Villalobos Brother Sentenced to 18 Years
"Eighteen Years Jail For Defrauding Gringos" was the morning headline in the local Spanish language newspaper describing the verdict of Osvaldo Villalobos Camacho, one half of the "Brothers" operation, handed down by a San José court yesterday afternoon.

Osvaldo Villalobos sat quietly listening to the sentence handed to him by judges Isabel Porras, Manuel Rojas and Juan Carlos Pérez, who found that the Villalobos brothers were so cynical that when a woman claimed her savings because she had cancer, they gave her a bible.

The afternoon court session took more than two hours to complete, as judge Manuel Rojas took the floor and using a microphone and a whiteboard, took on the task of explaining to the public the complicated and unusual case that they had before them and the evidence they uncovered to come to their decision.

Rojas described the "brothers" operation as a "paper society" and asked the question in the mind of many "where is the money?"

During the over two hour session, the justices also heavily criticized the role of the Superintendencia General de Entidades Financieras (Sugef) "plauing an opaque role in the case" and congratulated the prosecution for their job in untangling a complicated and planned fraud.

The court found that the total amount of the fraud added up to us$400.000.000 million dollars.

Judge Rojas, in his presentation, detailed the court finding on the "brothers" operation, explaining how the Villalobos brothers issued investors a cheque as a guarantee, cheques without a date, making them invalid and how clients were advised not to cash in the cheques and if lost would cost us$1.000 for its replacement.

The judge said that if the Villalobos brothers had intention to pay their clients, then why did they condition their commitment to pay, in his words "an honest man will make good on his commitment with no conditions".

The judges said they found no division between "Ofinter" - the money exchange business - and the "company" - the organization that took in investor deposits, that they two entities, though the "company" had no name, shared the same employees and resources and were located next to each other.

The court said it found no division of the business, as claimed by Osvaldo, and that the argument that his business (Ofinter) was separate from that of his brother, Luis Enrique, did not hold up to the evidence.

Judge Rojas, emphasized on several occasions that Luis Enrique Villalobos Camacho is a "profugo de justicia" - fugitive.

The Sala Tres de los Tribunales de Juicio de San José (the court) also found it unusual that a woman, who as being paid a salary of us$600 per month, was named president of Ofinter, but did not have an office or any duties. The court found in their evidence that the "brothers" had everything ready to flee in the case they were discovered.

Judge Rojas also explained the finding of an emergency plan called the "Sistema Alternativa de Emergencia" (SAE) which the brothers Villalobos had in place in the case of, well, going down. The plan included that Luis Enrique, the person behind the commitment to the depositors and the signature on the cheques, remain without any assets at any time - being judgement proof and that even after the intervention of the Ministerio de Seguridad Pública (MSP) in July 2002, the operation continued to take in deposits, this time using a "letra de cambio" instead of cheques, that called for no interest payments.

The judge used the words "pagando, pidiendo y tomando" (paying, asking and taking) as the basis of the Villalobos brothers operation and that it was not the MSP that closed down the operation, but the brothers themselves who closed the door, directing his words to the foreigners in the audience, who he said have blamed the administration of the whole mess and not where the fault really lies.

The judge said that the investors had been a victim of  the "Villalobos scheme".

Osvaldo Villalobos Camacho was found guilty of fraud and financial intermediation (or illegal banking), not guilty on the charge of money laundering and sentenced to 18 years in prison.

Osvaldo was taken away in handcuffs at the end of the session, where he will be held in preventive detention for the next eight months, the time it takes to process an appeal. The defence has 30 days from June 8, the date the court decision is firm, to file an appeal.

In addition to the sentence against Osvaldo, a number of those who filed civil claims were  approved and in some cases awarded damages.

The court decision yesterday has dashed the hopes of many of a payback of their investments and leaves uncertain what will occur next with their money and trusted friend, Luis Enrique.