Villalobos High-Interest Loan Case Developed

THE man who claimed to have caught multi-millionaire fugitive Luis Enrique Villalobos and promised to distribute $500 million of his wealth back to the investors who entrusted it to his high interest loan operation has not yet kept his word, nine months after telling The Tico Times he had made the capture.

Hundreds, possibly thousands of investors who lost their money when the operation folded in 2002 paid Waitman at least $50 each as a processing fee. Some told The Tico Times they paid as much as  $250. Waitman promised to verify the authenticity of their account statements and pay them out minus 15% for his trouble.

Investors’ reactions were mixed – some paid him but were skeptical he would come through, others were hopeful and others said it was a scam.

Osvaldo Villalobos, one of the two brothers involved in the operation, endured more than two years of preventive detention until April, when he was released on a kind of parole, not allowed to leave the country while his trial is pending. A court date has not yet been set.

The Villalobos brothers’ operation closed suddenly after what loyal investors say was a 15- to 20-year run of on-time monthly interest payments of 2.8-3% on minimum loans of $10,000.

Luis Enrique Villalobos fled the country with what authorities estimate was $800 million of investors’ money, shortly after police raided his offices in the San Pedro Mall and Osvaldo’s home on July 4, 2002, seizing documents, computers and cash, and later froze $7 million in Villalobos bank accounts in Costa Rica.

The raid panicked the more than 6,000 investors, and some of those say the freezing of the $7 million forced the Villalobos to close.

A group of more than 300 investors, led by U.S. citizen and former investor Jack Caine, is developing a case against the Costa Rican government for its handling of the Villalobos businesses, raid and freezing of the accounts. It will try to prove before the World Bank’s International Centre for  Settlement of Investment Disputes (ICSID) that the government was negligent in its failure to regulate the loan operation and reckless in its legal actions against the brothers in 2002. The group awaits confirmation of a hearing.