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(506) 2223-1327                       Published Monday, May 28, 2012, in Vol. 12, No. 105                           Email us
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Jo Stuart
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Sometimes trust can be a costly one-way street
By the A.M. Costa Rica staff

More than one expat has been reduced to poverty because he or she entrusted money to a lawyer, and the lawyer simply kept the cash.

This seems to be the easiest way for expats to lose their funds, because Costa Rica does not have a specific law establishing so-called trust accounts.

One lawyer is now a fugitive because he offered expats a way to make a return higher than the paltry amount from a bank deposit certificate. One expat says he lost $1.4 million.

Not everyone has access to that kind of cash. Some apartment owners are upset because some light-fingered rental agents have been keeping deposits instead of passing them on to the legitimate owner. This is small-time theft.

In these situations, the amounts are small enough so that judicial investigators are likely to shelve the file. The same people who complain about crooked employees or agents are quick to point out that there are plenty of honest persons in the real estate and rental businesses. The problem for a newcomer is to know the difference.

One gray area are those free online ad sites where advertisers post their own offers. There is no oversight by site operators who can spot the frauds.

A.M. Costa Rica receives fake ads every week from sources that are generally called the Nigerians, even though most scamsters do not live in Africa.

One repeating ad offers teacup Yorkies either for free or a cheap price. A reader initially alerted editors that these were scam ads. The would-be posters generally have a Gmail or Yahoo account that cannot be traced easily. One scamster last week tried to place an ad offering to give away an expensive racing bike. No doubt there were plenty of fees, taxes and shipping charges up front for the mythical bike.

The more local apartment frauds are more direct. Those involved in the rental business point out that some suspect individuals use photos of other properties or sometimes those taken from magazines. A big mistake would be for someone coming to Costa Rica to mail or transfer a deposit on the strength of photographs. Once here, someone renting an apartment or house would be wise to do a little detective work at the Registro Nacional or to make a short-term agreement with a credit bureau.  Credit agencies have detailed lists by name of ownership, court actions and work histories of nearly everyone. A.M. Costa Rica has written about such agencies HERE!          

Renters would be well advised to sign a contract only in the presence of the owner who can provide
I just want to be your friend!

clear identification, like a government-issued cédula.

An even bigger mistake would be to transfer large sums of money to a lawyer's account for the eventual purchase of real estate. A.M. Costa Rica receives complaints several times a year of lawyers who kept the money. Some simply considered the cash a loan and offer to pay the money back a few dollars a month. Local law seems to support that view.

The lawyer who is a fugitive, Rafael Medaglia Araya, accepted money for Costa Ricans and expats with the promise of using the cash to purchase properties. In one case, he presented to investors a man who was said to have the power to sell the property. That turned out to be an incorrect statement, said investigators.

One expat who says he was a scam victim notes that he had a long-term business and personal relationship with the lawyer. People tend to lower their guard with someone who is a family friend. Of course, not all family friends are crooks, but many crooks strive to be family friends. That is a lesson offered repeatedly to investors and expats in Costa Rica.

Expats frequently are frustrated at the bank when a teller examines in detail every piece of paper money, every deposit slip and every identity document. That's because there is a lot of fraud on both sides of the teller window.

Expats need to be just as picky as a bank teller in business situations. And when a bank teller says that no receipt is needed for a large cash deposit, as one told an editor last month, the expat needs to insist on a receipt and examine it carefully for date, amount and account number.

Expats are easy victims because they do not understand the way business works here. One absentee owner expat gave a lawyer a power of attorney to handle day-to-day management of his property. The lawyer sold the property and kept the money. The judge eventually said that was legal because the expat unknowingly had given the lawyer that power.

Watson wants to help Costa Rica police Isla del Coco
By the A.M. Costa Rica staff

Capt. Paul Watson was headed to Costa Rica to sign an agreement to protect the waters round Isla del Coco when his ship had a confrontation with a shark-fishing vessel.

The Sea Shepherd Conservation Society disclosed this on its Web site, and it reported that the organization would like to work with Costa Rica to defend sharks and other marine species. Watson was said to believe that his legal problem in Germany offers some very positive opportunities to reestablish Sea Shepherd as a cooperative partner with the rangers of Coco, the organization said.

Still Sea Shepherd said it will continue to work to urge Germany to decide to end extradition proceedings there. Costa Rica can also make the decision to withdraw the extradition, it added.

Watson is facing trial in Costa Rica over the claims by the shark fishermen that their boat, the  “Varadero I,” suffered damages and crew members suffered injuries in the run-in with Watson and the much larger “Ocean Warrior.” A quote attributed to Watson calls these claims absurd:

“If Costa Rica believes that there is a need to put me on trial over the absurd accusations of these fishermen we caught poaching sharks, then I am
prepared to cooperate with the judicial system to present our video evidence, our logbooks, and our crew as witnesses to those events. Costa Rica needs only to assign a date for a trial, and I will appear before the Costa Rican Court voluntarily, if given assurances that my safety will be guaranteed. There is no need for an extradition or preventive arrest. All Costa Rica needs to do is make a request to appear.”

The extradition is to insure that Watson shows up. Costa Rican prosecutors already have seen the video of the encounter between the two boats. They studied it a day or two after the 2002 encounter.

Costa Rican judicial workers announced a trial for Watson in 2006, but Watson told a reporter that he had not been notified. He had posted bail shortly after the incident.

Watson's organization said that Sea Shepherd was scheduled to sign an agreement with Costa Rica to work closely with the rangers the same way Sea Shepherd works with the rangers and the police of Ecuador in the Galapagos. Watson said he was working at the request of Guatemalan officials when he tried to curtail shark fishing there by the  “Varadero I.”

Watson met last week in Stuttgart, Germany, with  Enrique Castillo, Costa Rica's foreign minister, to discuss the arrest and extradition request.

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Trio who targeted tourists
given terms in prison

By the A.M. Costa Rica staff

Three thieves who stole luggage from a Norwegian couple on a bus in February have been given jail terms. Two got 10 months, and one got eight months.

The case was settled in an abbreviated process because the trio were caught red-handed as they got off the bus in Ciudad Quesada. The Norwegian tourists were heading to La Fortuna from San José, said the Poder Judicial.

The crooks were identified by the last names of López Gaitán, Martínez Rivas and Díaz Díaz. Díaz got the lighter sentence.

The three boarded the bus when it made a routine stop in Ciudad Quesada. While one blocked the view of the Norwegians, a second grabbed luggage, the trial panel was told.

Agents were following the men when they were on a bus. They had been the subject of at least 11 complaints, mostly by tourists. La Fortuna is near the Arenal volcano. Agents recovered documents belonging to the Norwegian tourist and her portable computer and skin diving equipment, they said. Police were able to interview the tourist.

At the time of the arrests, judicial agents said that Díaz Díaz was the subject of a warrant issued in Liberia for aggravated theft. Martínez has a record of 14 arrests for similar crimes, and López has been turned over to prosecutors 19 times, they said.

Woman faces allegation
of pimping three minors

By the A.M. Costa Rica staff

A woman goes on trial this week at the Tribunal Penal de Sarapiquí for aggravated pimping involving minors.

The Poder Judicial identified her by the last names of García Céspedes.

The allegation is that she brought three minors around to bars in Sarapiquí and Guápiles from January to May 2006 where the youngsters would be displayed to patrons. She is accused of selling the girls sexual favors for 5,000 colons, about $10, an encounter.

There are 12 witnesses scheduled to testify, said the Poder Judicial.

Find out what the papers
said today in Spanish

By the A.M. Costa Rica staff

Here is the section where you can scan short summaries from the Spanish-language press. If you want to know more, just click on a link and you will see and longer summary and have the opportunity to read the entire news story on the page of the Spanish-language newspaper but translated into English.

Translations may be a bit rough, but software is improving every day.

When you see the Summary in English of news stories not covered today by A.M. Costa Rica, you will have a chance to comment.

This is a new service of A.M. Costa Rica called Costa Rica Report. Editor is Daniel Woodall, and you can contact him HERE!
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A.M. Costa Rica Third News Page
San José, Costa Rica, Monday, May 28, 2012, Vol. 12, No. 105
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Hot time
on Avenida 10

Firemen tackle a blaze Friday on Avenida 10 in San José that ended up leveling three homes. Some 15 persons were made homeless by the fire that appears to have been caused by electrical wiring. Firemen from the Cuero de Bomberos controlled the flames in just 10 minutes, but that is all it took to destroy the structures,

fire on Avenida 10
Ministerio de Gobernación, Policía y Segruidad Pública/Paul Gamboa.

Feds use Web site to seek victims of Red Sea management fraud
Special to A.M. Costa Rica

The Department of Justice has set up a Web site for potential victims of the Red Sea Management $7 million stock manipulation scam. The department said that it would like to hear from persons who think they may have been victims of the Costa Rica-based fraud.

The Web site can be found HERE  and the individual cases can be found under numbers 11-cr-20121 and 12-cr-20049. 

This prosecution is part of efforts under way by the Financial Fraud Enforcement Task Force. 

This is the case that involved Red Sea Management and Sentry Global Securities, both based in the Edificio Colón in San José.  The principal of the brokerage firm has been sentenced in Miami to 20 years in prison for his role in a stock manipulation scheme that defrauded investors in a company called CO2 Technologies

The man, Jonathan Curshen, 47, was the principal of both firms. He was sentenced earlier this month by U.S. District Judge Richard W. Goldberg.  Red Sea Management and Sentry Global Securities are companies located in San José, Costa Rica, that provided offshore accounts and facilitated trading in penny stocks.

In addition to his prison term, Curshen was sentenced to serve three years of supervised release and was ordered to forfeit approximately $7.3 million.  Curshen and his co-defendant, Las Vegas stock promoter Nathan Montgomery, were convicted by a jury in January on all counts. 

The evidence at trial showed that in January and February 2007, Curshen of Costa Rica and Sarasota, Fla., and Montgomery, of Las Vegas, were involved in a scheme to illegally manipulate the stock price of CO2 Tech.

Evidence at trial showed that Curshen’s and Montgomery’s co-conspirators controlled the outstanding shares of CO2 Tech, which were used in the stock manipulation scheme.   

Montgomery and his conspirators engaged in coordinated
 trades in conjunction with the issuance of false and misleading press releases that were designed to artificially inflate the price of CO2 Tech shares to make it appear that it had significant business prospects.  

According to these press releases, CO2 Tech purported to have a business relationship with Boeing to reduce polluting gases emitted from airplanes, when in fact CO2 Tech never had any business or relationship with Boeing.

According to the evidence at trial, Montgomery and his co-conspirators, Robert Weidenbaum, Timothy Barham Jr., Ryan Reynolds and others fraudulently pumped the market price and demand for CO2 Tech stock through these press releases and coordinated trades of shares of CO2 Tech stock in order to create the appearance of legitimate buying interest by legitimate investors.  The evidence showed that as Montgomery and his conspirators pumped the price of the stock, Curshen and his conspirators facilitated the dumping of shares through the trading desk at Red Sea and Sentry Global Securities by selling the shares to the general investing public.  The evidence showed that these shares, which became virtually worthless, were purchased by unsuspecting investors, including investors in the Southern District of Florida.  The evidence showed that Montgomery, Weidenbaum, Reynolds and Barham were paid approximately $1 million in cash by their conspirators to participate in sham stock trades of CO2 Tech.  The cash was delivered to them in Miami via a private jet from an airport outside New York.

The evidence further showed that, from approximately 2003 through 2008, Curshen operated Red Sea as a money laundering hub in Costa Rica that established bank accounts and brokerage accounts in the United States and Canada under false pretenses and through nominee owners.  The evidence further showed that Curshen and his co-conspirators laundered the proceeds of the stock fraud from accounts in the United States to an account in Canada, all in an effort to conceal and disguise the nature and source of the proceeds.

Stock promoters Barham and Weidenbaum were sentenced to 30 months and 26 months in prison, respectively.  Michael Krome, a securities attorney from New York, who participated in the conspiracy and evaded federal securities registration requirements, was sentenced to 34 months in prison. 

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A.M. Costa Rica's Fourth News page
San José, Costa Rica, Monday, May 28, 2012, Vol. 12, No. 105
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River search
goes to the air

A security ministry helicopter rests on a bolder in the Río Pejibaye while its crew considers strategy. Rescue workers were out again Sunday seeking a 23-year-old man, identified with the last names of  Gamboa Valverde, who vanished after a tour raft overturned at midday Saturday.
river search
Ministerio de Gobernación, Policía y Seguridad Pública/Paul Gamboa

New technique outlined that can keep tabs on restless volcanoes
By the University of Bristol news service

A forensic approach that links changes deep below a volcano to signals at the surface is described by scientists from the University of Bristol in a paper published in Science. The research could ultimately help to predict future volcanic eruptions with greater accuracy.

Costa Rica's Red Sismológica Nacional at the Universidad de Costa Rica has noted the study and summarized it on its Web page.

Using forensic-style chemical analysis, Kate Saunders and colleagues directly linked seismic observations of the deadly 1980 Mount St. Helens eruption to crystal growth within the magma chamber, the large underground pool of liquid rock beneath the volcano.

Over 500 million people live close to volcanoes which may erupt with little or no clear warning, causing widespread devastation, disruption to aviation and even global effects on climate.  Many of the world’s volcanoes are monitored for changes such as increases in seismicity or ground deformation. 

However, an on-going problem for volcanologists is directly 
linking observations at the surface to processes occurring underground.

Ms. Saunders and colleagues studied zoned crystals, which grow concentrically like tree rings within the magma body.  Individual zones have subtly different chemical compositions, reflecting the changes in physical conditions within the magma chamber and thus giving an indication of volcanic processes and the timescales over which they occur.

Chemical analysis of the crystals revealed evidence of pulses of magma into a growing chamber within the volcano.  Peaks in crystal growth were found to correlate with increased seismicity and gas emissions in the months prior to the eruption.

“Such a correlation between crystal growth and volcanic seismicity has been long anticipated, but to see such clear evidence of this relationship is remarkable,” said Ms. Saunders.

This forensic approach can be applied to other active volcanoes to shed new light upon the nature and timescale of pre-eruptive activity.  This will help scientists to evaluate monitoring signals at restless volcanoes and improve forecasting of future eruptions.

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Londoners haven't caught
Olympic fever just yet

By the A.M. Costa Rica wire services

The Summer Olympics start in London July 27, and while interest has started to build a little, the city is not overflowing with excitement.

At Trafalgar Square, in the heart of the city, the official Olympic countdown clock gets a steady stream of people posing for pictures.  But most of them are foreign tourists. Many Londoners appear indifferent, worried or actually hostile toward the Games. 

"I think it is a waste of money," declared Dave Thomas, a man passing through the Square.  "All the money that is being wasted could have been spent on something else.” 

Jessica, a young woman on crowded Oxford Street was worried about her shopping trips during the Olympics.  “It is already busy in London,” she said.  “Imagine when the Olympics are here.  Imagine how busy it is going to be everywhere.  Nobody is going to be able to get around.”

And a woman named Amanda said she is not caught up in the Olympic spirit partly because she doesn’t like the event’s souvenirs. “The stuff they have designed to support the Olympics, they’re absolutely hideous,” she said.  “The Olympic logo thing is a complete and utter farce.  And those mascot toys that they’ve got, I have not met anyone who thinks they are not completely ridiculous.”

Those Olympics items range in price from just a few dollars to hundreds.  And they can be hard to find.  So far, they are only available at licensed shops and in official London 2012 stores, mainly at transport hubs. 

Other London 2012 officials like British Olympic gold medalist Jonathan Edwards, who is now a member of the Organizing Committee, believe the enthusiasm will build along with the sales of the souvenirs. 

“When you are involved within the Olympic and Paralympic world, it feels like that is everything," he said in a post-Committee meeting interview. " But for people out in the streets, it is kind of like, ‘Oh yeah, the Olympics, that is in the summer and I will, kind of, engage with it when it is actually here.’”

And the Olympics have had another event vying for attention.  These days, many people in Britain are more focused on celebrations marking 60 years of Queen Elizabeth’s reign, which culminate with a two-day holiday in early June.

The price tag of the Games also saps some people’s enthusiasm.  Estimates range from the official figure of about $20 billion up to $40 billion or more.

Pope's butler held in flap
over confidential papers

By the A.M. Costa Rica wire services

The Vatican confirmed Saturday that Pope Benedict XVI's butler has been arrested on suspicion of leaking confidential documents and letters from the pontiff's private quarters.

Vatican spokesman Federico Lombardi said Paolo Gabriele, 46, was arrested Wednesday after secret documents were found in his Vatican City home. Gabriele had been the pope's personal butler since 2006, one of the few members of the papal household, which includes a few nuns and secretaries.

The scandal, dubbed Vatileaks by the media, involves the leaking of a string of documents earlier this year to Italian media.  The documents allege corruption in Vatican finances and have centered on the activities of Cardinal and Vatican Secretary of State Tarcisio Bertone.

The pope has ordered several investigations into the leak, which took on greater weight several days ago with the publication of "His Holiness," a book written by Gianluigi Nuzzi that reproduced confidential letters and documents reportedly smuggled out by unnamed whistle blowers.

Astronaut says Dragon
smells like a new car

By the A.M. Costa Rica wire services

Less than 24 hours after the Dragon capsule docked with the International Space Station, astronauts opened the hatch and floated into the first private spacecraft to ever reach their orbiting outpost.

NASA astronaut Don Pettit said there was something familiar about the Dragon capsule, which was developed by the private company SpaceX.

"The smell inside smells like a brand new car," described Pettit, as he inspected the vehicle.

Pettit was among the astronauts who later spoke to reporters from inside the capsule.

"I'm very pleased," he said.  "It looks like it carries about as much cargo as I could put in my pick-up truck, and it's roomier than a Soyuz, so flying up in a human-rated Dragon is not going to be an issue."

SpaceX says it designed Dragon with crew-carrying capability in mind.  The California-based company is developing seating, a launch escape system and life support systems for the capsule.

SpaceX officials say they hope to send people into space aboard the Dragon spacecraft within three years.  The United States does not have a way to ferry astronauts to the space station since it retired its shuttle fleet last year, so NASA would like to rely on private companies to handle that task.

But for now, Dragon is a cargo ship.  It is carrying more than 500 kilograms of non-critical supplies on this mission, such as commemorative patches, clothing, meals and student experiments.  After astronauts unload the craft, they will fill it with used equipment to be returned to Earth May 31.  Only SpaceX's Dragon capsule and the Russian crew-carrying Soyuz craft can return items to our planet.   

The U.S. space agency has invested nearly $400 million in SpaceX's commercial cargo capabilities.

SpaceX made history when Dragon became the first commercial vehicle to dock with the International Space Station, a feat that had only been accomplished by the governments of Russia, the U.S., Europe and Japan.

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This serious Chevy is among those being auctioned.

U.S. Embassy auction
features used vehicles

By the A.M. Costa Rica staff

The U.S. Embassy is auctioning off 14 used vehicles, and the lot seems to include some in good repair and at least one clunker.

This is another one of those quiet auctions conducted though the firm Rematico, which has put photos and descriptions of the vehicles on its Web site.

The online bidding closes Tuesday morning. The auction firm says there are 15 vehicles, but only 14 are displayed on the site.

The vehicles were supposed to be on display Friday and Saturday near the embassy in Pavas.

The prices appear to be competitive, but there is a catch. Successful bidders on most of the vehicles will have to pay an import tax as if the vehicles just came off the boat. The Embassy did not pay this tax because of its diplomatic status.

Still, for most cars, the deal might be a good one. The embassy promises to obtain a vehicle inspection sticker for road-worthy sales. One exception is a 1996 Jeep Cherokee that is being offered only for parts. Biding started at 100,000 colons, about $200. Sunday night the highest bid was 210,000 colons or about $420.

A Toyota Prado with just 22,400 kilometers, about 14,000 miles, appears to be the pick of the liter, despite a bad battery. There were four bids by Sunday night with the top one being 5,450,000 colons or about $10,900. The auction house estimates that the holder of the winning bid will have to pay about 1,800,000 colons more in fees and taxes, some $3,600.

Rematico does not advertise the auctions widely, but the embassy has a short notice of the sale on its Facebook page. There have been 67 bids.

Only two of the 14 vehicles displayed on the Web site are diesel. The rest are powered by gasoline.

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