Quietly and with no publicity former investors in the Brothers Villalobos high interest scheme have been trying to hail members of the family into court.
The rationale was that the family members and close associates shared in the benefits of the money generated by the operations that the investors now consider a fraud. This is the case that has been spearheaded by investor Derk Van Dyk.
A number of participants in the case are those who believed that Luis Enrique Villalobos Camacho would return from his self-imposed exile and pay off his creditors. Many held that view even as the brother Oswaldo Villalobos Camacho was detained, tried and sentenced to 18 years for aggravated fraud.
Other investors recuperated some money because they joined in the case against Oswaldo.
Now Van Dyk is reporting to his following of investors that a new prosecutor, Eida Solis Loria, is asking that a judge dismiss the case. The reason is the lack of proof and the expiration of the 10-year limit on prosecution, according to her filings.
The collapse of the Villalobos organization began July 4, 2002, when investigators raided the various offices and some private homes.
Van Dyk told his fellow plaintiffs that a judge may accept the prosecutor’s interpretation or may reject it. If the judge rejects it, he said the private investors’ case against the family members would continue. This is allowed under Costa Rican law.
A lawyer working for the investors has filed a brief contesting the prosecutor’s determination.
This is the last of a series of cases against the Villalobos organization. He was the leading figure in high interest organizations in the 1990s and early 2000s in which investors
earned up to 3 percent a month on deposits of $10,000 or more.
There even was an unsuccessful effort to bring Costa Rica into the World Bank’s arbitration system for its failure to regulate the high-interest operation.
The prosecutor, in her filing, provided a detailed study of the case and described efforts by the Villalobos brothers to transfer funds to Europe and also to corporations in Panamá. She also provides a list of many investors and the amounts they gave the brothers, who were using the corporation name of Ofinter.
The prosecutor’s filing also disclosed that the Villalobos operation had some $305 million in U.S. banks at one time.
Compounding factors are that Oswaldo already has been convicted and that his brother, Luis Enrique, is still absent.
Many investors rolled over their monthly interest payments. and A.M. Costa Rica once estimated that the loss amounted to some $1 billion when Luis Enrique closed the offices and left in November 2002.
Many investors were impressed by the religious tone of Luis Enrique and that he made substantial donations to churches. They believed he had been targeted by Costa Rican banking interests or government officials. They nurtured the hope that he would return to pay them off.
Some investors still believe that.
The raid on the Ofinter operation was the beginning of the collapse of a string of high-interest operations in the Central Valley. Some, like The Vault, operated by Roy Taylor, accepted money from customers and invested with Villalobos for a slightly higher return, according to a copy of his financial books in the hands of A.M. Costa Rica.
A survivor in all this is Luis Milanes, who operated Savings Unlimited. He vanished about the same time that Luis Enrique did. But he returned to Costa Rica to face his investors in 2008. The result has been a complex web of legal proceedings seemingly endless, and Milanes remains free.