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Billion Dollar Dupe |
Writer Phil Higgs fell for a
crackpot investment scheme and decided to get his money back.
to get
his money back.
Maxim, October 2003 (www.maximonline.com)
The voice at the end of the line is slow and foreign. “I wish to
speak with Filipo,” it croaks.
“That’s me.”
“You are looking for information about the Brothers, yes?”
Yes, yes. I don’t know much about the Brothers -Osvaldo and Luis
Enrique Villalobos - except that they may have ties to Oliver North
and Contra comandantes, and until recently they ran a crackpot
investment scheme out of Costa Rica worth an estimated billion
dollars.
I’ve come to Costa Rica to settle a little score, something I hope
the man on the phone can help me with: Fifteen thousand of that
billion was mine. Last October one of them walked off with it, and I
aim to get it back.
So how did the deal work?
You “loaned” the Brothers a minimum of $10,000, and they paid you
three percent interest - monthly. Thirty six percent annually. Forty
two if you let it compound. Investments of more than $100,000 were
common, and a couple of yahoos invested a million or more. I didn’t
meet one gringo in Costa Rica who wasn’t involved. The scam had been
going on for an incredible 20 years, which is why I trusted it.
But all good things come to an end, and the scheme was eventually
busted by the federales.
Turns out an unrelated investigation into drug money by Canadian
authorities led to a currency exchange run by Osvaldo, who was
eventually arrested. Enrique is still on the lam but pops up, Osama-like,
in e-mails to the press.
The Costa Rican government took over the investments and have
managed to recover only a small percentage of the total money. I
figure if I can find Enrique, maybe I can get paid. But where to
start?
The loan ranger
I set myself up with a rented cell phone in a hotel outside San José
and put out word that I’m looking for information on Enrique. The
phone begins to ring immediately as innumerable gringos crowd the
line, each wanting to tell me his story of life with the Brothers.
The business was run out of a shopping mall in San Pedro, a suburb
of San José.
There were very few requirements. Principal was to be invested for
at least a year. Investors were to speak rarely, if at all, about
the Brothers, and new customers had to be vouched for as trustworthy
and discreet. Across San José, scrotums wrinkled at the “in with the
locals” exclusivity of the scheme.
Officially, Enrique ran the investment side of things while Osvaldo
ran a licensed currency exchange next door. Once a month a line of
investors would collect their dividends. An entire shadow economy
had sprung up around them. With almost 6,300 investors, the Brothers
handed out a minimum of nearly $2 million in interest every month.
I wasn’t alone in my blind faith. Incredibly, nobody seemed to have
any idea how the house made money.
Theories ran rampant, everything from straight financial genius to
latter-day Iran-Contra shenanigans. One popular notion involved some
creative diddling with Latin American currency exchanges: A
money-changer in Colombia busied himself handing out Colombian pesos
for dollars and Deutsche marks, then air-freighted the hard cash to
a bank in the U.S., land of the minimally fluctuating currency.
From these accounts, the Colombian money-changers drew pesos from
ATMs in downtown Bogotá and sold them back to tourists. Somewhere in
there, sieved through the whims of currency supply and demand,
emerged massive profits that were split with investors. Until now.
O brother, where art thou?
I’m giving up for the day, heading into San José for a drink, when
the phone rings. It’s the Voice. The owner prefers to remain
nameless but divulges that he is the former ambassador of a country
in the Axis of Evil. “I have many interesting stories to tell you,”
he hints.
We arrange to meet in the lobby café of the Gran Hotel Costa Rica,
in downtown San José. The Voice turns out to be a tiny man of around
80; he wears a white hat and smokes a pipe. He pencils his name on
my notepad before proclaiming, “Napoleon has said that before every
battle, you must do one thing: take a leak.” He gets up and is gone
for what must be 20 minutes. Waiting, I watch the other gringos
check out the prostitutes ambling by.
When the Voice returns he sadly informs me that he “wouldn’t want to
know” where Enrique is hiding. On the plus side, he does know where
Saddam has his weapons of mass destruction… he’s been e-mailing
Donald Rumsfeld about it, but the bastard never replies! The whole
scene would be funny if it weren’t for two facts: (1) My $15,000 is
still missing and (2) the beach, where I could be surfing and
enjoying that drink, is a mere two hours away. Instead, I’m sitting
here wondering how the Voice got hold of Rumsfeld’s e-mail address.
A sure thing
San José is now crawling with lawyers and private investigators as
well as expats. One endless afternoon at a T.G.I. Friday’s, a
stubbly former PI from Arizona assures me he will “bring Enrique to
justice” using mobile command centers, night-vision goggles, that
sort of thing. He just needs high-dollar “sponsors.” He says, “This
is not some bad Clint Eastwood movie.” Yeah. It ain’t a good one
either.
Trekking around this beautiful country with its beaches, cheap
plastic surgery, legalized prostitution, and surfeit of pretty
women, it’s easy to understand why 41,000 North American expats -
taut-faced retirees, dazed trust-funders, bong-loaded surfers - now
live here. The Brothers made life in the sun possible for lots of
them.
I powwow with operatives from groups that want to sue the Cost Rican
government, others who hope to force it into an international court
of arbitration under the auspices of the World Bank, and loads of
folks who are happy simply to wait for Enrique’s return, perhaps on
a bank of clouds from which he may once again shower his riches. The
only certainty is that Enrique - whether he’s in Baltimore or the
Bay of Biscay - ain’t coming back, and neither is my money.
Thoroughly dispirited, I finally do what I should have done on day
one: head for the beach. The guy who rents me a surfboard asks me
what I do. I tell him I’m investigating a financial scandal that’s
messing with a lot of people here. He laughs: “The Brothers, huh?
Yeah, I know about them. Dude, the stories I could tell you about
the Brothers…”
I’m happy to have contributed to Central American folklore, but I
sure would’ve preferred getting my money back. As I paddle into the
ocean, I ponder how much better it feels getting soaked this time
around.
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