San José, Costa Rica, since 1956

U.S. jury convicts Costa Rican man in $485 million insurance fraud case

A federal jury in Virginia, in the United States, convicted former insurance executive Minor Vargas on Monday of all counts in a $485 million fraud scheme in which he was accused of lying to clients and investors about the financial stability of his company, CBS News reported.

Vargas, 60, was president of Provident Capital Indemnity Ltd., a company that sold bonds guaranteeing funding for life-settlement companies, which buy life insurance policies from insured people at less than face value and collect the benefits when those people die.

The U.S. government said Provident sold $485 million in bonds based on fraudulent financial statements. According to prosecutors, Vargas not only misrepresented the company’s assets but also lied when he told clients, investors and regulators that Provident was protected by reinsurance agreements with major companies.

Vargas faced one count of conspiracy and three counts each of mail fraud, wire fraud and money laundering. He is scheduled for sentencing Oct. 23 and could face a maximum sentence of 170 years in prison.

In Costa Rica, Vargas became a publicly prominent person by founding magazines and newspapers. He was also involved in professional soccer as president of Saprissa, one of the top teams in the country.

He later bought two soccer franchises and began a synthetic turf business that won several contracts for replacing soccer fields for local professional teams.

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