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(506) 223-1327                Published Tuesday, June 12, 2007, in Vol. 7, No. 115                   E-mail us   
Jo Stuart
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Case against Oswaldo appears stronger in writing
By the A.M. Costa Rica staff

The prosecutor's case against Oswaldo Villalobos Camacho looks a lot stronger when summarized on paper than in the disconnected bits and pieces presented by a string of witnesses in court.

A.M. Costa Rica received 473 pages of the final decision of the three-judge panel that found Villalobos guilty of two of three charges May 17. The document was supposed to be available Friday but problems with the Poder Judicial computer network delayed delivery until Monday.

The case for the prosecution is laid out in great detail, but the document also contains a verbatim account of the statement Villalobos made to the court at the end of the trial when he denied that he was involved in a Ponzi scheme.

The judicial panel announced May 16 that Villalobos was convicted of aggravated fraud with the motive of illegal financial intermediation. They sentenced him to 18 years. The panel remanded Villalobos to jail while an appeal is filed and heard.

There is little earthshaking in the document released Monday. Much was reported during the trial. The written allegations simply repeat the prosecution thesis that the Ofinter S.A. money exchange house merely served as a facade for the business of the two brothers to receive investments from the public.

The brothers had an integrated operation, and Ofinter S.A., which was authorized as a money exchange house conducted unauthorized financial maneuvers for the purpose of hiding the origin of money that originally was paid to Luis Enrique Villalobos, said the document.

The brothers maintained that the money exchange house was a separate business operated by Oswaldo Villalobos and not to be confused with the high-interest borrowing operation run by Luis Enrique Villalobos.

The names and amounts invested by those creditors involved in the case take up many pages. The principal amounts that these people lost when the Villalobos firm went under Oct. 14, 2002, was $76.5 million, according to the document. Of the more than 6,000 investment accounts only about 100 persons followed through with judicial complaints.

Ample space is given to the many Villalobos corporations, listings of money that passed through them to local banks, banks in the United States and a bank in Spain.

A new revelation was that a Canadian court declared March 3, 2003, that the money drug smugglers from that country had with the Villalobos operation was the product of crime. Nevertheless, the three-judge panel here did not convict Oswaldo Villalobos on money laundering charges.

The document shows that Bertrand St. Onge and his wife, Sandra, had multiple accounts there starting in 1999.  Richard Rivers had an account containing $73,000, and Norman Denault had $10,000 there, said the document. St. Onge died a
natural death, but his wife and the other men were targets of a Royal Canadian Mounted Police drug investigation. They wre convicted or pleaded guilty, and the document here said that Mrs. St. Onge also affirmed in court that the money stashed here was the product of a crime.

The Canadian investigation triggered the July 4, 2002, raid on the Ofinter offices, including the Mall San Pedro location adjacent to which Luis Enrique Villalobos ran his borrowing operation, which also was raided.

The clear statement that drug smugglers used the Villalobos firm to hide money raises the possiblity that a Sala III appeal by either the defense or the prosecution might result in the third charge, money laundering, being reinstated. This could jeopardize the money awards made to the former creditors who pressed their case. Any frozen funds would go to fight drug crimes if money landering were proved, under the law.

Observers generaly thought that Walter Espinoza, the prosecutor, did not push strongly for a money laundering conviction. The printed document shows that he did.

Espinoza and his staff also cited the case of Alvin Erwin Moss, a U.S. fugitive who put money with the Villalobos operation in 2000. Moss of Escazú eventually was deported back to face fraud charges involving a $100 million scam. Sala III magistrates probably will consider this case, too.

The document restates the opinion that the Villalobos enterprize took in $404.1 million from investors between 1996 and 2002. This total may not be complete.

The document, which is in Spanish, would make good reading for those investors who still support Luis Enrique Villalobos, even though he is a fugitive. They expect him to return and pay them what he owes them.

However, the document describes in detail how money was taken from investors and deposited in accounts where the interest income was not
sufficient to pay the 3 percent a month provided by the Villalobos operation. Prosecutors say this is clear evidence of a Ponzi scheme in which investors are paid interest from money provided by newcomers.

Anonymous individuals who claim a relationship with Luis Enrique Villalobos are continuing to play with the minds of victims of the scam. First a massive telephone, e-mail and Internet effort was launched to have victims withdraw their criminal complaints. Now the same faceless individuals are floating the rumor that the Villalobos operation will be opening up in Panamá and have constructed a Web site so creditors can sign up.

Because Villalobos is an international fugitive, his appearance in Panamá certainly would result in an arrest. The Villalobos faithful have been repeated victims of small-scale scams since the operation closed down, including from one man who claimed he had Luis Enrique confined to a wooden box, alternately on the high seas or in his car trunk. People gave him money.

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San José, Costa Rica, Tuesday, June 12, 2007, Vol. 7, No. 115

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Immigration director slapped
for his stand on spousal visas

By the A.M. Costa Rica staff

The Sala IV constitutional court has criticized the director general of Migración y Extranjería for his hard-nosed approach to awarding visas to foreigners who say they are married to Costa Ricans.

The director is Mario Zamora. He has repeatedly lost cases in the Sala IV when foreigners appealed his decision not to grant a visa. The use of fake marriages to obtain visas for foreigners is a well-known scam, but not all foreigners are faking their marriage.

The Sala IV said that Zamora was violating the rights of immigrants. The judicial slap was contained in a statement distributed by the Poder Judicial press office Monday afternoon,

There have been many cases that the court has had to restore fundamental rights after Zamora has denied a visa, the court said. The latest case and many of the previous cases involved spouses seeking to come to Costa Rica from Cuba.

Free trade opponents
to carry case to Sala IV

By the A.M. Costa Rica staff

Opponents of the free trade treaty with the United States say they will gather Thursday in front of the Sala IV constitutional court building at 10 a.m. and then carry their protest to the Asamblea Legislativa.

The sponsors say that the treaty not only contradicts certain articles in the Costa Rican constitution but also is contrary to the spirit and values of the nation.

The Sala IV has until mid-July to consider two claims that the treaty violates the Costa Rican Constitution. The demonstrators said they would accompany the magistrates in their protection of the constitution.

New school in Guanacaste
delays opening to February

By the A.M. Costa Rica staff

The proposed Pinilla Academy in Guanacaste will not open in September, a release from the board of directors said Monday. Instead the opening will be in February, it said.

The school's physical plant is under construction, and Bill Nevins, board president, said that a teacher has been hired to oversee construction temporarily. The school will accommodate kindergarten to grade three when it opens, according to current plans. Tuition will be $3,000 a year for kindergarten and $4,500 a year for higher grades.

Another reason that opening is being delayed is because the  Costa Rican Ministry of Public Education has not yet given full approval, the release said.

Our reader's opinion

Escazú reader fed up
with greed, selfishness

Dear A.M. Costa Rica:

I am outraged and greatly saddened by the way the Costa Rican government treated Taiwan after all that they have given to this society of greedy ingrates. This country would be little more than a pothole on the road of drug traffickers without the friendship and support of The U.S.A., E.U. and countries like Taiwan. “Little Switzerland?” More likely “Little Nicaragua” without foreign aid! 

For Arias to call Taiwan "cheap" after all they have given Costa Rica is absurd and irresponsible. Is it only me, or did you notice they waited until after they recently got their $2 million in new cars and trucks, the only decent vehicles in their rotting and decrepit fleet?

The Costa Rican government has no conscience, no gratitude, and no respect.

If it is possible, I am even more disheartened with the Costa Rican culture because I used to rationalize the extreme dishonesty, greed, selfishness and lack of commitment to anything more than the next Bigger Better Deal as a class problem, but now I see it blatantly flaunted at the highest levels of society of which “normal people” like you and I will never be allowed to glimpse or participate in.

I have to run now. They just did the only thing that they do efficiently in this country, cut off my water. Of course it doesn’t matter that they never delivered a bill. Pura vida. After 7 years of frustration here it’s Hasta La Vista Baby for me.

Mark Taylor

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San José, Costa Rica, Tuesday, June 12, 2007, Vol. 7, No. 115

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Puerto Limon Agency

Officials promise that San Carlos highway will be built
By the A.M. Costa Rica staff

Despite the rupture in diplomatic relations between Costa Rican and Taiwan, work on the San Carlos highway continues.

A spokesman for RSEA Engineering Corp. which is doing the job pointed out to a reporter that the Taiwanese firm has a contract to do the job.

The cost of the job is $70 million. Of that $15 million was to be a donation from Taiwan and $35 million was to be a loan sponsored by the government of Taiwan. Some $20 million is coming from Costa Rica government funds.

The project calls for two new highway lanes from Sifón de San Ramón to La Abundancia de San Carlos, a 30-km. stretch, some 19 miles. The project requires 10 bridges constructed over as many rivers.
Construction began Oct. 24, 2005, and much of the dirt road bed has been graded, although Costa Rican officials are talking about some changes to avoid environmentally sensitive areas.

Costa Rican officials were insistent Monday that the job would be done, but they agree that other funds must be found. Rodrigo Arias Sánchez, the president's brother and minister of the Presidencia, will meet today on the topic.

A release from the Ministerio de Obras Públicas y Transportes said Monday that the country may seek money from the Central American Bank of Economic Integration, which already has pledged $170 million for general improvements.

Costa Rican officials hope that the money they lost when Taiwan was sent packing might be covered by the new diplomatic ally, Red China.

Insects were in bottles, wrapped in paper and even held between pieces of fabric.
bugs at airport
Ministerio de Gobernación, Policía y Seguridad Pública photo

Big collection of bugs shows up in luggage of travelers
By the A.M. Costa Rica staff

Five German nationals on the way to Spain didn't make it through a Costa Rican inspection with their locally collected insect collection.

Officials at Juan Santamaría airport said they found hundreds of critters hidden in the luggage of the tourists. They assumed that the various dead creatures had been collected in various sections of the country.

Under Costa Rican law, an insect cannot be taken out of
 the country without a permit from the Ministerio de Ambiente y Energía. Lack of a permit can generate a fine of $50 per critter.

The creatures in the suitcases were spiders, bees, ants and beatles, officials said. All appeared to be dead. Some were in bottles. Others were wrapped in paper.

Others were enclosed in pieces of fabric.

Officials believe the travelers were headed to Germany by way of Spain.

Health officials zero in on tires to reduce incidents of dengue in country
By José Pablo Ramírez Vindas
of the A.M. Costa Rica staff

Old tires, places much loved by dengue-carrying mosquitoes, will be closely tracked by the Ministerio de Salud, the agency said.

A May 15 decree puts the burden on collecting old tires on the importer, producer or the  firm at the final point of sale. The idea is to have tire stores collect the old tires when new tires are sold.

The tire company and whoever hauls away and disposes of the tires must now have health ministry approval and permits, according to the decree.

The new procedure will generate paperwork. Tire stores have to make note of the plate number of the car getting new tires and the way in which the old tires will be disposed.
The procedure was approved by Bridgestone Firestone Costa Rica and the Asociación de Comercializadores de Llantas.

Costa Rica generates some 800,000 used tires a year, according to a recent study. The new decree also requires municipalities to collect old tires as part of regular trash pickups.

The ministry said it hopes that old tires will be used to generate electricity, be turned into asphalt pavement, be used to create artificial reefs or in anyway be transformed so that mosquitoes cannot lay eggs in water held within.

Tire vendors have until Nov. 15 to present a plan for handling the old tires, the ministry said.

Dengue is in the news because cases of the mosquito-born disease are double this year than last. The disease is prevalent on both coasts with nearly 5,000 cases this year.

You need to see Costa Rican tourism information HERE!

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San José, Costa Rica, Tuesday, June 12, 2007, Vol. 7, No. 115

Interest rate rise in U.S. causes concern in housing market
By the A.M. Costa Rica wire services

Longer-term interest rates have risen sharply in the United States this past week and that has raised concerns about the health of the already depressed housing sector.

The situation is relevant in Costa Rica because much of the investment being made here has its roots in the U.S. realty market.

Central bank officials said Monday that the weak housing market could shave about 1 percent off U.S. economic growth this year. That is a substantial hit to an economy that in the first quarter registered an annualized growth rate of an anemic 0.6 percent.

The Federal Reserve had steadily raised short-term interest rates from 2004 to 2006, making 17 quarter point adjustments that brought the overnight lending rate from 1 percent to the current 5.25 percent.

But while short-term rates rose, longer-term rates held steady. That may now be changing as the interest rate on a 10-year government bond has risen in recent days by nearly one half percent to over 5 percent. Bond market expert Bill Gross of Pimco Investments says higher bond prices mean higher mortgage interest rates for home buyers.

"The 30-year mortgage rate is drifting towards seven percent," said Gross. "Seven percent is a big number for people who are either refinancing or buying a home. And it
is certainly nothing like what we have experienced two or three years ago, which led to the housing boom. So now we're having a housing bust."

Gross spoke on Bloomberg Television.

Housing sales are down and new home construction has slowed dramatically. The home prices that on average rose by over 50 percent in the past five years have begun to decline.

Raymond Remy, a bond trader at Daiwa Securities in New York, says if investors become fearful that the housing downturn could trigger an overall economic decline, the Federal Reserve will have to cut interest rates.

"The housing market is like the flavor of the day," said Remy. "Two weeks ago, three weeks ago, everybody wanted to talk about housing. And now it is on the back burner. But certainly housing is such a big part of the economy that if it really melts down we're going to have a problem and the Fed will have to ease."

It is not only the prospect of higher mortgage interest rates that worries the investment community. If bond yields continue to rise, fixed income investments (bonds) may become an attractive option to stocks that are beginning to look overvalued.

In many markets stock prices have risen by 10 percent in just the first five months of this year.

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San José, Costa Rica, Tuesday, June 12, 2007, Vol. 7, No. 115

Costa Rica manages to snag a quarterfinals Gold Cup spot
By the A.M. Costa Rica staff

Costa Rica surprised Guadeloupe Monday night and gained a quarterfinals berth in the 2007 Gold Cup tournament.

The situation was come from behind all the way. Costa Rica dropped the opening match against Canada and then tied with Haiti Saturday night. Guadeloupe, which at one time led the Group A teams, also wracked up four points but is in third instead of second place because it lost a headon match with Costa Rica.

Guadeloupe can still get a quarterfinal spot depending on results from groups B and C, based on the scoring system. .
In other action at the Orange Bowl, Canada beat Haiti 2-0. Canada is in first place with six points.

The Costa Rican match was a rough one with seven yellow cards issued, five to the Ticos. They were anxious for their first Gold Cup win.

The winning shot by Walter Centeno came on a penalty kick in front of the net. The ball grazed the right hand of Guadeloupe goaltender.

Centeno is tied for high scorer in the tournament with three goals. The event is put on by the Confederation of North, Central American and Caribbean Association Football. 

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