Milanes case appears to be headed back to court

Casino operator Luis Milanes has defaulted on the payment arrangement that a judge approved to keep him out of jail.

A source close to the case said that Milanes was supposed to make a payment of about $1.1 million May 23 but did not do so.

A court hearing is scheduled June 25 and 26, starting at 8 a.m. where Milanes is expected to seek an extension of the payments.

Milanes was the operator of Savings Unlimited which failed in November 2002 and left 6,300 investors without their funds.

Some $200 million was involved.

Milanes fled and was a fugitive for six years and then returned after he appeared to have struck a deal with prosecutors. He served one night in jail.

He also is the owner of a number of casinos in Costa Rica.

Creditors have been engaged in a two-year court procedure. A judge eventually accepted a deal in which Milanes would turn over properties to a trust for the benefit of creditors and also sweeten the pot with cash. Among the properties is the Europa Hotel in downtown San José.

Creditors also are expected to raise the issue of the expenses incurred by the trust and a five-person committee that is supposed to represent the interests of creditors. Among the expenses is believed to be a
$40,000 rewiring job of the downtown hotel. Creditors are seeking an accounting via the courts.

A property worth $3.5 million was supposed to be part of the deal. Milanes was supposed to turn over this property in Santa Ana to the trust, but that never happened, said the source.

At least one property turned over to the trust has been sold, thereby generating some income for the creditors.

Also causing problems is the fact that some of the properties that Milanes pledged turned out to have liens on them. Apparently the titles were not searched fully in the Registro Nacional.

Under the best of circumstances, creditors who were part of a criminal case against Milanes were supposed to get about 20 percent of their money returned with the sale of property and contributions by the Cuban-American casino owner.

Prosecutors are reluctant to pursue a criminal case against Milanes because it would be long and complex.

In addition, Milanes cleaned out his Edificio Colón offices when he left town in 2002, so there is little evidence.

Milanes claims that the bulk of the money from the high-interest enterprise is in Europe in the hands of a former associate.

Milanes appears to be conducting business as usual in Costa Rica. He sometimes is seen on the streets of San José accompanied by armed bodyguards.

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