San José, Costa Rica, since 1956

Villalobos Investors Skeptical about Offer

THESE could be the days of reckoningfor a U.S. man who claims he willreturn $500 million to hundreds of jiltedinvestors with the Villalobos Brothers’high-interest loan operation.Stephen Waitman was ejected from hisoffice in Plaza Roble in Escazú, west ofSan José, yesterday, one week before thelast day he has said he will accept checksfrom investors to pay them back.According to a Plaza Roble managerwho asked not to be named, the managementis squeamish about being associatedwith the Villalobos Brothers.Waitman has stirred both hopes and outragethis month since he took out an advertisementthree weeks ago in The Tico Timesoffering former investors their money inexchange for a commission (TT, May 20).LUIS Enrique Villalobos, who operatedan allegedly illegal multimillion-dollarhigh-interest loan operation, has been afugitive from Costa Rican justice for morethan two years – with as much as $800million of investors’ funds in tow, someauthorities estimate (TT, March 14, 2003).The operation forked out interest paymentsas high as 3% per month for twodecades before it closed in late 2002. TheVillalobos brothers gave investors checks asa record of their deposits, which reportedlyranged from $10,000 to millions of dollars.His flight curtailed the possibility ofserving preventive detention, which hisbrother and business partner OsvaldoVillalobos endured for more than twoyears until last month when he wasreleased on a kind of parole. He is notallowed to leave the country before histrial for charges of money laundering,fraud and illegal financial intermediation(TT, April 1).The trial could begin next month,according to Judicial Branch spokeswomanSandra Castro.WAITMAN, who claims he has locatedthe fugitive Villalobos, is promising tohand over 85% of the value of an investor’scheck, after running a copy of the check byhis “check fraud crew” for a processing feeof either $50 or $100, depending on thedate of the check. He told The Tico Timesinvestors who have already providedcopies of their check would be paid theirmoney sometime in June, either in cash orthrough a wire transfer or a check from oneof his bank accounts here.Though at least one outspoken group ofinvestors is incredulous, Waitman told TheTico Times “hundreds” of investors (he didnot reveal the exact number) are using hisservices, including 107.5 FM radio DJDavid Scott, who gave Waitman a photocopyof his $21,000 check on air Tuesday.During the interview, Scott posedsome of the questions that are ranklingsuspicious investors, such as whetherWaitman is working for U.S. tax authorities,and whether Waitman will disappearafter June 3, the last day he will acceptchecks according to his advertisement.In response, Waitman told Scott he willnot disappear. He told The Tico Times hewill sign an affidavit for any investor consideringusing his service declaring that he isnot working for the U.S. government.ONE group of investors, the 650-strong United Concerned Citizens andResidents (UCCR), suspects Waitmanwants only the processing fees. 107.5 DJMargie Flaum pointed out that if only1,000 of the estimated 6,000 Villalobosinvestors gave Waitman $100, he couldearn up to $100,000, which is “not bad fora month’s work,” she said.Waitman, however, scoffs at thatamount of money, saying he stands tomake millions of dollars off the commissionshe is charging.He did not answer two of the mostburning questions his story raises: Howdid he find Villalobos, and how did he gethis hands on his money? He said he wouldanswer those questions after the payoutsare finished, though he didn’t say whenthat might be.His story presents another dilemma: ifit is true that he has Villalobos’ money,how will he get it into the country to payinvestors?While the penal process is under way,all money connected to the VillalobosBrothers can be confiscated by the government,according to attorney José MiguelVillalobos, a presidential candidate andofficial advisor to Osvaldo Villalobos’defense team (no blood relation).WAITMAN would have to clear thelarge amounts of money he promises todistribute to investors with the governmentfinance authority, the Superintendenceof Financial Entities (SUGEF),and prove its legitimacy, according to thelawyer, who says he is not convinced byWaitman’s claims.Waitman said he already began bringingin some of the money, and has clearedit with SUGEF, demonstrating that it is hisown, not connected to Villalobos. That ishow he plans to legalize all the funds,using his own financial records to justifythem, he said.The Tico Times tried to confirm thisinformation with SUGEF, but representativessaid the only person authorized to comment,Superintendent Juan Muñoz, would beout of the office until today. Waitman couldnot provide any evidence of the money.INVESTORS are understandablyskeptical. Some lost millions when theoperation folded, some lost their entire lifesavings, and one took his life (TT Jan. 17,2003). Since then, investors have endureda run of frustrated hopes and scores of conspiracytheories.In early 2003, a group of apparent scamartists told investors they represented aprominent lawyer for a group of investors,Ewald Acuña, and he had discovered $65million in Villalobos bank accounts (TT,March14, 2003). The people, who calledthemselves recruiters, said investors couldreceive some of those funds within threemonths if they handed over a copy of theirchecks and passports, signed over power ofattorney to Acuña, and paid a $500 legal fee.Acuña, who represents several hundredinvestors, said he had nothing to dowith the so-called recruiters.ONE retired investor and member ofUCCR, who asked to remain anonymous,this week said he gave Waitman a copy ofhis check and chose to waive the processingfee.Instead, he took Waitman up on hisoffer to take 30% of the value of the checkin lieu of paying a processing fee inadvance and a 15% commission.“I looked him in the eye and said, ‘youget me 70% and I’ll be happy to give you30%.’ I’m not calling him a crook, but I’mtaking it at face value,” the investor said.“It’s just too good to be true.”

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