The San Cristobal Land Development Inc. has filed a criminal action against the Panamá News, its editor and a reporter who wrote an exposé of the company.

The criminal action seeks the investigation of the individuals and for the Technical Police to search the premises of the newspaper "in order to preventively seize the computers, fax, printing equipment and any other means used by the defendants to spread the false information against which the present  lawsuit is placed."

The action also seeks information on the residency status of the reporter and if he is registered as a newsman in Panamá.

The criminal action was filed by Carlos O. Córdoba, a lawyer, on behalf of the corporation and the legal representative, identified as Thomas Rowley. The action makes no mention of  J. Tom McMurrain, the founder of San Cristobal. The action also did not mention Ian Calvert Blaisdale, who was working as sales director of the firm until his capture in March by two unhappy investors in Blaisdale’s former Costa Rican investments.

The Panamá News, an English-language weekly, published the exposé of the firm where Blaisdale worked, San Cristobal, which sells land mostly to foreigners with the claim they can live there and grow teak trees and noni fruit for profit. The company has holdings in Bocas del Toro in Panama not far from the southeastern border of Costa Rica.

In addition to problems with land titles, the reporter said that teak trees grown in that rainy area do not produce good timber and that the noni,

The newspaper said the founder of San Cristobal, McMurrain, is a U.S. citizen who has promoted multilevel marketing projects in the past and attempted to found his own country in Panama..

The firm suggests that investors who put up from $80,000 to $120,000 can have land near a beach cleared and planted in teak and noni to begin earning a 10 to 30 percent return, plus get Panamanian residency in the process.

The reporter, Dutch journalist Okke Ornstein, said in an e-mail that "in Panama, retarded anti-press laws have a higher priority than laws against fraud, embezzlement, drug trafficking and corruption."

He said he, a colleague and a source received death threats about the story.

Said the criminal action: "Neither San Cristobal Land Development Inc. nor Thomas Rowley, to the best of their knowledge and consent have hired criminals, drug dealers, nor this company has ever being involved in illegal deals, as this country’s authorities may verify. Therefore this false information published is reckless and insulting."

As in Costa Rica, insult laws are criminal and not civil. The articles were published April 27 and May 11. Ornstein said he and the newspaper would aggressively fight the legal action. In his stories he said he had been supplied internal San Cristobal documents by a source.

Blaisdale was arrested in mid-March. In addition to possible charges in Costa Rica, he is sought in France to answer allegations there.

The United Concerned Citizens & Residents of Costa Rica are keeping the faith.

This is the group that thinks Luis Enrique Villalobos Camacho is the victim of a giant government conspiracy and that he will return to pay off all his creditors once he is absolved from "baseless accusations."

The informal group that is headed by John Manners will hold a "one year after" meeting Sunday, July 6, at the Hotel Aurola-Holiday Inn in downtown San José. 

This is the group that is collecting money to pay a three-part $300,000 legal fee for José Miguel Villalobos Umaña. The group already has raised $85,286.20 and has paid the lawyer $76,000 in legal fees to date, according to its Web site.

The 10 a.m. meeting marks the one-year anniversary last July 4 when investigators and prosecutors raided the offices of Ofinter S.A. and the informal borrowing operation run by the Villalobos Brothers in Mall San Pedro. 

On Oct. 14, the brothers closed both the Ofinter money exchange business and the offices of the borrowing operation that paid investors 3 percent. Oswaldo Villalobos now is in custody, and Enrique Villalobos is an international fugitive wanted on allegations of money laundering, fraud and banking law violations. The firm may have had $1 billion on its books in creditor money when it closed.

In announcing the meeting, Manners said:

"Some of you are starting to doubt that there can be light at the end of the tunnel.  Some of you are starting to compare the Villalobos Brothers to the other investment organizations that have gone sour.  Some of you think that you will never see your money again, no matter what happens. 

"Remember that all the other financial organizations collapsed because their owners lost the money or disappeared with the funds.  Luis Enrique Villalobos has always stated that he wants to come back, and is prevented from doing so by baseless accusations."

The speaker at the meeting July 6 will be José Miguel Villalobos, the lawyer, who will field creditor questions, said the announcement. Lawyer Villalobos has said that he can see no wrongdoing on the part of the Villalobos Brothers based on the case file, but he has lost the only two legal challenges he has mounted. Curiously, he sought to free Oswaldo Villalobos from custody with a habeas corpus motion that was rejected.

Lawyer Villalobos was hired by the group’s board of directors around Feb. 2. At the time he promised a criminal action against certain 

unnamed individuals in the Costa Rican government who were conspiring against the Villalobos Brothers. That action never was made.

The purpose of the meeting is to increase membership and also to raise more money, said Manners.

"We are keeping very careful records of every member's contribution and will provide this information to don Enrique when he returns," he said in the announcement.  "We are confident he will acknowledge your effort during these trying times."

The United Concerned Citizens & Residents is the same group that said it received a message from Luis Enrique Villalobos June 1. The message, released a few days later, repeated most of the defenses of the brothers and also said that agents who raided the Mall San Pedro office stole $250,000.

The Manners message also said that Lawyer Villalobos would soon embark on a public relations initiative, something that he promised to do last Feb. 2. However since then he announced he will run for president.

He is the former minister of Justicia in the Abel Pacheco regime. 

Poo gets more time
in Savings case

José Poo must spend three more months in jail, a judge has decided.

Poo is a former executive of the failed Savings Unlimited high-interest firm in San José. Poo underwent arrest Feb. 20 when he was expelled from Panamá. He had been tracked down there by unhappy creditors of the firm.

The Office of the Prosecutor for Delitos Económicos y Anticorrupción told the court that Poo was linked to the failed company that cost many foreigners a lot of money, said a report from the courts. Some $240 million may have been involved in the firm’s failure. Owner Louis Milanes closed his doors last Nov. 20. He still is a fugitive.

Drug agents arrested three persons in Dominical and said they ran a marijuana and cocaine operation geared to tourists.

The arrests took place in a house at Playa Hermosa, Dominical. Arrested was the presumed leader of the group who had the last names of Godínez Picado, said agents. He is 51. Also arrested was a 48-year-old woman with the last names of Mena Gamboa and a 20-year-old man with the names of Obando Vargas.

Agents from the Policía de Control de Drogas said they confiscated four ounces of marijuana and six hits of cocaine, scales and other utensils.

Three U.S. citizens
in immigration net

Three U.S. citizens were among eight persons arrested this weekend in Tamarindo for immigration violations. One of the U.S. citizens will be deported for having exhausted a tourist visa.

Two other U.S. citizens will have to present proof of their marriages to Costa Ricans, according to a release from the Ministerio de Gobernación, Policía y Seguridad Pública.

In all, 43 persons were detained over the weekend in immigration raids in that Pacific beach community and also in Limón, Puntarenas and San Carlos.

Marco Badilla, director general of Migración y Extranjería, said that 92 persons were checked in Tamarindo alone.

In Puntarenas 24 Nicaraguan citizens were detained, as were 10 Colombians who were the crew of the fishing boat ONIA that was boarded Thursday by the Costa Rican coast guard inside the country’s maritime zone of economic interest. 

In addition to immigration violations, the crewmen face charges of illegal fishing.

Colombian strategy
is now in writing

BOGOTA, Colombia — The government has unveiled its strategy for winning its struggle against rebels and drug lords. 

The 68-page document, the first detailed security plan published by the government of President Alvaro Uribe, lays out a "democratic security" plan to build up successful democratic institutions throughout the country. 

The six-point plan calls for a strengthening of the country's armed forces and justice system, consolidation of the national territory and protection of citizens and Colombia's infrastructure. The document emphasized that citizens must aid the authorities. 

Colombians have suffered nearly four decades of civil war, battling Marxist guerrillas, far-right paramilitary groups, and a powerful cocaine-dominated drug trade. Uribe entered office last August promising to get tough on the offenders. 

Human rights officials were skeptical of the new document, saying there is a gap between what is said and what is actually done. 

Two bounty hunters
facings jail terms

PUERTO VALLARTA, México — A judge has ordered three American bounty hunters to stand trial on criminal charges for capturing convicted rapist and Max Factor cosmetics heir Andrew Luster.

Judge Jose de Jesus Pineda ruled here Thursday in the case against Duane "Dog" Chapman, his brother Timothy and son Leland.  The judge said in his decision that they will be charged with illegal deprivation of liberty for seizing Luster.

The three men were arrested last week after capturing Luster in Puerto Vallarta. Bounty hunting is illegal in Mexico and the defendants could face four-year prison terms, if convicted. 

Luster disappeared in January on charges he drugged and raped three women at his Ventura County, Calif., home. He was convicted in absentia and sentenced to 124 years in prison.

Luster's lawyers have said he is innocent and that the sex - some of which was videotaped - was consensual. Luster is the great-grandson of Hollywood makeup legend Max Factor and has a personal fortune worth an estimated $30 million.

The demise of a handful of money-borrowing operations in San José raises the question whether some or all were involved in ponzi scams.

That is an investment fraud where old creditors are paid off with the money put in by new creditors. 

Many creditors of the Villalobos Brothers have said the operation could not possibly be a ponzi scheme because it lasted so long. Some creditors have claims that Luis Enrique Villalobos Camacho and his brother Oswaldo have been in business as long as 25 years.

Authorities have arrested Oswaldo Villalobos and the other brother is an international fugitive.

The two brothers never have fully explained what they did that enabled them to pay creditors 3 percent a month in interest.  Luis Enrique Villalobos at times said he was involved in factoring business accounts or was engaged in currency speculation. However, there is not hard evidence of either.

The question is vital to the estimated 6,500 creditors of the Villalobos Brothers because if the operation was a ponzi scheme, much of the money is gone, used to pay the interest in prior months.

Investigators said they are pursuing money laundering, fraud and financial intermediation allegations. The last charge means taking money from one person and lending it to another without being licensed properly.

The actual mathematics of the Villalobos operation is unknown, but it is known that a number of creditors rolled over their monthly interest payments to augment their principal amount with the two brothers.

All involved in the Villalobos affair agree that a ponzi scheme can last forever if every creditor rolls over his or her monthly payments. However, the math had not been fully explored.

A simple investment model developed by A.M. Costa Rica shows that a ponzi scheme could last 25 years or more with a 60 percent rollover of monthly interest.

For purposes of illustration, the mathematical model assumed an increase in creditor capital each month of 2 percent more than the month before. An interest rate of 3 percent compounded monthly was stipulated, and only 40 percent of the interest actually was paid to creditors each month. The rest remained in the scheme.

This theoretical model does not take into consideration fluctuations in investments or the 

In the second month, an initial amount of $1,000 deposited the month before would draw $30 in interest and $18 (60 percent) would be rolled over. An additional $1,020 would be added from outside creditor funds, giving the financial operation a gross value of $2,008. But already the operation would be in the red $12, the amount paid in cash as interest.

By the 60th month, the operation would have $85,193 deposited and pay $2,556 in interest, but $1,533 would be rolled over. There would be additional deposits by creditors of $3,217.

By the end of 10 years, in the 120th month, the operation would still be relatively modest with total creditor deposits being $322,386 on which $9,672 in monthly interest would be paid. But $5,803 of that amount would be rolled over. Creditors would deposit an additional $10,544.

The operation would not crack the $1 million level until the 176th month or nearly 15 years into business. By then creditors would be getting about $30,000 a month in interest. But they would be rolling over about $17,500.

In the 240th month, or after 20 years of operation, the theoretical ponzi scheme would have $3,548,767 in creditor money and be paying $106,463 a month in interest. Of that, some $63,878 would be rolled over.

By the 25th year, The theoretical operation would have $11,648,496 in investor funds on the books. It would pay $349,455 in interest that month, and $209,672.93 of that would be rolled over. An additional $372,779 in creditor deposits would be posted.

And the hypothetical operation would have $11.9 million in cash.

The problem is that creditors would have deposited about $19 million in the operation. So the scheme would be about $7 million in the red.

A total of $17.7 million in interest would have been paid over the 25 years life of the scheme, but $10.6 million would have been rolled over. Because monthly deposits of new money exceeded the cash interest paid in every month, the scheme could have many more years of life. That is, unless the theoretical operator of the scheme decided to take the nearly $12 million and leave town.

From the mathematics involved, done on a spreadsheet, the fact is clear that the ponzi scheme could survive with fewer deposits and a higher percentage of cash payments of interest each month. However, a precipitous drop in creditor deposits would imperil the structure.

The U.S. Federal Bureau of Investigation said that a leader of a group of con men used religion and philanthropic promises to obtain investments from people who have made their money through traditional blue-collar businesses.

The leader is John Franklin Harrell, 69, who lives in a suburb of San Diego, Calif. Agents in San Diego, Las Vegas, and Dallas executed eight arrest warrants and 18 search warrants in those cities in March to dismantle the cult-like investment fraud and money laundering criminal enterprise which has been operating for years, said the FBI.

Harrell claimed to have access to an offshore trust created by the descendants of Joseph Smith, the founder of the Mormon Church, worth $1.6 trillion. However, he needed investment capital to create an insurance company to access the money, he told his victims, according to the FBI. He promised a 100 percent return for 99 years, agents said.

Harrell would frequently hold "prayer meetings" in a conference room at a high-end apartment complex in the Mission Valley area of San Diego, during which he would also espouse anti-government rhetoric and advance conspiracy theories, said the FBI. Harrell has been described as being extremely charismatic.

FBI spokeswoman Jan Caldwell said "At these meetings, he would have people hold hands, pray and hug each other. He used every type of religious reference to create a 'family.' He told the investors/associates that they were expected to invest their money and expected to believe in him. At times, he was treated almost as a deity." 

Ms. Caldwell said that Harrell has no connection with the Church of Jesus Christ of Latter-day Saints, the Mormons.

A new official has been named to head the Oficina de Atención a la Victima del Delito or victim’s assistance office in the Costa Rican judicial system.

The new coordinator is Andrea Murillo Fallas. She replaces Jeannette Arias, who has returned to the University of Costa Rica for advanced study in the law.

Many North Americans have come in contact with this office due to the collapse of the Villalobos Brothers and Savings Unlimited operations.

As is Ms. Arias, Ms. Murillo is a fluent English speaker. She studied in England and has been on the job for about two months.

But Ms. Murillo warns that her office does not keep track of day-to-day developments in cases. The office has helped victims of investment scandals to locate the correct departments and obtain information on the proper procedures to file complaints.

The office also has a new e-mail address: victimadelito@poder-judicial.go.cr. The telephone number is (506) 295-3565.