The impending trial of Osvaldo Villalobos, only a few weeks away, looks to move the drawn-out saga of the Villalobos brothers one important step toward some sort of conclusion.
But while many of the thousands of investors left high and dry by the brothers wait for the sluggish justice system to take its course, a camp of Villalobos supporters has launched a campaign to get affected parties to drop their legal claims of fraud against the two.
Osvaldo, and his brother Enrique, whose whereabouts have been unknown since 2002, face charges of money laundering, fraud and illegal financial intermediation stemming from the defunct high-stakes investment operation known as The Brothers, run out of an office in eastern San José.
For 15-20 years, The Brothers paid on-time, monthly payments of 2-3% of investments, which in the later years were accepted only in sums of $10,000 or more. It has never been clear what was done with the money to earn such high returns.
Many said there was no way a legitimate operation which The Brothers claimed to be
could show such a high profit, and the government charged it was laundering funds.
In July 2002, Costa Rican officials raided The Brothers offices and froze nearly $7 million in bank accounts in a joint investigation with the Royal Canadian Mounted Police, who believed a Canadian drug trafficking ring laundered at least $300,000 through the operation (TT, July 12, 2002).
The Brothers continued to operate after the raid, and accepted more deposits until October 2002, when the office closed and Enrique vanished, allegedly with as much as $800 million of investors money. Osvaldo, who stayed behind and was arrested shortly after, claimed to know nothing about his brother s investment operation, saying he only handled a currency exchange business in the same office. Osvaldo was held in prison and house arrest for nearly two years before being released (TT, April 1, 2005).
Supporters of the Villalobos brothers insist that the operation was legitimate and as soon as the charges are discarded, Enrique will return to Costa Rica and repay what he owes. A Christian known to give generously to his church, Enrique openly displayed his faith with investors. His supporters now use almost religious terminology when calling on the faithful to await Enrique s return, when they will be rewarded for their loyalty.
The United Concerned Citizens and Residents (UCCR) a group led by European expat John Manners claims to be in communication with Enrique and has published alleged letters from him in which he preaches patience and promises to return (TT, March 12, 2004, Aug.19, 2005, Aug. 18, 2006).
He cannot come back and pay people as long as the money laundering (charge) is against him, Manners said this week. If the government would lift that charge, he would come back. That s all he wants.
Not everyone has such faith.An estimated 600 or more former investors have filed individual complaints of fraud against the Villalobos brothers with the Prosecutor s Office, encouraged by the prosecutor handling the case, Walter Espinoza, and private attorneys. These so-called filers have now become the target of a campaign launched by the UCCR and other Villalobos supporters.
Manners insists that the campaign is simply intended to speed the trial along so the charges of money laundering can be proven unjust and Enrique can return.
We are concerned only with the speed of the trial so it comes to resolution and matters can progress, he said. Every filer will delay the court process for a day. They re just going to delay the process.
Joining the UCCR in its efforts is the Web site www.villalobosreport.com, a blog whose author (Roger Gilderglast, according to the site s registration) dedicates daily messages to arguing why filers should drop their cases, claiming that those who do not drop their claims will never be paid back. The author also makes clear that the effort is aimed at destroying the prosecution s case.
We re getting pretty close to cutting Walter Espinoza off at the knees with regard to this phony fraud charge that he fabricated. Please join in and do what you can to help make this happen, reads one post from Jan. 11.
The site also posts a list of names of supposed filers, including many of their phone numbers and street addresses, plus a script for callers to read from as they attempt to convince filers to withdraw.
We are on our way to a MELTDOWN of the fraud charges against Enrique, and hope to see a PayDay in Springtime 2007 . 75% of the filers have already dropped their claims.
Of the original 742 claims originally [sic] filed against Enrique, only about 187 remain, the script reads.
Manners, of the UCCR, states there is no connection or affiliation with villalobosreport, though both parties claim to be in contact with Enrique. Manners questions the numbers posted on the Web site, saying there is no way to know how many people still have fraud complaints, but says they share the same goals of getting the claims dismissed and seeing Enrique return. E-mails to villalobosreport site administrator were not returned by press time.
Patricia Bliss, an investor who says she lost $75,000 when Enrique disappeared and a filer whose name is listed on villalobosreport, said she receives phone calls weekly from different people attempting to convince her to drop her claim (denuncia, in Spanish).
These people are claiming that if everyone removes their name, we will get our money back. I say call me when I m the last one, Bliss said. There s strength in numbers. With these denuncias, we said we were damaged by this. What s our message to the court now? We weren t really damaged? Bliss, a 16-year resident in Costa Rica, originally from the United States, says that every caller says approximately the same things, including an assertion that if she doesn t remove her claim, she will never get her money back.
The Tico Times attempted to speak with prosecutor Espinoza about the upcoming trial, which starts Feb. 5, and the campaign against the filers. Espinoza, however, refused to answer any questions, maintaining the Judicial Branch s tight-lipped, reticent stance when it comes to this case.
Rainer, an Austrian expat who requested his last name not be used, is a former investor and a regular, outspoken member of the irccrforum, an online Yahoo discussion group dedicated to the Villalobos case. He says he had money with The Brothers for seven years and lost about $1 million when Enrique vanished. Rainer says he trusted Enrique to the point of investing another $18,000 with him after the government had raided The Brothers offices.
A founding member of the UCCR, Rainer quit the organization early in 2003 because he didn t approve of the hiring of José Miguel Villalobos, a lawyer and former Justice Minister (no relation to the Villalobos brothers) hired by the UCCR to advise the group and pursue its legal interests.
Rainer said he felt hiring any lawyer was throwing money away, because the group was not going to trial.
The Austrian believes the letters the UCCR says are from Enrique are fakes, intended to rally its members into donating more money to the organization to pay its legal fees.
They tell people stay the course, that Enrique will come back, he will pay, he only has to be cleared by the court. What will he pay? Rainer asked. I don t say that I m right. I would rather get my money back. I m just against giving people the hope of the returning Jesus. Jesus didn t take our money.
Enrique left and I was fortunate I did have some money left, but a lot of people didn t have anything.
