Villalobos Brother Remains in Detention

July 23, 2004

PRESUMED a flight risk, OsvaldoVillalobos, brother of the man who operateda multimillion-dollar high-interest loan operationthat closed in late 2002 after a policeraid, has had his preventive prison orderextended until the end of August.In jail for more than a year and a half,during which he was under house arrest fortwo months because of poor health (TT, Feb.13), Villalobos has not yet been formallyaccused of a crime. Before the extension, hispreventive detention order would haveended April 28.Meanwhile, his brother Luis EnriqueVillalobos is still wanted by Costa Ricanauthorities and International Police(Interpol).Police have so far failed to track him,though he is listed on Interpol’s Web site aspossibly dangerous, an international fugitivewanted on charges of fraud, money-launderingand illegal financial intermediation (TT,Dec. 24, 2003).LUIS Enrique and Osvaldo Villalobosran a high-risk investment business called“The Brothers” and a currency exchangehouse for at least 15 years. The bottomdropped out on the unregulated business afew months after police raided it in July2002.The Canadian Royal Mounted Policetold Costa Rican officials they suspected thetwo of laundering drug money from Canada.Investigators raided the brothers’ officesand Osvaldo’s home on July 4, 2002, seizingdocuments, computers and more than$300,000, sparking panic among the 6,000-plus investors who had loaned “TheBrothers” a minimum of $10,000 apiece inexchange for monthly interest returns of 2.8-3% (TT, Nov. 14, 2003).After the business closed in October2002, Luis Enrique disappeared andOsvaldo was taken into custody.Some investors had deposited their lifesavings in the business. Prosecutors frozeabout $7 million in funds deposited inaccounts linked the “The Brothers,” JudicialBranch spokeswoman Sandra Castro said.WHILE no one can say with accuracyhow much of clients’ money is missing,some say as much as $1 billion may havevanished when the business shut down.Prosecutors sent requests for informationto banks in 169 countries seekingaccounts in the name of the Villalobos brotherswithout any luck, Castro said.Castro told The Tico Times last week the$7 million were unfrozen in late January andstashed in an account of the Penal Court ofSan José at a bank whose name was not disclosed.The money will remain there, shesaid, until after Osvaldo’s trial or release.Though the money is “unfrozen,” theinvestors cannot touch it, rather, it willremain in the bank collecting interest, Castrosaid.She also said it is unclear whether theinvestors will be able to collect the interest itis earning now.

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