Villalobos Trial – first Milestone of significance on a long road

Tomorrow, Monday February 5, 2007, the long awaited trial against one of the Villalobos Brothers begins.  This year is also going to mark the fifth anniversary of the collapse of ‘The Brothers’, a dubious financial enterprise with carefully guarded roots and a secretive business plan that was operated by three Villalobos-Camacho brothers; Enrique, Osvaldo and Freddy.

While Enrique and the middle brother Osvaldo were involved with the daily operations in Costa Rica that included the acceptance of deposits and the monthly cash disbursements of interest to investors, Freddy, the fraternal Benjamin, was located in southern Florida from where he mailed interest checks to United States and Canadian investors through Pak Mail Plus on University Boulevard in Coral Gables. Checks drawn on Whitney, SouthCoast and AmTrade Banks were sent from this location at a steady and seemingly profitable rate to 'friends of Enrique". United States legal authorities, those located in Miami in particular, have contributed the results of their extensive investigations to their Costa Rican counterparts in preparation for this trial.

Back in San Jose, Enrique was not only the oldest; he was also the most visible of the threesome. Former clients state that he would greet many investors at his office charmingly and pepper them with biblical buzzwords. While the humble beginnings of this enterprise bore no resemblance to the final operations conducted out of San Pedro Mall located near the Costa Rican capital of San Jose, his confidence and personal appeal are attributed to the prevailing of this business for over two decades.

Initial operations began around 1979 from a hangar at the Pavas Airport and then moved to an indistinct old building within the city of San Jose, across from the National Bank. In the late nineties, The Brothers’ business suddenly became a high profile, storefront establishment in Mall San Pedro, a modern shopping center in this suburb, facing a busy traffic circle with a huge fountain in its center.

The current whereabouts of Enrique and Freddy remain unknown. Attorneys involved with Osvaldo’s defense team place Enrique in the Middle East or Eastern Europe, mainly because of the nationality of Paula, his current second wife and former secretary. Osvaldo remains in San Jose where he, unwittingly or deliberately planned, walked into the offices of the OIJ after his brother’s disappearance and was arrested.

The growing popularity of the Brothers financial plan, if one can call it that, caused similar operations to sprout that closely imitated the Villalobos’. After the fleeing of Enrique, the disappearance of Freddy and the arrest of Osvaldo, these copy-cat enterprises quickly collapsed, the owners vanished and in one case committed suicide.

The people impacted by the collapse of these apparent financial card houses are not just individual investors. People who have never heard of The Brothers or the country of Costa Rica are unwitting victims.
A California based hedge fund is on record as having invested in excess of eight million dollars with The Brothers and a Tennessee based financial management group similarly involved their clients to the tune of an estimated 6 million dollars. Both operations have cease and desist orders in place against them by the States of Washington and Tennessee, respectively and the Attorney Generals of Florida and Tennessee have been investigating as well.

Reeling from Enrique's disappearance and the manila wrapped interest bundles of dollars was the congregation of the International Baptist Church in Escazu. Initially housed in humble quarters, this group managed to build a house of worship so grandiose, it exceeded expectations of most. Enrique Villalobos was not only a member of this church but also a very significant contributor. Some people say that they were aware that key people in the church, at regular intervals, received boxes filled with cash from The Brothers. Those involved remain non-responsive to inquiries.

After the collapse of The Brothers, many of their estimated 6289 investors simply vanished. An estimated 1200 of them stayed informed through e-mails and Internet discussion groups organized by fellow investors. A Villalobos support group calling itself UCCR (United Concerned Citizens and Residents of Costa Rica), claims to have 600 to 700 members and has been instrumental in the massive reduction of claims filed against the Villalobos’ by encouraging its membership to withdraw these. According to a UCCR spokesperson, this campaign has reduced the amount of ‘denuncias’, or claims, from over 700 to less than 100 today.
UCCR continuous to promote the concept that Luis Enrique Villalobos-Camacho will eventually return and pay back his creditors, perhaps as soon as after the conclusion of Osvaldo’s trial. In mailers, this organization also urges its membership to refrain from drawing attention to themselves and this trial.

According to statements made to the media by the prosecutor in this case, Walter Espinoza Espinoza, the Costa Rican legal system does not allow for the trying of anyone not physically present. Mr. Espinoza told La Nacion newspaper in 2006 that any case against Enrique Villalobos is on hold until he gets caught or turns himself in.

Enrique's mug shot has been featured for years now on the official website of Interpol.

The fact that Enrique is 'not technically' on trial may serve the Osvaldo Villalobos defense well. In turn, a possible exoneration or the legal equivalent of a ‘slap on the wrist’ because of time already served for Osvaldo could be advantageous to an eventual and future legal defense for Enrique.

Many observers anticipate Osvaldo’s trial to last in excess of 4 to 6 months. Besides the initial uproar the disclosure of the case’s evidence may cause, not too many surprises are expected.
Based on the preliminary hearings held in 2006 and in January of this year, the defense team seems to be prepared for a guilty verdict on some of the minor counts. While a conviction of Money Laundering is nearly unprecedented in Costa Rica, legal experts agree that because of globally imposed financial restraints and supervision after 2001, such a conviction should not be ruled out. They also believe that because of the Arias Administration’s desire to be accepted into western economical markets as an equal and the possibility of Costa Rica becoming a member of CAFTA, its judicial branch will have no choice but to take this into consideration.


Hank,
sky_boy@swbell.net