Investigators detain a Villalobos wannabe who offered 8 percent a month

Saturday is the 13th anniversary of the police raids that began the downfall of the Villalobos high interest scheme.

That was the operation based at Mall San Pedro that offered 3 percent a month to a mostly U.S. clientele.

Although many creditors expected Luis Enrique Villalobos to return from hiding and pay them off, that never happened.

The creditors slowly are dying off.

The lesson of Villalobos appears to have been lost on many Ticos. The Judicial Investigating Organization said Thursday that a 34-year-old man has been detained in Barrio El Recreo, Turrialba, because he was running what appears to be a ponzi scheme that paid 8 percent interest a month.

Judicial investigators said there were 29 complaints and the total amount involved was 360 million colons, about $682,000.

The man faces allegations of illegal financial intermediation and fraud.

The suspect claimed to be a lawyer, agents said, but he was not. A parent is a lawyers, they said.

The man operated in the classic ponzi way by paying early investors interest with money obtained from later investors, according to the allegations.

Agents detained the man in an early morning raid, and then they also searched the family legal offices, they said.

News reports from the United States show that there are many such schemes, although probably not many with more than 6,000 creditors like the Villalobos operation. They may have lost as much as $1 billion.

Some Villalobos defenders still are hanging on and continue to blame the government and local banks for the demise of the high-interest operation. However, some have begun to find out if Luis Enrique Villalobos still is alive. The Ministerio de Relaciones Exteriores y Culto says it has no record of any overseas deaths by a man with that name.

Oswaldo Villalobos, best know as the operator of a money exchange business related to the borrowing of his brother, was convicted of aggravated fraud. He was acquitted of money laundering.

Editors and reporters were never convinced of the correctness of that legal decision. They thought that the Villalobos operation was designed to exchange dollars for Colombian currency mostly for the benefit of customers in South America. As such, it probably was legal, although prosecutors found instructions on how the brothers would handle a financial collapse.

This entry was posted in Costa Rica News. Bookmark the permalink.