November 11 - 17, 2002     · News Index

· Repopulating  downtown San Jose
· Deputy hopes  Villalobos will  negotiate
· Zapote with no Bulls this year
· ICE service fails
· Poverty and  Joblesness is the challenge
·  Riteve has problems
· News Briefs



By the A.M. Costa Rica staff

Any effort by creditors to track down international assets of Luis Enrique Villalobos Camacho quickly comes up against several big problems.

First, there is no existing legal action, criminal or civil, that would give creditors the right to probe into foreign bank accounts.

But the larger problem may be the extreme difficulty of simply tracking assets internationally. A long string of high-profile asset searches sanctioned by governments shows how difficult.

• Peru wants upwards of $2 billion believed stashed by former President Alberto Fujimori and associates including Vladimir Montesinos. The country is seeking to hire special international asset tracking firms. Fujimori fled to Japan two years ago.

• In nearby Nicaragua, officials are seeking to locate some $100 million believed taken by former President Arnoldo Aleman, who left office this year.

• The Philippines may have recovered about $2 billion from the family of Ferdinand Marcos, but officials estimate they missed perhaps $5 to $8 billion more. Marcos fled the country in 1986.

• The Shah of Iran is believed to have illegally taken up to $30 billion during his tenure.

• Carlos Menem, former Argentine president, is accused of taking some $10 million in bribes during his term, and the country is trying to verify this claim.

• A handful of Asian and African ex-dictators have been the object of similar asset investigations, and the results have been minimally successful. The Abachi regime in Nigeria is believed to have taken $5 to $6 billion.

• So great is the difficulty in recovering assets that some international officials believe the United Nations should take a lead role and set up a special office.

The granddaddy of asset searches kicked off Sept. 11, 2001, when Osama bin Laden was designated 

One outcome of the U.S. effort was a series of treaties and agreements that expedite to some extent international asset searches.

The major problems with such asset searches include bank secrecy, hidden corporate ownerships and the possible use of holding companies, foundations, trusts and charities. Investigative expenses also can be burdensome.

Panamá to the south has strict bank secrecy laws that permit disclosure only in selected felony cases. A string of Asian island states, principally Nauru and Vanuatu, still are considered good places to hide assets. Grand Cayman may have nearly $1 trillion on deposit and is relatively insulated against prying eyes.

Other former tax havens, like the Isle of Jersey, have signed on to the international effort toward swapping information among governments.

There has been no evidence yet that assets of the Villalobos operation are anything but safely invested. But creditors are getting anxious since the businessman defaulted on interest payments in early October and adopted a low profile.

Costa Rican bank accounts, some 50 frozen by judicial order for investigation, contain only about $6 million of an estimated $1 billion loaned to him.  A lot of creditors are hoping for a thaw in the freeze Nov. 26, but others are examining their legal options.

International experts on asset recovery note that countries like Costa Rica provide an advantage to unhappy debtors. Under Costa Rican law victims can join with any criminal case to seek recovery.

If the bulk of the Villalobos assets fails to turn up, a criminal case brought against Villalobos for illegal banking or violation of money laws might be a boon to creditors who could then join with the government in seeking return of their cash assets. Prosecutors are exploring both options.