Villalobos backers plan a belated suit against Costa Rica

Villalobos backers plan a belated suit against Costa Rica


By the A.M. Costa Rica staff


The moribund group of Villalobos supporters has sprung to life against and resurrected the idea of suing the Costa Rican government for cracking down on a ponzi scheme.

The informal group, which has the name of United Concerned Citizens, Residents & Friends of Costa Rica, contains the dwindling number of former investors who expect Luis Enrique Villalobos to show up in 2012 and hand back the money he took.

In an Internet posting and in a posting to its Web site, the group said it wants to hire a local lawyer to sue the Costa Rican government. The lawyer is David E. Romero Mora, who said in an accompanying report that he thinks the former investors have a high likelihood of success in the suit, according to the group.

There are certain problems. Luis Enrique Villalobos is still an international fugitive if he still is alive, and his brother has been sentenced to 18 years for fraud and accepting money illegally for his role in the scheme.

Some investors have talked about a suit since the July 4, 2002, raid on the high-interest borrowing operation and the money exchange houses operated by the Villalobos family. This is not to be confused with a suit already in international arbitration in which other investors blame the Costa Rican government for not cracking down soon enough.

The trial of Oswaldo Villalobos failed to establish the outline of a legitimate business operation with which Luis Enrique Villalobos was able to pay his investors about 3 per cent a month. The high interest attracted investors from all over but mainly from North America. Some investors had up to $16 million in the scheme.

According to the group, the lawyer ruled out negotiations because that would involve Luis Enrique Villalobos showing up, going to jail and entering negotiations. Villalobos fled Oct. 14, 2002, after faxing an explanatory message to A.M. Costa Rica. Periodically United and Concerned Citizens claim to have received letters from
him, but most observers dismiss them as a forgery. Villalobos did sent a New Year's Eve 2002 e-mail to A.M. Costa Rica in which he said that if he were jailed no one would get anything. It came from Guatemala.

Some of the United and Concerned Citizens are convinced that Villalobos will return in 2012 after the statute of limitations on the crimes expire and distribute investments for those who kept the faith. They claim that he cannot now do so for certain technical banking reasons. Romero is quoted as confirming that Luis Enrique Villalobos will be off the legal hook July 4, 2012.

In the past, Villalobos supporters have raised a number of arguments against the law enforcement action that triggered the end of the scheme. The Oswaldo Villalobos trial disclosed that the operation had been under investigation for years. The United and Concerned Citizens strongly urged investors not to join the criminal action against Oswaldo Villalobos, and some who did not were miffed when the court awarded money judgments to those who did join.

Losses to Villalobos investors may have been as much as $1 billion. Prosecutors have estimated the loss at $600 million. Some have applauded the action by prosecutors and investors because it kept many more victims from losing their money.

This is not the first time that the United and Concerned Citizens has sought to hire a lawyer. Two weeks after Luis Enrique Villalobos fled, hundreds of investors met at the downtown Holiday Inn. Some agreed to pay what amounted to $150,000 for a lawyer who later ran for president. Little came from that effort.

The current effort is more modest. The organization is asking from $25 to $100 from those who would like to join the legal case. The amount depends on how much they lost.

". . . filing a lawsuit could eventually facilitate a political negotiation with the new government, as it may have an interest in negotiation to prevent a potential sentence against the state," said the organization.