increase 5 percent each year.

Costa Rica also will be able to export 9,500 tons of meat and 20,000 tons of rice free of duties each year. Frozen shrimp and yucca get free access immediately.

Negotiations between the European Union and the Central American states began in 2007.

The Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado noted that Costa Rica provides 60 percent of the exports that Central America sends to the European Union.


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San José, Costa Rica, Wednesday, May 19, 2010, Vol. 10, No. 97

Medical vacations in Costa Rica

Euro and not the dollar
seems to drive gold price


By the A.M. Costa Rica wire service

While a falling euro has grabbed financial headlines, the price of gold reached a record high last week and has since hovered around $1,200 an ounce, that is up from $930 a year ago and $270 a decade ago.  Analysts say a worsening debt picture among industrialized nations has reduced confidence in the world's major currencies and made precious metals more attractive to investors.

When faith in national currencies declines, many people still turn to gold to preserve their financial worth and, they hope, turn a profit.

Bank of America analyst Mary Ann Bartels said: "People concerned about inflation like gold," she noted.  "And it is a store of value.  So it really answers a lot for a broad investor base."

A surge in demand for gold recently pushed its price to an all-time high.  And buyers are not limited to wealthy investors.  Earlier this month, Beijing policeman Ding Jingshan showed up at a gold market to make a purchase.

Ding is not alone in believing that gold will rise above the current $1,200-an-ounce range. 

"We have had a target for some time on gold of $1,500 to $1,600, and we are still very comfortable with that target," added Ms. Bartels.

Fear of inflation often heightens gold's appeal.  But analysts see low short-term inflation risks in the United States and other major industrialized nations as a fledgling global economic recovery takes shape.

But for the long term, things look murkier in Europe and elsewhere, with massive fiscal imbalances and staggering debt forcing governments to scramble and make painful decisions.  The Greek debt crisis has weighed heavily on the euro and boosted gold's appeal, according to Rachel Benepe, portfolio manager of First Eagle's Gold Fund.

"The risks are out there," said Ms. Benepe.  "With the European zone having issues, people are worried about currencies.  It is not really surprising that gold has become a substitute currency, and that more investors are moving into it."

Some analysts foresee a scenario where unsustainable debt in the United States and Europe eventually forces central banks to devalue their currencies. 

A major currency devaluation today would almost certainly unleash global panic-buying of precious metals, pushing the price of gold to staggering new highs.

But Rachel Benepe envisions an alternate scenario.

"Once fear starts to subside a little bit, people will move out of gold," added Benepe.  "It is really there as a hedge.  And it is really there to protect your money in the face of that risk."

Historically, gold prices have trended higher amid a falling U.S. dollar, and vice-versa.  But recent months have seen both the dollar and gold rising at the same time, what Bank of America's Ms. Bartels calls a decoupling of the traditional inverse relationship.

"Gold has decoupled from the dollar," explained Benepe.  "Really, this is a story of a weaker euro, not a stronger dollar."

Bottom line: if the euro recovers, expect gold prices to moderate.  If not, the future price of gold is anyone's guess.
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San José, Costa Rica, Wednesday, May 19, 2010, Vol. 10, No. 97


Latin American news
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Judge lets assault suspect
go free in Dominical case

By the A.M. Costa Rica staff

A judge decided Tuesday that prosecutors have insufficient evidence to hold a 25-year-old man facing an allegation that he brutally beat and critically injured a Dominical area expat.

So the judge in the Juzgado de Osa, set free the suspect, Jasón Rojas Rodríguez.

Meanwhile, Ben Vaughn, the victim, remains in Hospital CIMA surrounded by family and friends.

Indira Aguilar, a public defender assigned to Rojas, said that the judge lifted restrictions on the man because the Judicial Investigating Organization could not find sufficient proofs. Monday Rojas was ordered held for six months preventative detention.

For some reason that has not been made clear, agents also leveled a fraud charge against the man, who, according to Dominical sources, used to work for Vaughn's Guys in the Zone real estate company. There were insufficient proofs for that, too, the judge ruled.

The man has to sign in every 15 days with prosecutors, and he cannot leave the country, according to the stipulations of the judge.

William Soto, the prosecutor assigned to the case, said that judicial investigators will continue to seek evidence that could lead to possible future judicial processes.

The manner in which Vaughn was injured generated conflicting stories. Initially he was participating in a community watch and spotted men burglarizing a home. Later friends said he simply was sitting at home and saw a man steal something. In any case, the confrontation that led to his critical head injury took place near a restaurant where friends said there were witnesses.

Students face robbers

By the A.M. Costa Rica staff

Three 16-year-old high school students became robbery victims Tuesday in two separate incidents.

A band of four juveniles, from 12 to 16 years, robbed a student of the Colegio Superior de Señoritas of her backpack by the point of a knife to the neck and threatened a classmate, said the Fuerza Pública. Officers apprehended the four shortly after a passerby came to the aid of the girls. The girls left school and were on the way to a bus stop in the center of San José. Two of the suspects, both females, had been suspended from another school recently.

In Plaza González Víquez, two men held up a Liceo de Costa Rica student. Two suspects were captured quickly.


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