One reason crime pays in Costa Rica is that crooks can duck any penalty by taking a really long vacation.
The statute of limitations generally is the same period as the criminal code gives for the maximum penalty. This happens repeatedly. The International Police Agency has 69 persons wanted by Costa Rican judicial agents in its data base. Most would benefit by remaining free for an extended period.
Some investors are concerned that this might be the case with Rafael Ángel Medaglia Araya. He’s a lawyer who would face allegations of operating a scam on Costa Rican and U.S. investors if he ever is caught.
Depending on which act is counted, the statute of limitations for Medaglia might expire in just a few years. Victims recount tales of being hoodwinked starting in 2005.
Stephen Kochakian of Santa Domingo de Heredia still expresses surprise that the man he befriended, joined in fishing expeditions and considered a friend would take his money and vanish.
Kochakian is one of at least 13 victims who gave money to Medaglia, according to summaries of the case. The lawyer had an office in San José and offered clients with money a much higher interest rate than banks for those who participated in his mortgage scheme.
Kochakian said that the deals were successful because the original $700,000 he gave the lawyer grew to twice that, according to Medaglia’s accountings. The Heredia man said that the money represented all of his private retirement accumulations. Now he is living on Social Security.
Kochakian is a good example of what expats should not do. He did not speak Spanish when he was dealing with the lawyer. He said he would accompany Medaglia to homes where he was told the Spanish conversation would be about a mortgage. He admits that the discussions could have been about the weather.
He and others believed they were investing in mortgages. News reports said that the interest rate could have been as high as 24 percent.
Then when the expat was out of the country, the lawyer put a mortgage with a third party on Kochakian’s condo. To keep the property, the expat has to come up with the money to pay off the mortgage, which had been legally filed. The expat still was uncertain Wednesday if the lawyer had a power of attorney for the corporation owning the condo.
He said he just signed papers in Spanish that the lawyer kept putting in front of him. Although the expat was an easy target, other victims include savvy expat business people who did check filings at the Registro Nacional and who spoke Spanish.
Estimates of how much money was involved in the case vary, but with the contribution by Kochakian, the amount could be well over $1 million.
A source close to some of the investors said that none was willing to provide the money for an investigation to track down the lawyer. Some believe he is living in South America.
The International Police Agency, despite Jackie Chan movies to the contrary, is basically a big filing cabinet. When local police detain an individual, a computer check might show that a warrant had been issued in another country. Or local agents might make an arrest based on information coming from the country in which the crime is alleged.
In Costa Rica, Judicial Investigating Organization agents serve as INTERPOL contacts. They just picked up a man wanted in the Czech Republic on fraud charges. Sometimes a suspect is caught entering the country at an airport. The diligences of the of the computer search is up to the individual agents.
Even if the man returns to Costa Rica and appears in court, those who did business with him might not get much money. There may be a conciliation hearing, and charges will be dropped if the lawyer admits wrongdoing and makes token payments to the victims.
Luis Milanes Tamayo, the operators of the defunct Savings Unlimited, is scheduled for trial in October, 12 years after he vanished. He returned nearly six years ago, and the many individuals who put money with his high-interest firm have been involved in an unsatisfactory conciliation since.
Another well-known runaway is Luis Enrique Villalobos, who vanished in November 2002. Losses to those with money in his high-interest firm, known as The Brothers, may have been as much as $1 billion. That case was complicated by a core of die hards who kept insisting that he would return and pay off his faithful investors. The International Police Agency no long has his photo and data online.
Financial problems with lawyers are not confined to the Medaglia case. A.M. Costa Rica receives periodic complaints from expats who lost money because they entrusted the cash to a lawyer.
One woman gave a well-respected Limón lawyer about $15,000 for a land purchase. When he appropriated the funds, prosecutors told her that they would consider the money a loan and that the lawyer would remain legal if he made small monthly payments, she said.
In most cases investors who feel cheated have no recourse before the Colegio de Abogados, the lawyers’ professional organization. The colegio limits its investigation of lawyers to acts that took place in the exercise of the profession. Money lending and real estate dealings would not be included.