Milanes fraud trial might begin July 1

Saving Unlimited investors are expecting a trial of Luis Milanes to take place starting July 1.

This would be nearly 13 years after Milanes closed up his high-interest borrowing operation in Edificio Colón and vanished for six years.

Milanes, a prominent casino owner, is accused of fraud involving some 500 investors. The Poder Judicial puts the amount at $46 million.

The trial date was set last September, the judicial workers are making arrangements now. But it may be a false alarm.

The complicated trial could be derailed by illness or other court cases.

Milanes entered into an agreement with most of the investors to pay back some of the money by surrendering property, including the downtown Hotel Europa.

Lawyers formed a trust that has been handling expenses and receiving money, including rent for the casino until it closed last year. Some investors have complained that they have not seen any financial reports for three years, so the exact status of the trust is uncertain to them. Some properties have been sold with the proceeds going to the trust.

Milanes, a Cuba-American, is in poor healthy, and he might not be physically able to attend the trial. Any number of unanticipated motions might also cause long delays.

Milanes has been successful in prolonging the judicial case as well as staying out of jail. He returned to Costa Rica in June 2008 to face the legal process and managed to spend just one night in jail. While he was gone, his casinos operated normally.

Lately some of the casinos have been sold or closed.

Last year a judge said that Milanes did not live up to the agreement he reached with his investors, so the trial was ordered. That put the entire conciliation process in limbo.

Milanes was one of a handful of high-interest operations in Costa Rica until 2002. His was considered a more professional operation when compared to a similar scheme run by Luis Enrique Villalobos. The Savings Unlimited offices was in a building also populated by embassies and other enterprises. There was a cashier window and smartly dressed, mostly female employees, working in the view of the visitors. The entry door was an elegant work of etched glass.

Milanes told his visitors the money they gave him would be invested into casino development. They would be given walking tours through the nearby Casino Tropical. There is some question whether the casinos were owned by the corporations that accepted the investor money. That is a point likely to be argued at trial.

By contrast, Villalobos operated out of a back room to the family’s money exchange business in Mall San Pedro. He declined to say exactly what he did with the money entrusted to him, although at times there were comments about factoring. He paid his creditors with envelopes stuffed with cash every month.

Villalobos gave his investors Bibles and was a member of the International Baptist Church in Escazú.

Although both firms closed down about the some time, some loyal Villalobos investors for years expected him to return and make good on the money he owed, which may have been as much as $1 billion. The investors in the Milanes firm were less generous.

Prosecutors raided the Villalobos holdings, and some of the papers seized in these operations were key evidence in the conviction of Oswaldo Villalobos, a brother, on allegations of aggravated fraud..

The Milanes office was cleaned out completely of all furniture and paperwork. The lack of documents might present a problem for the prosecutors in any trial.

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