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(506) 223-1327          Published on Thursday, Nov. 16, 2006, in Vol. 6, No. 228        E-mail us    
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New York's rings bets were handled here, DA says
Local Web hosting firm figures in big bookie bust

By the A.M. Costa Rica staff

An anti-gambling prosecutor in New York has gained a criminal indictment against a Costa Rica Web hosting firm as part of a $3 billion bookmaking sweep.

The company is Digital Solutions S.A. of Sabana Sur, and it is one of three corporate defendants in an indictment made public Wednesday in Queens, New York. Also indicted were 27 individuals who are accused of running a gambling ring in the United States.

Queens District Attorney Richard A. Brown said this is the first time that a web designer and an offshore based Internet company have been charged with directly participating in a criminal enterprise. The bookmaking ring accepted more than $3.3 billion in wagers over a 28-month period on a wide variety of sporting events, Brown said.

Digital Solutions is listed as being on the Fifth Floor of the La Colmena building  five blocks west of the Contraloria de la República in Sabana Sur. The company provides software to the gambling industry and also provides Web hosting services. A previous address was in Office Centro La Sabana. The firm on its Web site says it was founded in 1997.

The 33-count indictment filed in Queens County Supreme Court charges that the gambling ring promoted illegal sports betting in Queens County and elsewhere and that the defendants were involved with gambling wire rooms in both Miami and overseas. Some 20 of the defendants are also being sued civilly and have been named as respondents in a historic $500 million civil forfeiture action filed in Queens Supreme Court by the District Attorney’s Special Proceedings Bureau, which alleges that they engaged in a criminal enterprise that promoted illegal gambling activities and generated illegal wages.

Digital Solutions S.A., doing business as D.S. Networks, S.A., Inc. also is among the civil defendants.

The firm used the Web site Playwithal.com, which was accessible both online and via an “800” toll-free telephone number. Although the Web site was maintained in Tampa, Florida, its web servers and wire room terminal were situated outside the United States — on St. Maarten in the Caribbean or, more recently, in Costa Rica, the District Attorney's Office said. The Web site no longer is active.

Brown, the district attorney, has made arrests of gamblers with Costa Rican connections in the past. And the U.S. federal government has arrested a Costa Rican sportsbook executive who happened to pass through the United States. However, this is the first time the technical infrastructure of a gambling operation figured in an indictment.

From the indictment it appears that all bets originated in the United States.

“The defendants are accused of running a tightly knit and an incredibly lucrative – and illegal – global gambling operation, " said the district attorney. "It is alleged that they were as savvy and adept in the use of computer technology as they were proficient in the art of secreting and laundering untold millions of dollars in unlawfully earned proceeds through casinos, shell corporations and bank accounts in a variety of locations around the globe, including Central America, the Caribbean, Switzerland, Hong Kong and elsewhere. So massive was the enterprise that only with the assistance of federal law enforcement, police authorities in sister states and other nations have we been able to bring these defendants to justice.”

District Attorney Brown said that the investigation leading to Wednesday's indictment began in July 2004 when New York Police Department officers assigned to the Queens Major Case Squad and the Queens Narcotics District developed information about an illegal betting ring and began a joint investigation with the District Attorney’s Organized Crime and Rackets Bureau. The investigation included physical surveillance, intelligence information and court-authorized electronic eavesdropping on nearly 30 different telephones and intercepted tens of thousands of conversations. According to the indictment, detectives were able to crack the passwords of key individuals in the gambling ring and follow their day-to-day activities online.

Queens District Attorney's Office photo
District Attorney Richard A. Brown and Police Commissioner Raymond W. Kelly view seized items, including  an autographed Ted Williams baseball bat and two footballs signed by Joe Namath and 1969 New York Jets following victory at Super Bowl III.

The indictment alleges that the ring used a non-traditional wire room in the form of the offshore, Internet-based gambling service used by bettors and runners to actually place their wagers.

It is alleged that the ring used the offshore wire room to maintain the gambling accounts of numerous runners and bettors through the Internet Web site in an effort to evade law enforcement detection.

Law enforcement crackdowns on traditional mob-run wire rooms have led to the use by illegal gambling rings of off-shore gambling Web sites where action is available around the clock, said officials. Bettors could click on an offshore gambling Web site over the Internet and be assigned individual login codes and passwords.  Their wagers and win-loss amounts are recorded in sub-accounts maintained in the accounts of runners and agents. These gambling Web sites typically store their information on computer servers outside the United States — such as in Costa Rica — and “bounce” their data through a series of server nodes in an effort to evade law enforcement, said the District Attorney's Office.

In carrying out the alleged conspiracy, it is charged that Primary Development, Inc., and its chief  executive officer, Maurice Freeman, developed the sports betting Web site www.playwithal.com  specifically tailored to meet the needs of James W. Giordano and his son-in-law, Daniel B. Clarin. The  Web site — which is literally a computerized betting sheet —is known as “Playwithal Sportsbook.”

In furtherance of the alleged conspiracy, Prolexic Technologies, Inc., allegedly provided security of  Playwithal’s Web servers by screening bettors’ Internet protocol addresses to search for viruses or tracking programs that could be used to hack into Playwithal’s servers. Digital Solutions lists Prolexic as a partner. Prolexic has programs to keep hackers out of computer systems.

The indictment charges that Giordano was the bookmaker and boss of the enterprise who controlled and oversaw the entire operation. The indictment further charges that Clarin worked as the controller and was responsible for managing the day-to-day operations and handling bettor disputes and  accounting discrepancies, as well as managing account information of the various runners and bettors.

In addition to the criminal charges, a number of search warrants were executed which resulted in the seizure of gambling records, computers and hundreds of millions of dollars in real and personal property, including four Manhattan condos, millions of dollars in cash, tens of thousands of dollars worth of casino chips from the Bellagio in Las Vegas, Nevada,, a rare art collection, jewelry, gold coins, and a football signed by the 1969 championship New York Jets following their victory in Super Bowl III.

The individual ownership of Digital Solutions could not be determined Wednesday night. However, it is  among a number of firms here that provide Internet server and wireroom services to bookmakers elsewhere. They have advertised their services in English-language print newspapers.

Still uncertain is what the Queens District Attorney's Office can do to serve the indictment here because gambling is not a crime in Costa Rica. However, the U.S. government and state officials such as Brown consider that taking a bet from the United States is a crime even if the bookmaker is offshore.

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San José, Costa Rica, Thursday, Nov. 16, 2006, Vol. 6, No. 228

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Youngsters under 16
would not be able to wed

By the A.M. Costa Rica staff

A 15 year old can contract marriage in Costa Rica with the permission of a parent or guardian. But that will be prohibited if a proposed law reported out by a committee receives approval of the full Asamblea Legislativa.

Comisión Especial de Niñez y Adolescencia studied a proposal submitted six years ago and decided it was time to raise the marriage age. Those under 18 need parental approval for marriage. But legislators said they thought 15 was just too young.

Pedro Beirute, an expert who testified, said that such early marriages often end in divorce. Lawmakers said early marriages frequently are used to hide crimes of child abuse.
The proposal notes that some youngsters have been married earlier with permission of parents, but  Beirute said these parents were irresponsible.

The commission now is studying a proposal that would make illegal adoption by same-sex partners.  No decision has been made.

Parade Sunday celebrates
local cultural diversity

By the A.M. Costa Rica staff

There is a rally and parade downtown Sunday to raise awarness about migration and refugee issues.

Advertised as a carnaval of cultural diversity, the event is meant to bring to public attention some of the discrimination and resulting disparity facing the migrant and refugee populations.

One of the goals of the event is to eliminate xenophobic fear and discriminatory bias, to be replaced by a unified national consciousness and mutual respect, said organizers.  By educating the public, they hope that residents will recognize the positive contributions made by migrant workers towards national development.  Another parade goal is to raise awareness about the conditions and hardships of refugees, and to incoporate them into a new inclusive vision of Costa Rica, the organizers said. 

The organizers have drafted a number of issues that they wish to be addressed.  Some of them include labor rights, creation of an efficient immigration policy, the right to join one's family across national borders, housing rights, and the  rights for children. 

Those who are attending are expected to bring posters, banners and other visual means of expression, the organizers said.  The event will begin at 9 a.m. in Parque la Merced marching down Avenida 2 to the Plaza de la Democracia around 10:30 a.m. where further activities are to follow.

Our reader's opinion

Toothless criminal system
lets fraudsters operate

Dear A.M. Costa Rica:
In Response to Mr. Baker’s important article: “Workers there will not check on notaries to be sure they are current and not under suspension or verify that the person presenting a property for registration is, in fact, a notary.”
Mr. Baker has discovered the end of the fraud chain. To correct the problem changes need to be made at the top.
In California, you do not have to be an attorney or a notary to present documents to the county registrar. In California, the county registrar does not inspect documents other than making sure signatures are not photocopies (They do a smear test on ink to see if it’s an original). If documents are signed, by anybody, it is not until those documents are challenged and the district attorney has filed a criminal case that the title becomes clouded (imperfect).
However, if you forge documents and/or cause damage, you will go to jail. That’s a given, and that’s the difference.
The toothless Costa Rica criminal system and the lack of swift disbarment from the Colegio de Abogados (the equivalent of the Costa Rica bar association) have created the problem with the registry. Why, you ask? Because notaries know that if they claim their protocol book (notary book) was stolen, they are always given the benefit of the doubt in court, unless the co-criminal that colluded with the notary stands trial. If there is no co-criminal at the trial or the notary acted alone, he will always walk free.
I am uniquely qualified to write this as I have gone through the ordeal of trying to convict a notary, whose notary book was allegedly stolen, resulting in my property being fraudulently transferred to a snowcone salesman (who disappeared) and then being sold. And if not for my attorney’s diligence and passion, I probably would have lost.
If notaries know they will walk free, they are embolden to make a living on property fraud. Thus they look to the registry to find connections that will create other loopholes that the wolf (attorney) who is watching the hen house (Costa Rica legal system) can get away with.
The crux of the problem is the Colegio de Abogados policing their own. I believe they have a rule that says a notary has 72 hours to report his notary book missing.  The  missing notary book in my case resulted in scores of fraud cases overloading the criminal system. And guess who makes probably millions of dollars servicing these cases — attorneys. So, do the Colegio de Abogados and the Costa Rica government want to kill the goose that lays both the fraudulent and the ethical attorneys’ golden egg — I wonder, since they are the proverbial goose.
The answer is quite simple. The Colegio of Abogados and the civil code need to change:
First, a change in the civil code that makes it a crime not to report a notary book stolen within the prescribed time. If the notary does not report the book stolen, he needs to be charged with criminal negligence and have civil liability regarding fraud committed using his stolen notary book.
Second, the Colegio de Abogados needs to start enforcing its ethics and disbarring crooked notaries for life. Next, there needs to be affiliations that an attorney can join which allow consumers to determine if a notary is a specialist in good standing. These affiliations can withdraw the notary’s endorsement and act as quality control, an arm of the Colegio de Abogados.
Until there is some action regarding the laws and regulations, you cannot expect the problem to be corrected by suspending the head of the registry. More likely, it is a smoke screen used to cover the real culprit — the Colegio de Abogados and the civil and criminal code created by the Costa Rican government, both parties headed by the same professionals partial to collecting golden eggs. They collected a lot of mine, along with my stomach-lining, hairline, personal and family upheaval from a four-year lawsuit. Your eggs may be next!
Phil Baker
Costa Rica and Calfornia
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San José, Costa Rica, Thursday, Nov. 16, 2006, Vol. 6, No. 228

Where to park
the boat?

Those fortunate enough to have a yacht will have plenty of parking spaces at Bahia Escondida that is being constructed in Golfito. Developers plan to have 86 slips with dockside concierge service ready a year from now and more the following year. They have released this rendering of
the marina.

Arias says that the press should be pluralistic and independent
Special to A.M. Costa Rica

President Óscar Arias Sánchez called on the news media to defend democracy as a principal objective, saying that in doing so more important than having a free press is the need to have press that is pluralist, independent, responsible and constructive.

In this way Arias, winner of the Nobel Peace Prize in 1987, laid the groundwork for discussions that the InterAmerican Press Association is holding here in its Hemisphere Conference on Journalism Values in the 21st Century. The event opened Wednesday morning with a debate on ethics in journalism, with more than 100 prominent figures and experts in a number of specialties from throughout the Western Hemisphere and invited participants from elsewhere in the world taking part.

“Democracy needs not only a free press,” Arias declared, “but an independent press, in regard to not only the political power but also the economic power.

"If we are to passionately defend press freedom, then let us concern ourselves with being consistent in our liberal advocacy. Let us show distrust of any kind of excessive concentration of power, and not only that in which the government engages.”

The association's president, Rafael Molina, in introducing Arias said that “it is very important for our organization that emphasis be placed on the ethical aspect of journalism, which is above any technological progress and advancement of the media as the core and strength of press freedom and free speech.”

Molina, editor of the Santo Domingo, Dominican Republic, daily newspaper El Día, was joined at the top table by Colombian Vice President Francisco Santos; the chairman of the association's Committee on Freedom of the Press and Information, Gonzalo Marroquín, from Prensa Libre, Guatemala City, Guatemala, and Chapultepec Committee Chairman Bartolomé Mitre, from La Nación, Buenos Aires, Argentina, among others.

The debate during the conference, which is being held through today and is funded by the Robert R. McCormick Tribune Foundation as part of the association's Chapultepec Project, is focused on some burning issues for the press, among them impartiality and fairness; the role of the news media in a free society; editorial independence and conflicts of interest in relations with advertisers and/or government; news leaks and protection of sources; the quest for the truth and accuracy, and the question of privacy and public figures.

In much of his speech Arias was very explicit in referring to the responsible role that democracy requires of the news
 media. “For democracy to realize its full potential for the building of freer and fairer societies, then, it is equally important that together with a free press we be able to form a pluralist, independent, responsible and constructive press,” he said.

Describing himself as “a Costa Rican lover of freedom,” Arias said that he hoped legislative bill No. 15974 on freedom of expression and press freedom would be given priority treatment in the legislative assembly. “This initiative, which merits careful review, contains many of the keys for improving legal protection of press freedom in Costa Rica and thus enriching our democracy,” said Arias.

Arias took the opportunity also to underscore “the importance and value of freedom of the press in the modern world, in which the news media and press freedom should be used not only to denounce corruption but also to educate and to pass on civic values so as to help develop humankind and make better citizens and better communities.”

In this regard, and going into greater detail on his political views, Arias said that there are three causes that should be a priority for society and on which it was for the media to promote dialogue and debate: “reducing military expenditure, regulating the transfer of weapons, and halting global warming.”

"Only in that way will the battle for the expansion of press freedom have full meaning, when those engaged in it commit themselves to much greater causes than press freedom itself, only when the prodigious power of the written word, the voice and the image are put at the service of a reconciled humanity,” he declared.

Several times during his 30-minute speech Arias recognized the merit and work of the InterAmerican Press Association, stating that the organization “is one of those mainly responsible for Latin America, despite all its problems, today speaking a different language than it did in the past. Today our region speaks more the language of freedom than that of repression, more of hope than of fear, more of the people’s dignity than of government’s absolute power, more the language of enlightenment than that of obscurantism.”

In a special call upon the members of the association and recognizing the role of the organization in the defense of democracy for the past six decades, Arias said that there is now a new challenge.

“It is essential that you understand that democracy is asking for more, it is also asking you to be pluralists, to be independent, not only of the political powers-that-be but just independent, to be aware of the immense responsibility that goes along with your influence, and to make a commitment to use freedom of the press to build free society,” he said.

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San José, Costa Rica, Thursday, Nov. 16, 2006, Vol. 6, No. 228

English-speaking nations join to fight online sex abuse
By the A.M. Costa Rica wire services

Law enforcement agencies from several English-speaking countries are joining forces to combat child abuse online. The are joining a Virtual Global Taskforce, which is designed to allow countries to share resources to identify and help children at risk of abuse and to prosecute the predators.

Law enforcement officials from the United States, Canada, Britain and Australia met in Washington Wednesday to discuss the fight against online child abuse. The four nations are part of the Virtual Global Taskforce, which allows the government agencies to share investigative resources. John Clark, with the U.S. Immigration and Customs Enforcement said increased worldwide Internet use has required a new approach in dealing with sex offenders.

"Globalization is a double-edged sword. We all are appreciative of all the benefits it brings, much as the Internet, but there [are] also dark sides to it," he said.

One dark side of the Internet is the ease with which sex offenders ignore country borders. Jim Plitt, the director of  Immigration's Cyber Crime Center, said the taskforce
makes it easier to follow cases across borders. "The child might be in one country, the pedophile in a second, the server in a third, the anonymizer, bounce box or other technology in another country and the money if it's a commercial Web site situation can be in several countries, that has to all be worked together," he said.

Plitt says an important piece of the cooperation is an around-the-clock watch system. One nation will police the Internet for a portion each day and then rotate the responsibility to another taskforce member.

Jim Gamble, of Britain's Child Exploitation and Online Protection Center, says this watch system allowed local police to arrest an offender two hours after U.S. authorities learned in a chatroom that he planned to molest his children. Gamble says this new system turns offenders into targets. "The Internet is yet more hostile for the predator because we are working in this way. If you're thinking of going online tonight to identify and groom a vulnerable child, bear in mind that we're online looking for you, and we're doing that 24/7," he said.

Gamble also says other countries, including Italy, have expressed interest in joining the taskforce.

World Health Organization targeting fake drugs on Internet
By the A.M. Costa Rica staff

The World Health Organization and more than 20 international partners are launching a global action plan to combat counterfeit medical products.  The World Health Organization says the plan includes a package of measures aimed at helping national authorities safeguard their populations from the dangers of counterfeit medicine.

The World Health Organization says counterfeit drugs are a growing threat to the health and well being of people everywhere in the world.  But, it says the dangers are greatest in poor countries.

The latest estimates show more than 30 percent of the medicine in areas of Latin America, South East Asia and Sub-Saharan Africa is counterfeit.  In emerging economies, the World Health Organization puts that figure at 10 percent, but says it goes as high as 20 percent in many of the former Soviet republics.

The World Health Organization warned 50 percent of illegal internet sales are counterfeit.

Howard Zucker, assistant director general for health technology at the organization,  cautions people to be very wary about buying drugs on the Internet. He says people
often are less careful about buying medicine from an unknown source than they are about buying a T-shirt.

"Now it would be one thing purchasing an article of clothing or even a piece of electronics on the Internet," he said.  "The worst that happens is you feel like you unfortunately spent money for something which is not of good quality.  It is another thing buying medicine on the internet and finding out that you purchased medicine which is of poor quality, counterfeit, and worse yet potentially can harm you or even kill you."

Zucker, a physican, said counterfeit drugs proliferate because the profits are huge and the risks are low.  He says some studies estimate fake medicines bring in up to $80 billion a year, but penalties for getting caught are relatively modest.

He says WHO's five-point action plan is calling for the development of better technologies, which can prevent counterfeiting and can detect and track counterfeits on markets and on web sites.

He says the plan urges countries to enact much stronger legislation against those who make and sell fake drugs. 

But, he says laws are only good if they are enforced.

Venezuelan president's hemispheric influence seen slipping
By the A.M. Costa Rica staff

A top U.S. State Department official says he thinks Venezuela's President Hugo Chávez is losing influence following his verbal attack on President George Bush at the United Nations in September. The official, Undersecretary of State Nicholas Burns, says the latest election trend in Latin America is toward moderation.

Chávez appears to be headed for a big re-election win when Venezuelans go to the polls Dec. 3.

But the State Department's senior policy official says he believes the regional influence of the Venezuelan leader has begun to erode because of his rhetorical excesses, including a scathing attack on President Bush at the U.N. General Assembly.

In the Sep. 20 New York speech, Chávez denounced President Bush as an imperialist devil who had devoted his years in office to military aggression and oppression of the world's poor.

At a State Department security forum for U.S. corporations operating abroad, Burns said the "objectionable and somewhat ridiculous" Chávez remarks may have been a political turning point for the Venezuelan leader.

He said the speech, seen as exceptionally inflammatory by U.N. standards, back-fired and may have cost Venezuela the
regional seat on the U.N. Security Council it avidly sought.

"He ran, Venezuela ran, for a seat in the Security Council and they were defeated in large measure probably because of that speech," Burns said.

"Because people see him for what he is. He is somebody who divides, who throws little bombs, rhetorical bombs, into rooms," he continued. "And he seeks to tear people down. But the agenda of the new Mexican government, of President Uribe in Colombia, of President Lula in Brazil, is to build up, is to increase trade and investment, is to reach out to the private sector, is to have a hemisphere that is united with the United States not divided from the United States."

Burns said that earlier this year, he might have accepted the conventional wisdom that Chávez was on the rise, using petro-dollars to "finance all sorts of nefarious activities."

But he asserted that Chávez is now losing influence, and that recent elections in the region, with the exception of last week's Nicaragua vote that brought leftist Daniel Ortega back to power, have been toward what he termed responsible governments of the center-left and center-right.

Burns expressed hope that Bolivian President Evo Morales, seen as a protégé of Chávez, will adopt a more integrationist approach to the rest of the hemisphere and "turn back toward the mainstream."

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Another season of surf competition begins this weekend
Special to A.M. Costa Rica

The seventh annual national surfing circuit kicks off this weekend in Boca Barranca near Puntarenas. The Circuito Nacional de Surf will be bigger than ever this year, spanning over six months and visiting nine beaches, said organizers. Some of the best surfing in the world can be found on the coasts of Costa Rica, so it is no surprise that the national circuit is taking on a more aggressive schedule, they said. 

Organizers have increased the size of the circuit in both events and categories offered. The competition now caters to almost all ages for both boys and girls, as well as adding the junior long-boarding division and season-long team competition. Some 200 surfers are expected.

Registration for the first date of the Circuito Nacional de Surf can be made on Thursday between 5 p.m. and 7 p.m. at the Jass Surf Shop in Playa Jacó or on Friday, also between 5p.m. and 7 p.m., at the Boca Barranca Hotel. More information is available at www.surfingcr.net 

Photo by Shifi Surf Shots
Jairo Perez, two-time Costa Rican national boys champ.

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