Supporters of fugitive financier Luis Enrique Villalobos thought they had scored a decisive court victory.
The informal group filed a law suit against the government of Costa Rica, asking in part that Villalobos be allowed to come home and pay them what he owes.
Lawyer David E. Romero Mora filed the case on behalf of the United Concerned Citizens & Residents. As the Christmas holidays approached, it appeared that the government had not responded to the suit within the required time. That would have meant that the court would accept the allegations that Romero made in the suit.
In an e-mail report distributed widely, United Concerned Citizens said that Romero filed a request Dec. 20 to have the government declared en rebeldia, basically being in contempt for failing to appear or to answer a judicial order.
Then came the Christmas holidays, and the courts closed for two weeks. The e-mail said that Romero expected a judge to respond to the request within eight days.
“When repeated visits to the courthouse by Attorney Romero or his assistant to review the case file did not disclose either the government’s reply or a resolution of our request for the declaritoria, Attorney Romero visited the judge personally on Jan. 26 and was told that the state’s legal department (Procuraderia) had, indeed, submitted its brief on time, and for that reason it was deemed unnecessary to resolve our request.’ said the e-mail.
The judge set Feb. 28 as the day for the preliminary hearing, said the e-mail, which added:
“Careful examination of the documents we obtained showed irregularities in their reception and dating at the courthouse. The judge acknowledged that discrepancies existed, but he insisted that everything was handled legally. We are not so certain.”
Nevertheless, the group said its members decided to go ahead with the case instead of making a fuss over what may well be a late reply.
The group has continually claimed that the investigative raid on the Villalobos money exchange house and other locations July 4, 2002, was illegal. Their claims were supported by an analysis by Romero.
Romero has said that he thinks the case against the government has a high probability of success.
Villalobos paid those who loaned him money up to 3 percent interest a month. Usually the money was paid in cash, and a number of U.S. citizens are known to have ducked income tax in that country.
The United Concerned Citizens group argues that the raid disrupted the Villalobos business and caused him and his brother to go out of business. Their suit will be hampered by the fact that the other brother, Oswaldo, has been convicted of aggravated fraud and illegal banking by a trial court that characterized the operation as a ponzi scheme.
The United Concerned Citizens opposed the criminal action against Oswaldo Villalobos and urged other investors to withdraw their claims. Many did and did not participate in the money awards that were part of the sentence. Many of the members of the group expect the fugitive Luis Enrique Villalobos to return and pay them off when the statute of limitations on the criminal allegations takes effect in 2012.
Perhaps as much as $1 billion was lost by investors when the high-interest scheme collapsed. Not only that, the crash reverberated through other similar schemes run by others during the early part of 2002.
For example, The Vault high interest scheme run by Roy Taylor, had substantial investments with the Villalobos Brothers. Taylor shot himself when police came to arrest him.
Luis Milanes closed his Savings Unlimited the weekend of Nov. 23, 2002, not long after Luis Enrique Villalobos fled. He, too, offered high-interest investments. Unlike Luis Enrique, Milanes returned to Costa Rica and spent just a day in jail. He continues to manage his casinos and is attempting to engage his creditors in a conciliation in which he would pay them some money and they would withdraw their charges.
Milanes claims an associate took all the money and ran off to Europe.
Romero has said that “The action of Costa Rican authorities, through a series of deeds completely corrupt and invalid, damaged all of these people who believed in good faith that Costa Rica had a rule of law protecting them.”
Among other requests, the legal case seeks to have Costa Rica freeze any possible actions against the fugitive Villalobos so he can return and pay off his debtors.
Although there have been claims to the contrary, A.M. Costa Rica does not believe that any messages have been received from Luis Enrique Villalobos by investors in the last seven years. He sent a fax to this newspaper when he decided to close down his operation, and he sent an e-mail Dec. 31, 2002, from Guatemala a few months later.
The fugitive surprised many by not showing up to support his brother when he was on trial. Luis Enrique’s wife divorced him and returned to her native Romania.
He was born April 24, 1940, so he will be 71 in three months.