The government’s interim tax plan that is supposed to chip away at the national deficit might be about to collide with the law of diminishing returns.

One part of the tax plan is a small increase in the tax on alcoholic beverages. But Sunday the Fábrica Nacional de Licores, the liquor monopoly, said it was investigating unauthorized brands that have entered the local market. The company also said that bootlegged liquor is proliferating. Presumably such alcoholic products do not pay the required tax.

The interim tax plan also calls for a new levy on slot machines. Each slot machine will be assessed a monthly tax of 100,000 colons (some $266). But Gregory Ruzicka, a principal in the Hotel Del Rey in San José, said over the weekend that his hotel would be cutting in half the number of slot machines it keeps on the premises. Other casino operators were considering the same step.

Ruzicka said that each machine generates about $15 a day in earnings. Overhead is about $10. The government tax would take about $9 a day from each machine, thereby causing a net loss to the casino.

Proponents of the plan say that it will raise 62 billion colons  ($160 million) from Jan. 1 until Dec. 31, 2003. The higher income will reduce the public debt that now stands at about 331 billion colons (about $880 million). However, that estimate seems to have been based on conditions as they exist now.

Those firms being taxed are likely to take steps, such as at the Hotel Del Rey, to reduce their tax liability. Only future financial reports will show if deputies calculated correctly the impact of these diminishing returns from the tax.

Hundreds of casino and betting establishment  employees rallied in front of the Asemblea Nacional Dec. 16 when national deputies gathered to pass the final tax package. The employees said that tax plan would put them out of work, but deputies passed the measure anyway

In addition, a licensing fee on electronic sportbooks might cause some operators to consider relocating their operations to other countries. Sportsbooks are portable because they rely almost completely on telephone and Internet connections.

The approved tax plan provides a sportsbook licensing system that ranges from 10 million colons to 24 million, depending on the number of employees. That’s from $26,500 to $64,000 a year. The government had planned but then withdrew a monthly tax on each computer work station.

A doubling of tax on cigarettes also is a key part of the interim tax plan. Yet cigarettes are an item easily smuggled when doing so is profitable. Despite recent government efforts to crack down on smuggling, steady illegal shipments of many types of articles continue to arrive from Panamá to the south and from the sea.

The tax-collecting Ministerio de Hacienda Sunday expressed its determination to make sure that any cell telephones used in the country had been brought here legally.  The telephones are small and expensive, a perfect combination for smuggling. The ministry ordered that the Instituto Costarricense de Electricidad and its agents require a copy of the original sales receipt for any cellular telephone that is connected to the national network. 

A new wave of cellular phone lines are now being distributed, and the ministry wants to make sure that smuggled telephones do not find their way to the hands of consumers. If a cellular telephone has been purchased outside the country, the person seeking the telephone line must show passport stamps proving that they had been at the place where the telephone was purchased.

Of course, the smuggler’s alternative is to forge sales receipts.

No new taxes were imposed on retail sales. But the level of collection is expected to increase as part of the overall fiscal plan. The ministry also is setting up a plan whereby half the retail sales tax paid with a credit card in a store will be turned over to the ministry’s Tributación Directa tax collectors within 24 hours. The retail outlet would not do this. Remitting the tax would be the responsibility of the credit card company. The ministry hopes to use this system to make sure retail outlets pay all the sales tax they should. The amount is now at 13 percent.

CARACAS, Venezuela — Venezuelan President Hugo Chavez says recent military actions are but the first step in a plan to seize control of the country's oil industry from opposition strikers. 

Less than 48-hours after troops installed a replacement crew aboard a striking gasoline-laden tanker, President Hugo Chavez promised a cleansing of Venezuela's state-run petroleum company. He said oil managers who refuse to return to work will soon be unemployed and in jail.

Appearing on state-run television Sunday, Chavez called for the arrest of all who impede the normal operation of oil production. The president said his decision is in keeping with a recent supreme court injunction ordering oil workers back on the job.

The opposition-led strike, which has entered its fourth week, has provoked a severe fuel shortage in Venezuela, the world's fifth largest petroleum producer.

President Chavez said that abandoning one's public sector post is a crime. He compared the strike to a cancerous tumor that must be cut out.

Chavez said, those who try to paralyze oil refineries and other plants are demonstrating that they do not care about the suffering of the country. He labeled strike leaders as a traitorous 

Late Friday, Venezuelan troops arrested the opposition-loyalist crew of a tanker on Lake Maracaibo in the northwest of the country. The crew had refused to move the vessel and its 14 million liters of fuel to port. Saturday, Venezuela's defense minister pledged that the military would continue to play an active role in enforcing government decisions.

The announcement brought immediate condemnations from opposition leaders, who warned of a de facto militarization of the country and the loss of civilian rule. But if opposition leaders fear President Chavez' threats of detention, they were not showing it Sunday. One leader, Alfredo Ramos, sounded more defiant then ever when he addressed an anti-Chavez rally outside Caracas.

Ramos said, the Venezuelan people have a message for Hugo Chavez: "We are headed for the presidential palace to remove you." He said, "we will not stop until we are able to walk the path of peace, reconciliation and national reconstruction."

Across Caracas and in many other parts of the country, gasoline stations have run out of fuel. The shortage has begun to affect food distribution, just as most Venezuelans are attempting to buy goods for their Christmas feasts.

Fuerza Pública officers busted up a traditional Sunday chicken fighting meet but the bulk of the suspects fled the coop.

Police also said they were upset because children as young as 3 years were permitted to view the chicken fighting. The fights usually are to the death of one of the two animals.

The raid took place in Chirraca in Acosta Sunday afternoon. The fighting arena had been constructed on property owned by a man with the last names of Badilla Hernández, said police. They said the area could accommodate 200 spectators.

Police said they confiscated 39 fighting birds, some 33 owned by Badilla and six owned by a neighbor.

Downtown San José
sweep caught 57

Police officials said that a sweep through the downtown Thursday night netted 54 women and three men.

Police also picked up two Costa Ricans who were not carrying identification at the time.

Marco Badilla, director general de Migración y Extranjería, said that such raids would continue to ensure public safety. The primary target for the sweep was in and around the Hotel Del Rey at Avenida 1 and Calle 9.

In a new twist, Fuerza Pública officers and Policía Especial de Migración had the help of Interpol, the international police agency, to check out the criminal record of those detained.

Some 35 women and one man were Colombians, according to police, although nine nationalities were represented by those picked up in the sweep. More than half of those detained were able to go free by showing that they were here legally. But some 30 persons are likely to be deported.

This year will be
second warmest

WASHINGTON, D.C. — The World Meteorological Organization forecasts that 2002 will supplant 2001 as the second warmest year on record. An annual statement on the status of the global climate says 1998 remains the warmest year in the 1860-to-present instrumental record for land and sea surface areas.

The statement released last week said the global mean surface temperature for 2002 is expected to be approximately 0.50 degrees Celsius above the 1961-1990 annual mean value. The 10 warmest years have all occurred since 1987, nine since 1990. The rise in global average surface temperatures since 1900 now exceeds 0.6 degrees Celsius.

The organization forecast is based on observations to the end of November from a network of ships, buoys and land-based weather stations. The data are collected and disseminated on a continuing basis by 179 member nations.

The statement said El Niño climate conditions of moderate intensity returned to the tropical Pacific in 2002. El Niño is a disruption of the ocean-atmosphere system that affects weather around the globe. Among the consequences are increased rainfall across the southern United States and into Peru and drought in the West Pacific.

Cuba take a hit
on less tourism

HAVANA, Cuba — The economics minister says the island nation's economy grew 1.1 percent this year. Jose Luis Rodriguez told Cuba's National Assembly Saturday that growth in 2003 was expected to be a bit more, at 1.5 percent.

Rodriguez blamed the slow growth on hurricanes that hit the island hard and a drop in tourism, which has slumped after Sept. 11 of last year. Tourism is now Cuba's top source of foreign revenues, bringing in at least $1.8 billion a year. The island's economy had been enjoying stronger growth after a slump in the 1990s following the fall of  Cuba's close ally, the Soviet Union.

Festival opens up

By the A.M. Costa Rica staff

The annual Christmas festival opened Saturday in Zapote. The event will run until Jan. 5.

BUENOS AIRES, Argentina — Thousands marched peacefully here Friday to commemorate the one-year anniversary of the violent uprising that left more than 25 people dead. Last December's riots caused the resignation of then-president Fernando de la Rua and set off a series of events that has sunk Argentina deeper into crisis.

Argentina's unemployed and disenfranchised arrived by the thousands in Buenos Aires. They came to remember those who died in last year's violence and to again demand solutions for the country's crippling four-year recession. 

"We don't think that the government wants to hear us or can hear us. We've told them a million times, but we still continue to struggle," said factory worker Gerardo Robeano. He is one of the lucky Argentines who has a job. More than 22 percent of the population is currently out of work.

The government said Friday that it has made positive progress in negotiations with the International Monetary Fund, but no deal has been sealed yet for the multi-billion dollar bailout package officials are seeking. 
 
 

Professional Directory A.M. Costa Rica's professional directory is where business people who wish to reach the English-speaking community may invite responses. If you are interested in being represented here, please contact the editor. Psychiatrists Dr. Luis Carlos Sancho Torres   bilingual psychiatrist (UCR) • consulting • depression  • schizophrenia  • psychiatric disability VA Affairs • evaluations for gun permits   • bipolar disorders • addictions  • methadone Available 24-hour a day children and adults office: 233-7782 beeper: 233-3333 lucasancho@yahoo.com Lawyers INVESTMENT RECOVERY CENTER Learn how to best protect your interests in the Villalobos case. Explore your options at http://www.irccr.net Also, we invite you to join one of the most active discussion groups on the case.  Find out what people who care are saying. Join at irccr-subscribe@yahoogroups.com 2/16/02 tem Law Offices of Lic. A.A. Hernandez Mussio Attorney, Notary Public, Official Translator English and Spanish Specializing in Criminal  and Corporate Law Practice e-mail: legalxpt@racsa.co.cr www.forovial.com                            Ave. 10, Calle 19, No. 1906 Cell: 365-3088                                            San Jose, Costa Rica 132-5/29/03 Real estate agents MARGARET SOHN  of Carico 15 years Costa Rican real estate experience Member of the Costa Rican Real Estate Association, Lic. #1000  Member, Costa Rican-American Chamber of Commerce margaret@caricohenderson.com www.caricohenderson.com (506) 232-5016 home   (506) 233-8057 office  (506) 382-7399 cell  2/9/03 Investigators Empresa de Investigadores Internacionales S.A. Telephone (506) 280-5217  FAX (506) 280-5120 P.O. Box 297-2100 Costa Rica Cédula Juridica #3-101-097681-32 investigators@prodigy.net johnniechaverri@policeone.com 112-5/18/03 Web design iStarMedia.net - Custom Website Design & Development - Website Hosting - Website Marketing & Promotion - E-Commerce Solutions - Internet Consulting One Price Websites - "A great service at an unbelievable price! " For more information visit our website at www.istarmedia.net or call  399-9642 or email at: info@istarmedia.net 52-12/25/02

WASHINGTON, D.C. — The U.S. Department of the Treasury has designated Ukraine and Nauru as being of "primary money laundering concern" and has signaled its intent to impose sanctions on both countries.

In a Friday news release, the Treasury Department  said the designations are the first invoking new powers under Section 311 of the USA Patriot Act, broad anti-terrorism legislation passed by Congress shortly after the Sept. 11, 2001 terrorist attacks against the United States.

"We are telling the world clearly that these jurisdictions are bad for business and that their financial controls cannot be trusted," Deputy Treasury Secretary Kenneth Dam said in the news release. "The world stands on notice: these nations do not take the fight against money laundering and financial crime seriously."

In the case of Nauru, the Treasury Department intends to bar U.S. financial institutions from opening or maintaining correspondent accounts with Nauru-based financial institutions. Correspondent accounts allow foreign banks to use U.S. banking services and thus give their clients direct access to the U.S. financial system.

Nauru is an island in the South Pacific Ocean, south of the Marshall Islands with 12,400 population  and 21 square kilometers (about 8.4 square miles) of territory. The country got its independence in 1968.

In recent years Nauru has encouraged the registration of offshore banks and corporations, 
 

Costa Rica has links to Nauru through a number of firms based here that will create offshore banks for individuals using agents in that country. Nauru has two types of banking licenses, and one is for banks that only do business elsewhere. The country also has a strict bank secrecy law.

In the case of Ukraine, the Treasury Department intends to impose one or more of a series of information-gathering and record-keeping requirements on U.S. financial institutions that work with Ukraine.

The department is accepting comments on the Ukraine-related new requirements, according to the news release.

The Treasury Department action follows the recommendation of the Financial Action Task Force, a multinational group that identifies jurisdictions that fail to meet international standards against money laundering.

As a result of their failure to put into place sufficient anti-money laundering frameworks, the task force has called upon its members to impose countermeasures with respect to Ukraine and Nauru.

More details on the proposed Treasury action are available on the Internet at: 
 

http://www.treas.gov/press/releases/
reports/designation.pdf.

Dear AM Costa Rica:

Jackasses! Of course.

Why didn't I think of that? Thank you, Mr. De Pretis. However, you spoke too soon about Villalobos supporters finally realizing they have been "screwed." Running alongside your letter is one from a Ron Tucker who says Villalobos will return and make everything right based on a letter from Al Dia, which in itself is a hoot to read. And don't forget Don Paulsen who, from our "there's one born every minute" file, wants to invest MORE.

A.M. Costa Rica is far more entertaining then "The Sopranos" and certainly more amusing then letters to the editor published in The New York Times. I continue to be astonished and greatly entertained by the letters that you publish from the so called "investors" in the Brothers’ ponzi scheme. Gilbert & Sullivan couldn't make up this cast of characters.

Let's see. Hmmn. In addition to Tucker, Paulsen and Dia:

—We now have a Psychic Traveler (whatever that means) predicting that all will be well by February. Why didn't he predict that Villalobos would split town with the do-ray-me?

—Legal geniuses pushing the rather novel legal theory that its all the fault of the government of Costa Rica which should be sued (presumably in the World Court) for enforcing the law. This is analogous of a thief suing the police for arresting the owner of a pawn shop that traffics in stolen goods. The thief sues, saying he was damaged because he no longer has a place to fence his stolen merchandise. 

—Demands for the president of Costa Rica to resign because he isn't sympathetic enough to the scam's participants to have the government write out a check and make them "whole" on their illusionary ill-gotten gains. Let me see if I understand this correctly. Even though I knowingly didn't report or pay tax on this money to the Costa Rica Tax authorities and the IRS, which is a felony for U.S. citizens (I'm not conversant with Costa Rica law. I assume its the same), the government and the honest people who do pay tax should reimburse me for being dumb, making a bad investment, and knowingly engaging in felonious activity. The ultimate in FDIC insurance.

—A women who asserts that banks make 10% a MONTH on their depositors money. Yes, and that is why the prime rate is 4.25% a year, and 30-year mortgages are at 6% per year or less. I'll never get the hang of this investment business. That must be 4.25% a week.

—And, perhaps best of all (although I'll stipulate it is hard to top the psychic traveler bit), a guy who is now worried that the Russian Mafia will invade Costa Rica and engage in wholesale torture and murder to get their hands on the loot. You can't make this stuff up.

Keep up the good work. I now read you every morning while I listen to Imus. What a fun way to start the day.

Oh. Could you ask the Psychic Traveler what the DJI is going to do next year? I'm thinking of starting a hedge fund for select "friends." Guess where? 

Dear A.M. Costa Rica:

Good for you, for linking the two fugitives together. And for the courage to post the reward.

So, now the Bible-quoters are after you. Again, good for you. I would expect Ron Tucker, who is the Bible-quoting blind shepherd who was the "chief cheerleader," leading many people into losing their life savings to hurl Bible verses at you.

Mr. Tucker, here's a more appropriate Bible verse which fits you:

"The blind lead the blind and they both fall into the ditch."

The hot-eyed followers of the false prophet can't admit the prophet was false. If they do, they look foolish.

Dear A.M. Costa Rica:

Re Friday's letters: About A.M.'s kids: 

A.M. Costa Rica's student journalists show far more maturity in their youth than the letter writer from Escazú, who probably was immature (foolish) enough to have lost a bundle. Of course, being immature, he can't admit it's his fault and has to blame someone. Why not the journalistic interns at A.M. Costa Rica? Immaturity is not a function of age, as the writer proves so well. 

What Mr. Ron Tucker really finds "unacceptable" is his own foolishness. So, he plays the blame-someone-else game. He continues to await a "second coming" of "the grinch who stole Christmas," (and the rest of the year) from thousands, including many of his own sheep he has helped lead to the financial slaughterhouse. Some shepherd!

Dear A.M. Costa Rica:

It has been brought to my attention that you are offering a reward for the arrest of Mr. Enrique Villalobos. I do not fully understand the legal system in Costa Rica, but I cannot believe that any useful purpose would be served by arresting this man. I knew him years ago when I lived in Costa Rica and remain convinced that he will eventually be cleared of any charge of wrong-doing. 

I and thousands of others would appreciate it if you could use any influence that your paper may have to bring about a speedy and satisfactory resolution of this issue. 

Dear A.M. Costa Rica:

I was appalled to see your note offering US$500 for information leading to Enrique Villalobos arrest. From what I have read in A.M. Costa Rica, La Nación and Al Día, I could never conclude that such an offer would be made, specifically by your paper. 

As much as I know, not one investor, either those who have looked for legal action or those who have not (and I have the impression these are the majority) has made such an offer. 

On the other hand, in the last few days I read an extensive note in Al Día (I think it was on Dec. 12) with information leading one to believe Enrique is not a crook. 

Again, from what I have read, Enrique published a bilingual note in La Nación when he closed and sent a mail to the investors rally asking for patience. That is different from what Mr. Milanés did, and the reaction of investors in both cases has been very different as well. 

I wonder what led you to do such an offer. I sincerely believe you made a mistake MUCH bigger than the one you made when you said Enrique had defaulted Pastora, when actually it was the other way round. On that occasion, I wrote to you and you quickly corrected it. 

I think that, at least, your admission that while Milanés has few supporters Enrique still has supporters (and from the number of letters you have published one could conclude these are not that few) should ring a bell to you. Again, I am appalled and disappointed at you. 

Dear A.M. Costa Rica:
 

What's this? Now some are starting to get angry with Villalobos? Going to start looking for him? Maybe he's not the great guy that people have sworn him to be. This just gets better and better as time goes by. 

I still find it hard to believe that all of these people who invested with him have the nerve to blame anybody but themselves. Pure greed. Something that sounds to good to be true usually is. It all comes back to the fact that nobody knew how he made the money and nobody cared as long as he paid the interest each month. 

Every last one of you should be ashamed of yourselves. If Villalobos is so legit, where the hell is he? And then there are some who still swear about his impeccable character and lofty morals! 

What a bunch of bull****! You deserve to lose your money for being stupid and greedy. Quit pointing fingers at prosecutors and different governments and go to the nearest mirror. You'll see who's really to blame. 

Luis Enrique Villalobos Camacho

Our reward offer is $500

By the A.M. Costa Rica staff

This newspaper seeks the prompt return of two men who ran high-interest investment operations that have gone out of business.

Luis Enrique Villalobos Camacho, 62, was associated with Ofinter S.A., a money exchange house, and with his own private investment business that had about $1 billion in other people’s money on the books. 

Villalobos closed his business Oct. 14 and vanished.

Louis Milanes operated Savings Unlimited and several casinos in San José. He left the country with other members of his firm the weekend of Nov. 23. He may have as much as $260 million in his possession.

Both operations catered to North Americans. Villalobos had about 6,300 customers. Milanes had about 2,400.

Villalobos is the subject of an international arrest warrant. Milanes is not yet named in such a document, although a case has been opened against him in Costa Rica. Associates of both men have been jailed.

A.M. Costa Rica has posted a $500 reward for information leading to the detention of either man with the hopes that others will make similar pledges. The newspaper believes that investors only will see some of their money when the two men are in custody.

Milanes has few supporters in San José. On the other hand, as the letters on this page show, Villalobos still has supporters who believe that he will reappear and settle his debts. They believe he is in hiding because of a predatory Costa Rican government.

House-sale plans
included ‘Brothers’

Dear A.M.  Costa Rica:

I have read the stories of the luckless investors with The Brothers over the past several months, and thought how tragic and scary it all was. Scarier still, because it could have been me, had it happened just a little later in the year! I had plans to invest the proceeds of the sale of my home in the U.S. with The Brothers. I am awfully glad the house didn't sell in time to go through with my plans!

I didn't write in order to gloat over my near-miss, though! Much to the contrary, I wanted to say how much I admire the spirit of those who lost their savings and income with The Brothers, and who now refuse to give up without a fight. I would also like to offer an opportunity for them to recoup some of their losses. You see, I am in the business of selling property in the Playa Negra area of Guanacaste, and wish to move a certain 20 hectares very quickly at the amazing price of $4 per square meter. 

Any person who brings me a successful buyer will be paid $1,000 cash per each hectare sold, at the closing of each sale. Time is of the essence to me, because I stand to gain more than money from these sales. I seek to secure 250 acres of land for a sustainable/self-sufficient eco-community project I hope to begin building next year, and the sale of these lots will finance my endeavor. I say, let us help one another to a more prosperous and secure 2003!

Please write to me at WaterSpryt@aol.com or call me at (506) 658-8457 if you would like to help. Thanks, and good luck this New Year!

Brightest blessings! 

Dear A.M. Costa Rica:

I still find it hard to believe that you offered a reward in yesterday's [12/19] edition for information leading to the capture of Enrique Villalobos. With that offer, you abandoned any semblance of credibility as a source of objective and responsible journalism. Taking a position editorially is one thing. Heading a lynch mob is another. 

Dear A.M. Costa Rica:

I am really dismayed that you would treat Enrique Villalobos in the way you have done. I thought perhaps your paper might understand that a man is not guilty until proven so to be. This may happen, if necessary, in a fair court where the accused can answer charges. 

No charges have been laid, and this because no evidence has been found of wrongdoing after years of investigation and what seems to be an attempt to get Enrique guilty or not! The fact is that Enrique´s reputation is impeccable. There are not hundreds, but thousands of people who understand quite clearly that he is innocent, and that all these problems are the result of the powers that be in Costa Rica and their seemingly insatiable desire to destroy any competition including Enrique’s and his investments. 

It is usual for the unbiased media to also take the position, "Innocent until proved guilty," but you have joined the witchhunt along with the corrupt authorities. Not only that, but you have the gall to offer a reward for his capture as though he were a common criminal. 

I get the distinct feeling that you are upping the pressure to keep up the readership and your ratings, this, along with your unfounded personal dislike of a man who you do not know at all. You should re-think your position and decide whether it is worthwhile to lose whatever respect there is left for your newspaper just to generate readership. 

My thought is that your plans will backfire, and you will end up losing your readers. 

We are seen to be
fighting on dark side

Dear A.M. Costa Rica:

You should be very careful whose side you get on in a war! In the Bible it says "that no weapon formed against me, will prosper." And that the enemy will tremble when God’s army assembles. Sr. Villalobos is a God-fearing man. He is on the side of what’s right, not the side of who's right. God will watch over him just like he promised to do. He will not let any man harm him. I think that you should reconsider who's side you want to be on during this war. As for me and my household, we will be on the side of the Lord. 

Have a blessed day. Jesus is coming!