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These stories were published Monday, Dec. 16, 2002, in Vol. 2, No. 248
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A.M. Costa Rica photo
Workman puts final touches on float for a fruit drink company
Parade of Lights draws big in San José
By Saray Ramírez Vindas
of the A.M. Costa Rica staff

The Festival de Luz Saturday night was a gigantic kickoff for the holiday season. An estimated 500,000 persons lined the two-mile parade route six deep. A high percentage were children.

The show kicked off after sunset with simultaneous fireworks displays at four
points in the city. A mist-like rain sprinkled the crowd and the marchers around 7:30 p.m. In general, the weather cooperated, and even traffic jams were few, thanks to heavy contingents of transit police who started closing the roads by 3 p.m.

Fireworks kickoff

His first parade

Desamp dancer

Demasa band tuba

A.M. Costa Rica photos by Saray Ramírez Vindas
Part of the happy, well-behaved crowd. There were no real problems for police.
Abel Pacheco suggests that investors are fools
By the A.M. Costa Rica staff

President Abel Pacheco got low marks for compassion from frustrated investors over the weekend.

The president was quoted by the Wall Street Journal saying this about persons who put money with Luis Enrique Villalobos Camacho:

"The Bible says the number of fools is infinite."

Bill McWade, a Florida investor, quickly drafted an e-mail to Jeannette Arias, the fiscal in charge of the Oficina de Atención a la Victima, in which he said:

"Why should I accept the ridicule of a man who suggests that I am foolish, foolish to have invested in a business that the Costa Rican Government allowed to operate illegally for over 20 years?" McWade, a frequent letter writer, sent a copy to A.M. Costa Rica.

Other investors also said privately that they thought Pacheco was unkind.

The quote was in an article Friday that began on the financial newspaper’s front page. The headline said "Retirement Dreams Fall Prey To Schemes in Costa Rica/Collapse of 'Brothers Fund' Rattles Subculture of American Expatriates.

Reporter Jose De Cordoba spent a week here talking to figures in the collapse of the Villalobos investment operation that paid from 2.8 to 3 percent interest a month to primarily North American investors.

The Chicago Tribune carried a story Friday, too, entitled: "Hot Costa Rican get-rich scheme burns U.S. expatriates." Tribune reporter Hugh Dellios also wrote in his story about the collapse of Savings Unlimited, a similar investment operation run by now-fugitive Louis Milanes.

There was not much new in either story for someone who had been reading A.M. Costa 

More Villalobos letters
BELOW!

Rica since police raided Villalobo’s office and the family’s Ofinter S.A. money exchange operation July 4. But the stories represented the first publication of the situation in major North American newspapers. 

There seems to be 42 references to fools in the King James Version of the Holy Bible, but an Internet search could not determine exactly what verse Pacheco was citing.

Costa Rican officials continue their investigation of the Villalobos and Milanes investment firms. Interpol, the international police agency, also has become involved, meaning that the search for the two men is moving worldwide.

Friday investigators searched casinos associated with Savings Unlimited, as well as the San José offices of two lawyers who have done work for Milanes. The casinos are at the Casino Tropical at the Morazan Hotel on Avenida 1, the Royal Dutch Casino on Avenida 2 and the Europa Casino in the Hotel Raddison.

Those left behind to operate the casinos insist that their operation is separate from Savings Unlimited, and the casinos are held in separate corporations. However, officials are expected to seize everything left behind by Milanes and place it in a form of receivership for the benefit of investors.  Prosecutors are expected to argue that the casino operations were the window-dressing in Milanes’ failed investment scheme that stripped clients of at least $260 million.

He told investors their money would be used for Casino expansion and slot machines.

All properties but the Europa Casino are considered of limited profitability in the crowded San José casino market and the Royal Dutch at least has begun discharging employees.

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An analysis on the news
Mafia activity here not yet shown to be illegal
By the A.M. Costa Rica staff

Word that the Mafia is involved in international betting operations here should not come as a surprise to Costa Rican officials. But officials in New York have yet to show that anything illegal was done in Costa Rica where betting is legal.

The U.S. Attorney’s Office in New York announced the arrests last week of 27 alleged mobsters, and said that in the investigation have turned up a gambling link to Costa Rica. The nature of the link was not described fully, but it seems that employees in the United States were channeling bets to Costa Rica via telephones there.

Mob infiltration in gambling operations are not unusual. The flow of money allows gangsters to skim profits and not pay taxes. The U.S. gambling mecca, Las Vegas, continual fights against mob infiltration even though this is the town the mob built.

Gambling is the least of the worries for the individuals arrested on indictments this week. According to police there the charges include racketeering, narcotics trafficking, extortion, loansharking, witness tampering, perjury and income tax evasion conspiracy, as well as illegal gambling.

In true Mafia fashion, the principal players are accused of muscling their way into a Freeport, Long Island, restaurant where they skimmed up to $10,000 a week from bar sales.

U.S. Attorney Roslynn R. Mauskopf, in a release from her office, said that Joseph Caridi, 54, ran the gambling operation from his residence in East Northport, Suffolk County, from at least April 2002 through August 2002 and brought in thousands of dollars. The operation maintained toll-free numbers.

The arrests in New York must be seen against the backdrop of that state’s continual effort to eliminate offshore betting. New York Attorney  General Eliot Spitzer has been a leader in attempts to prevent the use of credit cards for offshore gambling payments. The large credit card companies are headquartered in his state.

The state operates a lottery and off-track betting. So does the Mafia. One of those arrested last week ran an illegal numbers operation in New York in direct competition with the state’s lottery. Typically, illegal operations offer better odds than state-run lotteries.

The U.S. government has tried without success to make Internet gambling illegal, but the practice is so widespread and officials have been unable to target the offshore banking and phone room operations that make the system work.

Gambling operations, here and elsewhere, represent a prime opportunity to skim profits. A character flaw among Mafia members is that they would rather earn $1 by criminal activity than $100 by legitimate means.

Costa Rican betting operations are not hard to set up. The legitimate ones occupy swank settings like the office complex of Mall San Pedro. Other operations are less consistent about paying off winners. Complaints about some companies are routine.

The alleged Mafia members arrested in New York mostly were members of the Luchese crime family. Earlier this year in May the personal bookmaker of Gambino family crime boss John Gotti was arrested here, and he was believed to have maintained some kind of betting operation in the La Sabana Oficentro where he was arrested. 

That man is Dominick Curra, who was a convicted fugitive when he arrived here a year ago.

Within the last year, offshore betting operations here have had passive roles in several scams. A 17-year-old, Cole A. Bartiromo of Mission Viejo, Calif. , ran an internet securities scam called Invest Better 2001 and stashed $1 million in a betting account here, according to U.S. officials.

Another scam suspect, Salim Damji, pitched stock in his company, Strategic Trading System, to Ismaili Muslims all over Canada. When he was arrested in November, police here were asked to raid an offshore operation in Sabana Sur where he was believed to have stashed millions.

The men arrested in New York must not watch many crime movies. Federal officials recorded hundreds of  hours of court-authorized telephonic interceptions that contained detailed descriptions of the operations. The phone taps even led to the arrest of a fugitive in Florida from telephone calls made to New York.

So far it appears that Costa Rica occupies a minor role in the New York operation, but the country’s lack of effective regulation of casinos, lending and offshore gambling make it a prime location for those who would hide illegal assets or conduct legal activities here that are illegal elsewhere.

Heroin production glut blamed on spraying
By the A.M. Costa Rica wire services

WASHINGTON, D.C. — The Bush administration has defended its anti-narcotics efforts in Colombia in the face of congressional criticism. Local drug enforcement and police officials told a congressional panel Thursday that highly-addictive Colombian heroin is flooding into the United States. 

Some lawmakers in the House of Representatives are upset that joint U.S.-Colombian eradication efforts have shifted recently to spraying of coca plants, the raw material for cocaine, rather than opium poppies which are used to make heroin.

Appearing before the House Government Reform Committee, officials from local police departments in several U.S. states, testified about what they called sharp increases in heroin use. 

"This dire problem is the direct result of the Colombians intentionally flooding their established cocaine markets with stronger, cheaper heroin," said Scott Pelletier, a detective with the Portland, Maine police department. "We can no longer wonder if our children will be exposed to heroin. Now, we must wonder when will they be exposed and pray that they choose not to experiment with it."

Also testifying was Tony Marcocci, a detective in the District Attorney's Office for Westmoreland County, Pennsylvania. Displaying small bags of heroin, he says local authorities now face what he calls a more urgent, deadly and addictive enemy. 

"These bags contain very small quantities of heroin, usually between .01 grams and .03 grams," he said. "The reason that such a small amount of heroin can be placed in these bags is because the purity of this heroin is between 80 and 90 percent. We have never experienced heroin of this quality in our careers." 

Under "Plan Colombia," the United States provides millions of dollars in anti-narcotics and logistical assistance, including helicopters and spraying in key coca and opium-producing regions.

However, congressional critics say spraying of opium dropped from 9,200 hectares in 2000 to only 1,800 in 2001. This, they say, resulted in an upsurge of heroin reaching the U.S. market.

Paul Simons, acting assistant secretary of state for international narcotics and Law Enforcement, blamed equipment delays and other problems for the decrease in spraying of opium in 2001. He says those problems have now been resolved, and predicts spraying of opium will recover to previous levels.

But Congressman Benjamin Gilman pressed Simons, and the U.S. ambassador to Colombia, Anne Patterson, on why the focus had shifted away from opium eradication.

PATTERSON: "Mr. Chairman, we were also facing a crisis in coca. It was flooding, cheap coca, it was increasing at a rate of something like 20, 30 percent a year." 

GILMAN: "But madam ambassador, isn't most of the coca production going to the European continent, and the vast majority of the illicit drugs coming from Colombia are opium drugs at the present time?" 

PATTERSON: "Our estimate sir, is somewhere between half and one third of the coca production goes to Europe, but still a good half of it comes here." 

GILMAN: "But we have about 60 percent of the opium crop coming to the United States, do we not?"

PATTERSON: "Yes, sir."

The United States credits Colombian President Alvaro Uribe with making great progress in eradication efforts in the first months of his administration.

But lawmakers say more needs to be done to bring opium eradication back up to previous levels, and urge the Bush administration and State Department to make this a priority.


 
 
Two men convicted
in burning a boat

By the A.M. Costa Rica staff

The Tribunal de Juicio de Aguirre y Parrita has sentenced two men to prison for five years for setting fire to a boat tied up at Quepos.

The men, identified by the last names of Ceciliano Gamboa and Chaves Mesén were charged with the crime that took place May 6, 2000, in Pies 
Mojados de Boca Vieja de Quepos, said a report from the judiciary.

Prosecutors said that Ceciliano paid Chavez to torch the craft that was owned by another man. The damage was estimated at 14 million colons or about $37,000, and the convicted men were ordered to pay that amount.

Subatomic physicist
to speak in Escazú

Special to A.M. Costa Rica

Intellectual Club of Costa Rica welcomes world famous physics professor.

Dr. James Miller, professor of physics at Boston University, will be visiting a meeting of the Intellectual Club of Costa Rica for the second time Wednesday at 7 p.m. in Escazú.

Dr. Miller has recently made headlines in most of the major media outlets with results of his experiments on muons.  Muons are similar to electrons but have 200 times more mass and offer unique abilities to do precise measurements. 

These experiments offer the strongest proof yet that dark matter exists and that a new family of sub atomic particles are about to be discovered, said a club announcement.  This leads to the super symmetry that physics researchers have been theorizing about for years, it said, adding that what is more striking is these experiments once accepted by the science community will change the standard model of physics.

All persons who have background or ability to understand higher math are welcome to attend or join the club which has no dues by contacting the following for an invitation. 228-1162 or e-mail int@orbitcostarica.com

Chavez will import
fuel to Venezuela

By the A.M. Costa Rica wire services

CARACAS, Venezuela — The nation’s embattled president says his oil-rich country will begin importing gasoline to combat fuel shortages. 

Venezuelan President Hugo Chavez made the announcement Sunday during a weekly town hall-style meeting carried on state-run television.

Chavez said Venezuela will import gasoline. He blamed the opposition-led national strike for the situation, specifically the closure of the country's oil refineries.

The president went on to boast that his government has financial reserves totaling $15 billion, enough to purchase milk, gasoline or anything else the country needs to withstand the strike. The work stoppage, which aims to force Chavez' ouster, is now in its third week.

Chavez is backing his words with action. Early Sunday, troops loyal to the president seized control of a gasoline-laden tanker that has been idled since its crew joined the strike. Opposition leaders denounced the move as illegal while demonstrators in small vessels ringed the tanker in protest.

Across Venezuela, gasoline stations have been running out of fuel in recent days, adding to woes stemming from the closure of banks and many businesses.

The very idea of gasoline imports left many Venezuelans stunned. Caracas resident Eduardo Losada said for Venezuela, the world's fifth largest oil producer, to import gasoline is like the United States importing McDonald's fast food.

Losada says the situation is ridiculous, lamentable, and pathetic. But, he says, what can we do? Shrugging, he adds, this is where the country finds itself.

Saturday, hundreds of thousands of Chavez opponents took to the streets of Caracas to demand the resignation of the president, whom they accuse of abuses and ineptitude. A day later, the president appeared unfazed by the demonstration, saying he has no intention of going anywhere.

Argentina again
goes in default

By the A.M. Costa Rica wire services

Argentina says it will not be able to make a debt payment of $726 million to the World Bank. 

Economy ministry officials say they made the decision after failing to secure new loan aid from the International Monetary Fund. Authorities say they will pay the World Bank once an agreement is reached with the Monetary Fund. 

Argentina missed a payment to the World Bank last month. The financially-troubled nation is cut off from further aid from the World Bank. 

Meanwhile, the Monetary Fund said Friday it is working closely with Uruguay on issues related to an upcoming review of a stand-by arrangement for loan aid. 
 

Check your tickets

By the A.M. Costa Rica staff

The winner in the big Christmas lottery is No. 33 of Series 379. That set of numbers was picked Sunday night, and the ticketholder is due 1.5 billion colons, some $4,000,000. Officials with the Junta de Protección Social, which runs the lottery, said the winning ticket was sold in three parts in Plaza Mayor in Rorhmoser. A host of smaller prizes were awarded.
 

Regional tourism plan
approved at summit

By the A.M. Costa Rica staff

The chiefs of the Central American states have approved a plan of action on tourism designed to enhance the image of Central America as a destination in the European and Asian markets.

During their meeting Friday the chief executives of the Central American states agreed to support Agencia de Promoción Turística de Centroamérica to be located in Madrid, Spain, that would work to increase the visibility of Central America.

The plan of action also envisions the development of tourism itineraries with multiple destinations. The plan also calls for creation of a tourism fund similar to Fondo Nacional de Turismo in México.

Pacheco to open new docks

By the A.M. Costa Rica staff

President Abel Pacheco will be in Limón this morning to mark the anniversary of 150 years of continuous habitation there and also to inaugurate new docks for cruise ships that tie up in the port.
 

Kissinger resigns
job on Sept. 11 panel

Special to A.M. Costa Rica

Henry Kissinger, chosen last week to head a broad probe into intelligence failures that lead to the Sept. 11, 2001, terrorist attacks in the United States, has resigned the job.

Kissinger, in a letter to President George Bush,  said that he could not take on the job until he liquidated his consulting firm, Kissinger & Associates. Kissinger had been the center of criticisms about his consulting firm and whether he would have to reveal the names of his clients.

Both Republican and Democratic members of the U.S. Senate Ethics Committee determined that he had to do so. Rather than reveal who he has been working for or liquidate the firm, Kissinger, 79, quit. He had signed non-disclosure agreements with his clients. He was national security adviser and secretary of state under President Richard Nixon.
 
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Democracy-building stressed by Noriega in talk
Special to A.M. Costa Rica staff

WASHINGTON, D.C. — Hemispheric negotiations to create a Free Trade Area of the Americas by 2005 receive significant media attention, but efforts to deepen democracy in the region are no less important, said Roger Noriega, U.S. ambassador to the Organization of American States.

Speaking Friday at the Center for Strategic and International Studies, Noriega said: "The greatest achievement of the last few decades in our hemisphere is that all but one of our countries are striving to perfect their democratic governments." 

He added that democracy, not free trade, is the "centerpiece" of the Summit of the Americas process. He also noted that the first mandate in the action plan issued by the 34 hemispheric leaders at the most recent Summit in Quebec City, Canada, in April 2001 is to make democracy function better.

Citing President Bush's remarks in Quebec, Noriega said that democracy is the "foundation on which we build other key elements of our society, like a strong judiciary, efficient social services, quality schools and secure ownership of land." The ambassador conceded that "democracy is inherently messy and never perfect," and that "democratic institutions require consistent maintenance and care." He cited the Bush administration's support for legislation granting $3.9 billion to improve voting procedures around the United States as an example of U.S. efforts to make democracy work better domestically.

Regionally, much remains to be done as the hemisphere continues its transition to democracy, he said.

"There is still a lot we need to do: nurture political parties that represent public interests and rise above personalities or special interests; reform judicial systems so that impartial and professional justice is the norm; strengthen executive agencies that truly serve the general welfare of the 

citizenry; and — most important — empower citizens to make government work for them," Noriega said.

As evidence of efforts to achieve these goals, the ambassador outlined the democratic mandate issued at the Quebec Summit and progress toward fulfilling the directive.

The five elements of the summit's democratic mandate are: improvement of electoral processes, furthering transparency and good governance, ensuring free media and communications, fighting corruption, and empowering local governments.

Among the most important steps taken to fulfill the Summit mandate was the approval of the Inter-American Democratic Charter on September 11, 2001, Noriega said.

The ambassador said that while peaceful solutions to the political crises in Venezuela and Haiti are ultimately in the hands of their own citizens, the Charter is demonstrating its value by strengthening the ability of the OAS to work toward dialogue and reduce tensions in those nations.

In addition to helping address political crises, the charter also provides important tools to prevent crises before they can occur, Noriega said.

Noriega said that the United States is also carefully monitoring regional government actions toward the media and funding "a variety of training and visitor programs aimed at helping journalists do their job better."

Noriega acknowledged that judicial reform in the region will be a "decades-long process," but emphasized the importance of judicial institutions in ensuring the proper functioning of democracy and the rule of law. He said the United States is working hard to advance judicial reform in the hemisphere and cited as an example the support of the U.S. Agency for International Development of local level "casas de justicia" in the region. 


 
More letters on Villalobos
Investors in denial,
says former resident

Dear AM Costa Rica:

Bravo in reporting the Villalobos scam and "telling it like it is." Your reporting is to be applauded not condemned.

The letters in your Dec. 9 edition from Mr. Culhane and "Another John," are right on the money. 

As a professional investment banker and investor for over 30 years, and a former one-year resident of Costa Rica, the level of innocence, ignorance, and denial exhibited by the "investors'' in the Brothers scam, as exhibited by letters sent to you, and other media sources by these innocents, comes as no surprise. Some of the dumbest and greedy people I have ever meet in my life are Americans living in Costa Rica. 

Ten years ago when I lived in Costa Rica, an acquaintance of mine told me about Villabolos' wonderful opportunity. 3% a month. Irresistible right? But, how does he do it?

I meet with Villalobos and at once knew he was full of s---. No balance sheet. No income statement. No statement of condition. Just an undated check. You have only yourself to blame for your gullibility and greed.

NO ONE HAS EVER LEGITIMATELY MADE 36 PERCENT ON THEIR MONEY EVERY YEAR FOR 20 YEARS IN THE HISTORY OF THE WORLD! 

So get over it. Your money is gone.

Pay your back taxes. The rest of us do. No, you don't have an offshore exception for passive income. And, as a taxpayer I'm not going to contact A.M. Costa Rica's advertisers. "John." I have, however, sent a letter to the commissioner of The IRS asking what the enforcement status of this affair is. I hope others who pay their tax will do the same. I'll be please to let you know what the Comish says.

Charles Hobbs 
New York, NY

 

She levels a curse
at those naysayers

Dear A.M. Costa Rica:

I for one am disgusted with all of you expert outside opinionizers who have no personal relationship, no history, no stake in the Brothers, aka Enrique.

Most of you base your negative suppositions and up-your-nose theorizings against Enrique on the question(s): "Where does he make his money?" or "Why doesn’t he disclose how he can pay such high interest?" or "Why would the government freeze his money if he weren’t up to no good? or "Why didn’t he stay and turn over all his funds and files to the government when they raided his offices and grabbed his money and disabled him from continuing his business?" (There was an informative letter by John Manners in the Tico Times (11-15), and another a few days earlier . . . on the Internet, which described briefly how banks, money brokers and other financial conglomerates earn up to 10% per month — but they don’t share profits with their investors.)

In any case, your imbecilic questions are rhetorical and fraudulent, based on your already-arrived-at conclusion and attitude that he’s a crook. But the crookery is in you, buried and unacknowledged, and projected out onto him. If you had all that money, you’d run with it, wouldn’t you? No?--Not even a hint of a tendency to split, take it on the lam? Or are you just being objective, sharing your miserable, stereotyped, copy-headed points of view?

And then there are the Tico lawyers. Anyone with half a brain knows what they’re after. And the government prosecutor too. Not to forget the TT.

I curse all your hoped-for negative self-fulfilling prophesies for the Brothers. I curse you all, especially for your hypocritical poignant concern for the victims. Remember, everything was fine, nobody was being swindled, money was pouring into the local economy — until the government — not the Brothers — nabbed the money and forced them out of operation.

Will you dare to print this? I think not.

Nona Gomez de Silva
San Francisco, Calif.
Psychic investor
predicts good turn

Dear A.M. Costa Rica:

PSYCHIC FORECAST IS GOOD!!! 

I’m known as a Psychic Explorer, I travel internationally helping governments with the knowledge of how to make there laws in tune with the little people, the children.

My psychic ability complements my energy to see what I am really against what is in the political arena and what avenues to use to get the best results without stepping on to many egos. I do this for free, when it is necessary. I do give personal readings no charge, so this is one of those readings. I feel it is important to give the investors of Villalobos Brothers facts as my reading predicts: 

First of all, I’m an investor and proud of it. I knew when I first met Mr. Villalobos he was honorable and if anything happens it will be from outside the company. 

When you are as professional and have as many followers as Villalobos has and in business for 25 years, you know the government has to step in and say why? The government is suppose to but the problem is there is some corruption happening within the government at the highest levels and Villalobos is the biggest target to tag. 

Don’t think that the government is against you. They’re too busy against each other, and that’s their downfall. Investors. don’t let the news media get you down, and don’t fight among each other. Just remember it is only business, and the professionals will exceed and the flacks will fall. You picked an honorable businessman to invest your money in, he did his job and not let the wrong hands touch your money. Expect things for best to happen the end of January to the first of February. 

Meantime, try to live your life as positive as you’re able and have trust in your instincts about Mr. Villalobos. They’re true, and that’s on our side honest $ and positive energy to help this business relationship to go on for many more years. But it won’t be in this country but a neutral one. This country has lost its international respect and will pay the economic price for it.( May your God be with you) 

Stahr Galloway
Investor seeks deal
to avoid bloodshed

Dear A.M. Costa Rica:

Attention: Mr. Villalobos and the Costa Rican Government.

Below is a scenario that could happen if all parties concerned don't act quickly and decisively on this financial mess that has been created. 

Bureaucrats pointing fingers at each other, a government with 50 years of corruption and mismanagement that is now hitting home hard. 

I am not sure of the credibility of Villalobos any more. I am not hearing any or reading any more "holier than thou" defenses coming from him. I am not even sure he has any more attorneys representing him. 

Everyone better "very quickly" put their egos aside. With approximately 800 million dollars out there somewhere, here's what could happen. 

I fear that military groups, the Russian Mafia, the Italian Mafia, any of the drug cartels, etc., will be descending on to Costa Rican soil, threatening Villalobos' family, lawyers, and friends, maybe even killing some, to find him and all this money for themselves. With their lack of humanity or regard for any laws, they would torture and kill. 

If this were to happen, Costa Rica and the "lenders" would not benefit by one single cent, and all the financial damage that has been done already would only worsen. And then the image of Costa Rica, the "friendly tourist and ecological peaceful country"? 

What a joke! Start talking to each other, RIGHT NOW, THIS MINUTE. Work out a compromise that benefits all concerned so this country's economy can start to prosper once again with no one getting killed or tortured in the process. 

DON'T BE FOOLISH AND PROCRASTINATE, JUST DO IT. 

John A. Bisceglio 
Santa Ana
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