So now the dog and pony show starts . The government of Costa Rica is holding a hearing behind closed doors which outcome could destroy the lives of thousands of innocent people . 

Of course, most of these people are North Americans who believed (wrongly) that the Costa Rica government was honest and would look out for them. 

Too late they are finding out that Costa Rica is just as corrupt as any other banana republic. 

The president of Costa Rica called us fools, and he is right. Any Gringo that goes to that country expecting a fair shake is a fool. The 600  people that let lawyers 

They have already got their sticky fingers on seven million dollars that you can bet your bippy will never be seen again . 

It isn't a total loss. I have learned to speak a different dialect of Spanish . It is the dialect spoken by Costa Rican politicians. For instance, the phrase  "Trust me " translates into "Screw you, gringo." 

Lawyers representing creditors in the Oswaldo Villalobos fraud hearing report that the first week has been procedural.

The judge at the preliminary hearing has been mapping out how the lengthy judicial process will go. Basically, each of the 30 lawyers involved in the case will have their own days in which to present their evidence. 

Mark Beckford Douglas, one of the lawyers, said he believes that the hearing will result in an order for a trial for the Villalobos brother and that the trial probably will begin this October. Others have predicted a much longer wait, although most agree that the judge will find that there is sufficient evidence for a trial.

Beckford is a lawyer with the Investment Recovery Center, which includes lawyers who were suing the Villalobos Brothers even before the high-interest borrowing operation went bust. He now represents 25 creditors, the majority from the United States and Canada. Some of his clients are Ticos.

The hearing is private, and for the time being only lawyers are attending the sessions.

Beckford will have his day in court Friday and said he will list all that he believes should be resolved in the case. He said he is
more engaged with civil action because he is interested in seeing creditors get a percentage of the money that is being held by the judiciary. Some $7 million in property belonging to Luis Enrique Villalobos has been frozen. 

Beckford said that even if the case against Oswaldo is successful the investors will only get a very small percentage of the money back that they invested. He said that he believes that this part of the case, the return of money to investors, will take up to two years because the courts are very slow in compensating victims.

The Villalobos Brothers had as much as $1 billion on their books when they closed the Mall San Pedro operation and several other branches Oct. 14, 2002. The brothers were the most visible of the high-interest operations that collapsed around the same time.

Costa Rican law allows victims to join with the prosecution of a criminal case to seek financial compensation. That is why the case has a civil dimension. Prosecutors are pressing fraud, money-laundering, illegal banking and conspiracy charges.

Only about 300 creditors of the more than 6,000 have filed as victims in the Oswaldo Villalobos case. Luis Enrique Villalobos is a fugitive so he will come to trial only if caught.

$7 million divided by about 300 litigants comes to a little more than $20,000 each.

Keith Nash is an elderly Canadian investor who tried to take his money out of the Villalobos operation long before investigators raided the offices July 4, 2002. Villalobos tried to get him declared mentally incompetent and claimed he was paying the medical bills of Nash. The Canadian rolled over his money until he had about $1.5 million on the Villalobos books.

Luis Enrique Villalobos wrote letters to his creditors in which he claimed that Nash’s son, a lawyer, was simply seeking his ailing father’s money. Many investors believed the Villalobos explanation and vilified Nash and his son, Michael, when they filed suit.

Villalobos went so far as to file a slander suit against The Tico Times when the weekly newspaper reported the case.

The lawyers representing Nash were well positioned to represent other victims when the operation went bust, and they started the Investment Recovery Center.

Other creditors chose an opposite approach. They blamed the government for closing down the Villalobos operation, and some still actively try to encourage those who have filed suit to drop their complaints.

Luis Enrique Villalobos hasn’t been heard from since he sent A.M. Costa Rica an e-mail in January 2003. Oswaldo Villalobos has been in preventative detention and, for a time, under house arrest.

The case has been declared a complex one, thereby giving prosecutors more time to obtain evidence.

Evidence has been obtained from the United States where the Villalobos Brothers maintained bank accounts. Costa Rican prosecutors requested via diplomatic channels the aid of the U.S. Justice Department. A federal judge in Miami invested an assistant U.S. attorney there with subpoena power and supervision of FBI agents who conducted an investigation and multiple interviews. This material has never been made public but it is likely to be presented at the preliminary hearing.

So far U.S. officials have not said one way or the other whether they have started their own investigation of the Villalobos brothers, although some creditors there report they have been interviewed by agents.

Oswaldo Villalobos was more closely identified with the Ofinter S.A. money exchange firm. Luis Enrique Villalobos operated his high-interest business in an office adjacent to the Ofinter storefront in Mall San Pedro. However, using material collected by the Judicial Investigating Organization prosecutors are claiming that Oswaldo Villalobos also was actively involved in the high-interest business.