RICHMOND, VIRGINIA – Costa Rican businessman Minor Vargas, who is facing federal fraud charges in the United States, says he is confident that he will be found not guilty, according to his son Rolando Vargas, who recently spoke to his father where he is being held at Northern Neck prison, outside of Richmond, Virginia.
“Each time I see [my dad] he is stronger and more confident that this whole thing will be cleared up,” Rolando Vargas said.
U.S. federal agents arrested Minor Vargas, president and CEO of Costa Rican-based Provident Capital Indemnity (PCI), on Jan. 19, along with auditor Jorge Luis Castillo, in an alleged $670 million insurance industry scam. The two were arraigned on seven counts each of conspiracy, wire fraud and mail fraud charges. Both men plead not guilty and requested a jury trial (TT, Feb. 9).
During his fourth visit with his father since he was arrested, Rolando Vargas said his father requested he tell other members of his family that, “I love them very much.”
If convicted the two men could face 20-year prison sentences.
According to U.S. public defender Jeffrey Everhart, the presiding judge declared it a “complex” case, meaning a trial date would likely be pushed back from April 12 to sometime in August. Everhart requested more time to review the many documents entered into evidence in the case.
A plea bargain would mean the two men could still face a 20-year sentence, but Everhart said it is likely that a guilty plea would result in a reduced sentence.
Castillo, who was born in Costa Rica but is a nationalized U.S. citizen, has been living with his wife and children for the past 20 years in a New Jersey suburb. His family insists that he is innocent. His wife, Zaida Soto, described him as a “very humble and hard-working father that always supported his family.”
Soto said her husband, like other immigrants in the U.S., took the jobs he could get, working in restaurants while he studied English. He learned accounting and became a public accountant, she said.
“He always wanted to better himself so that he could provide more for us,” said Soto, who was fighting back tears as she spoke with The Tico Times outside the Virginia courthouse where the two men were arraigned.
While Castillo could face a 20-year prison sentence, because he was an outside auditor he will likely face a lesser sentence of 12 years, and if convicted could be released in as few as five years with good behavior, according to a legal analyst consulted about the case.
Since his arrest, Minor Vargas’ family has been reclusive. Castillo’s family, however, has repeatedly expressed their anguish over the case. They also have harsh words for members of the Costa Rican press, who they say have, “treated us very badly by publishing stories that aren’t true,” said Castillo’s cousin Luis Lora.
“[The press] has crucified [Vargas and Castillo] without even giving them a chance to go to trial,” Lora said.
Lora said he believes Castillo was an unknowing participant in the scheme. Both men are charged in the same civil and criminal cases, and are facing the same charges. But they have different lawyers to prevent “conflicts of interests,” said the legal expert, who asked to remain anonymous.
In January, the U.S. Securities and Exchange Commission filed a civil suit seeking emergency relief “to halt a massive and ongoing fraud” by PCI, a Costa Rica-based company that offered financial guarantee bonds on life settlements and claims, according to the SEC lawsuit.
PCI allegedly promised to pay death benefits if a policyholder lived beyond an estimated life expectancy. The company had offered the policies in the U.S. and abroad since the mid-2000s.
The SEC claims that Vargas and Castillo “misrepresented PCI’s ability to satisfy its obligations under those bonds by making material misrepresentations about whether PCI’s financial statements had been audited, the assets that backed PCI’s bonds, PCI’s credit rating and the availability of reinsurance to cover claims on PCI’s bonds.”
Because both men are considered flight risks, a judge will likely deny them bond and conditional release.
Meanwhile, the accused and their families await the next step in the case – a new hearing to set a trial date.