An audit report of the Villalobos operation says that the high-interest investment operation was closely linked to the Ofinter S.A., money exchange business.

The report also says that Oswaldo Villalobos, the brother who has been in custody, was a key player in the high-interest business.

Luis Enrique Villalobos Camacho, the man who was presumed to run the high-interest operation, has told A.M. Costa Rica that the two businesses were completely separate.

However, the audit report details a number of transactions between the two businesses. Both shared office space in Mall San Pedro, although Ofinter had money exchange offices elsewhere in the Central Valley.

The report also said that Oswaldo Villalobos was the legal representative of Servicios de Soporte al Turismo S.A. That is a key company in the high-interest loan business, a firm to which some North American investors paid to open high-interest accounts at the Whitney National Bank in New Orleans, La.

The audit report also said that the close ties between the two operations permitted executives there to hide the origin and the flow of money. The report details transfers, in one case as much as $2.6 million.

The report also said that the money exchange operation registered a financial loss in January 2002 of $126,000 because it did not collect commissions on sales of dollars to firms connected with the two brothers.

The audit report, of some 100 pages, was obtained by Jack Caine of the Class Action Center, a group of Villalobos investors. He posted the final summary pages to his Web site. 

The report was prepared by the Sección Delitos Economicos y Financieros of the Judicial Investigating Organization. The report does not 

The report also said that Luis Enrique Villalobos, his wife, Dana Paula Dinculescu, Oswaldo Villalobos and office manager David Mathieson were the only persons allowed to accept new customers without a recommendation. All investors in the high-interest operation had to be referred by an existing customer, supporters of Villalobos have said. The audit report comment suggests that this was not always the case, at least as far as certain customers were concerned.

In addition to Mathieson, the report lists two apparent North Americans who worked at the operation: Preston Power and Patrick Oehen. There also is a full list of some 16 other employees.

The summary of the report makes no mention of how the Villalobos brothers might have used the investor money to generate the 3 percent returns that they paid each month.

A report from the Superintendencia de Entidades Financieras became public last November and cheered investors when it said that Ofinter has not violated any laws or rules as an exchange house. The audit report now makes it clear that Ofinter was involved in activities more than just simply exchanging money, the task for which it was licensed.

Meanwhile, Luis Enrique Villalobos continues to be a fugitive. He vanished Last October after he closed his high-interest office in the Mall San Pedro. Ofinter, which occupied the more visible area facing the pedestrian corridor, closed at the same time. He stopped paying investors their high interest in September. 

There may be as much as $1 billion in investor money on his books.

Oswaldo Villalobos just was hit with additional months of preventative detention. He first was detained in November after his brother had fled. However, he is actually in a private clinic.

The Sala IV court Wednesday rejected a claim of unconstitutionality that has prevented the deportation of illegal aliens for several months.

The constitutional court found without standing a challenge to the immigration laws. The court told the Dirección de Migración y Extranjería to delay any deportations at the time the brief was filed.

The decision came in an e-mail announcement from court personnel Thursday.

The challenge had been made by Miriam Chehade Larch, public defender.

Specifically, the court decision was to uphold a 

The effect of the original Sala IV order was to empty the jail cells that contained illegal aliens and set them free again on the street. 

Many illegal aliens have been picked up in the sweeps that police have been doing in the downtown and at beach communities. The proposed revisions of the immigration law that now is being considered in the Asamblea Nacional would remove any doubt about the legitimacy of the immigration police as a duly constituted official body.

CARACAS, Venezuela — The government and the political opposition have signed an agreement to produce an electoral solution to the country's 18-month political crisis. But many in the opposition have serious reservations with the effectiveness of the agreement that was mediated by international facilitators led by Cesar Gaviria, secretary-general of the Organization of American States:

It took six months of arduous negotiations to produce the agreement, which, in essence, does little more than to restate the provisions of the 1999 constitution. This allows for a recall referendum after the halfway point of the presidential term. 

The opposition umbrella group, known as the Democratic Coordinator, has long insisted the country could not endure the controversial leadership of populist President Hugo Chavez until August this year, when his current six-year term reaches the three-year mark.

They accuse the president, among other things, of seeking to impose an authoritarian regime, of repeatedly violating the constitution and of destroying the economy. 

Despite staging a devastating, two-month-long strike and business stoppage, which paralyzed the country's vital oil industry, in a bid to force the president to resign or hold an early vote, the opposition was eventually forced to give in. 

The economy shrank by almost 30 percent in the first quarter of this year, but Chavez's support has held steady at more than 35 percent and no single opposition leader has emerged to challenge him.

Polls suggest the president would lose a recall referendum. But many obstacles still remain before such a vote can be held. 

The two sides have not been able to agree on the appointment of a new electoral authority; the opposition will probably have to gather once again the almost 2.5 million signatures it needs before a referendum can be called and the agreement does not specify a date by which it must be held.

By signing the agreement, the government is, in the eyes of the international community, committing itself to the referendum solution. But Vice President Jose Vicente Rangel, head of the government negotiating team, pointed out that the agreement and the referendum were separate, and that the latter would only go ahead if the opposition could meet all the constitutional requirements.

The other major concern of many in the opposition is that, now that the negotiations are over and Cesar Gaviria is leaving, the ability or willingness of the international community to supervise the agreement may be limited. 

The accord provides for his team to return as and when required, but it is no secret that the government is happy to see the end of the permanent presence of the facilitators, especially now that it feels that it has defeated opposition attempts to force the president's resignation.

It will be months before it is possible to judge the success or failure of the process which culminated with the agreement. And no one expects the period from now to the referendum, if it should take place, to be anything but turbulent. 

Argentine’s leader
shakes up military

BUENOS AIRES, Argentina — New President Nestor Kirchner has reshuffled the military, in what could lead to one of the biggest shake-ups in the armed forces since the end of military rule in 1983.

President Kirchner announced the restructuring Wednesday as one of his first acts since taking office on Sunday. 

The president named a friend, Gen. Roberto Bendini, as the new army chief of staff. Bendini previously served in the president's home province of Santa Cruz and will replace Gen. Ricardo Brinzoni.

News reports also say Brig. Gen. Carlos Rohde will take over as head of the air force next month, while Rear Adm. Jorge Godoy will be in charge of the navy.

Analysts say Kirchner wants to bring in younger military officers with less influence in civilian politics. Argentina has had a history of frequent military coups. During a 1976 to 1983 military dictatorship, thousands of leftist dissidents disappeared and are presumed to have been murdered. 

WASHINGTON, D.C. — Enactment of a free-trade agreement between the United States and five Central American nations will benefit both regions of the Western Hemisphere, said Adolfo Franco, assistant administrator for Latin America and the Caribbean at the U.S. Agency for International Development.

In remarks Thursday, Franco said the trade agreement will build on progress Central America has made over the past several decades in overcoming a series of natural disasters, economic degradation, and military conflicts.

 Franco said the Central America Free Trade Agreement covering Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua is a "win-win" proposition for the United States and Central America that will encourage increased mutual trade.

"We want people [in Central America] to buy American goods, and we want them to export" their goods as well to the United States, said Franco at a forum called "From [Hurricane] Mitch to CAFTA." He added that the U.S. national interest benefits from growing economies, stability, rising incomes, and a higher quality of life in Central America.

 Franco said President Bush wants not only a "safer world, but a better world," adding: "That's our vision, and we're committed to doing everything we can at USAID" to accomplish this.

The official pointed to his agency’s new brochure titled "Mission Accomplished," which outlines the U.S. government's $1-billion hurricane relief and reconstruction program in Central America and the Caribbean. Franco said the two hurricanes — Mitch and Georges — that struck those regions in 1998 left 19,000 people dead or missing, three million people displaced, and caused $8.5 billion in damage.

"The destruction of crops, homes, and infrastructure was unprecedented -- and could have easily have undone many decades of progress" in Central America, said Franco.

In response to those natural disasters, the U.S. government provided nearly $300 million of emergency assistance, such as food, helicopter transport, blankets, plastic sheeting, medicine, and safe drinking water. Other U.S. funds were used for long-term reconstruction efforts to restore roads and bridges, to prevent the spread of major diseases such as cholera, for disaster mitigation such as stabilizing watersheds and preventing soil erosion, and to upgrade housing for the local population.

In 2002, Franco noted, his agency began a new initiative called the Opportunity Alliance for Central America, which he said augments existing regional and bilateral programs to build trade capacity among the Central American countries and to help them prepare for free trade. That alliance, he explained, also supports public and 

For example, his agency launched an $8-million program under the Opportunity Alliance to assist Central American small and medium coffee producers in improving coffee quality, in forming new business linkages, in securing longer-term contracts with the specialty coffee industry, and in identifying and implementing diversification options for producers who cannot compete on the global market.

"With all candor, I think Central America has endured in the last 25 years many more challenges than any other place in Latin America," Franco said. But he added that Central Americans have "risen to the occasion, and we're here to celebrate."

And "simultaneously to our reconstruction effort, we're looking ahead [at] what we need to do to make sure that CAFTA represents the best opportunity for Central Americans to take full advantage" of that trade agreement, he said.

Enactment of the free trade treaty, Franco said, will give Central America the potential to find new trade markets in the United States and elsewhere around the world.

Another speaker, Regina Vargo, assistant U.S. trade representative for the Americas, said that what has happened in Central America represents "a very impressive story of overcoming great adversity and rebuilding," and is also a "sobering" reminder of the economic problems that continue to challenge the people of that region.

The U.S. approach to helping smaller developing economies is a combination of trade liberalization and economic aid, said Ms. Vargo. She said the United States has raised trade capacity-building to a central position, giving it "high-level attention" alongside the ongoing negotiations for the free trade treaty

The trade treaty, when finalized, will provide "new benefits" to Central Americans and to the United States, said Ms. Vargo. She said the United States already exports about $10 billion in goods and services annually to the five Central American nations, about what the United States exports to Russia, India, and Indonesia combined, while importing about $11 billion in goods and services from Central America.

The treaty will elevate the five Central American nations to full trading partners with the United States, granting permanent duty-free benefits for the region's exports there, Ms. Vargo said.

Most significantly, Ms. Vargo added, CAFTA will further "accelerate the regional integration effort" Central America has already begun, "erasing many of the inefficiencies that currently plague trade." 

In combination with commitments on labor rights and protecting the environment, CAFTA will make Central America a "more attractive place for investment and lead to faster economic growth," she said.

WASHINGTON, D.C. — The U.S. Department of State has released a report calling on countries to marshal their resources to interdict and punish the perpetrators of sex trafficking and to protect and restore its victims.

The report, released Thursday in partnership with the non-governmental War on Trafficking Alliance, is the product of an international conference hosted by Secretary of State Colin Powell in February. The purpose of the conference, which drew participants from more than 100 countries and from all walks of life, was to find new ways to take action against the growing international crime of sex trafficking, which enslaves up to four million people each year.

The conference report includes dozens of recommendations related to the protection of 

The report calls on local and national governments to pass comprehensive national anti-trafficking laws that prosecute traffickers and provide for the safety and privacy of the victims, proper representation in court, access to medical care, social assistance, compensation for damages and the right to seek and receive residency.

On June 11, the United States will issue its annual report on international compliance with the Victims of Violence and Trafficking Protection Act of 2000, which will result in sanctions against offending nations.

The full text of the conference report just released by the State Department can be found at the following Web site: