Costa Ricans are of mixed minds about the jailing of the well-known businessman Minor Vargas Calvo in the United States.
In addition to his business interests, Vargas is a former president of the Brujas professional soccer team and continues a relationship with Barrio México, another first division team.
Some Costa Ricans have said that the United States is being too harsh in not letting Vargas return to Costa Rica on bail. He faces a fraud case involving some $670 million in bonds that prosecutors say are false.
The problem for Vargas is that Costa Rica’s Constitution does not allow the extradition of citizens. So if Vargas returned to Costa Rica he would have the option of remaining here along with several dozen other Costa Ricans who are wanted by U.S. authorities. However, Vargas also is being investigated here. Local prosecutors and investigators searched some of his business holdings earlier in the week.
El Diario Extra published a news story about Vargas Wednesday in which it recounted a day he might spend at his current location, the New York Metropolitan Correctional Center. The newspaper noted that he would be wearing an orange coverall and be sleeping in as bunk bed in the cold New York climate. He might relax by playing ping pong, the newspaper said.
Some of the business holdings maintained by Vargas discharged workers Wednesday. Vargas appears to have directly controled a lot of the business funds, and with him in prison there is insufficient money to keep the businesses open. The soccer teams are another matter. Others have taken control. However, one owner of a soccer franchise reported he was holding a bad check Vargas gave him just before leaving for the United States.
The U.S. indictment charges Costa Rica-based Provident Capital Indemnity Ltd., Vargas, 59, and Jorge Castillo, 55, each with one count of conspiracy to commit mail and wire fraud, three counts of mail fraud and three counts of wire fraud. The indictment also seeks forfeiture of more than $40 million from all three defendants. Vargas was arrested Jan. 18 at the John F. Kennedy International Airport, and Castillo was arrested Jan. 19 in New Jersey.
According to the indictment, Vargas, is the president and majority owner of Provident Capital, an insurance and reinsurance company registered in the Commonwealth of Dominica and doing business in Costa Rica. Castillo, a resident of New Jersey, is the purported independent auditor for Provident Capital. If convicted, Vargas and Castillo face up to 20 years in prison on each count.
The defendants allegedly engaged in a scheme to defraud clients and investors by making misrepresentations about Provident Capital’s reinsurers, Provident Capital’s financial statements and Provident Capital’s Dun and Bradstreet rating, in connection with Provident Capital’s marketing and sale of financial guarantee bonds to companies that sold life settlements or securities backed by life settlements to investors, the government said. Provident Capital’s bonds were marketed as a way to eliminate one of the primary risks of investing in life settlements, namely the possibility that the individual insured by the underlying life insurance policy will live beyond his or her life expectancy, it added.