Costa Rica has long been a destination for people from the developed world who have sought a new life in a moderate climate. Year round temperature are in the 70s and 60s, and when much of North America is battling snow and ice, Costa Rica offers nearly endless blue skies. Social policy has for decades been favorable to tourism. English is also widely spoken, particularity among young people in the capital of San Jose.
The majority of those who come to Costa Rica, either to retiree, study or blow off steam for a while are good people. They have worked hard in the United States, and are looking for relaxation or a lifestyle change. Topics such as yoga, natural foods and alternative medicine are popular. The Pacific coast is a magnet for surfers and party people.
Problems occur when the so expat turns out either to be a Grifter, or realizing there is little or no way to earn a living, turns to hustling the other expats. Common scams include real estate frauds and boiler operations where victims in the United States are persuaded to send money.
One such operation was the $8.3 million advance lottery scam run by the Canadian Giuseppe Pileggi. His group specialized in contacting elderly Americans in the United States and bilking them out of savings. He was convicted in 2011 and is serving 50 years in federal prison. Many of his accomplishes were also captured and convicted, but at least one man, Andreas Roman Leimer remains free because as a naturalized Costa Rican citizen he may not be obligated to leave the national territory.
Sport books operate in the margins, are not technically illegal in Costa Rica, but their owners and employees are subject to extradition if U.S. authorities bring a case against them and they are not Costa Rican citizens. The most high profile arrest of a book operator was in 2009 with David Carruthers, CEO of BETonSPORTS plc. FBI agents had handcuffs waiting for him when he arrived with a connecting flight at Dallas-Fort Worth International Airport. Hundreds of call center workers lost their jobs when this happened.
Long time expats talk bitterly of the investment scams in Costa Rica, which were popular prior to the establishment of financial oversight and banking transparency in 2002. Part ponzi scheme and money laundering operations paid high yield interest in the style of Bernie Madoff. Many victims reinvested their earnings, and very little money has ever been recovered.
The brothers Villalobos collected perhaps as much as $800 million by 2002. Enrique Villalobos disappeared and his young brother Osvaldo Villalobos was convicted and sent to prison. A similar operation run by Cuban national, Luis Milanes under the name of Savings Unlimited bilked expat investors for $200 million. Milanes returned to Costa Rica after being a fugitive for several years and is trying to negotiate his way out of prison. Even smaller operations had names like AAA and the Vault, the later run by Roy Taylor who put a bullet in his head.
Although financial regulations tightened up post 9/11, many smaller real estate scams continued well into the millennium. These days, however the larger land deals and higher value real estate are wrapped into trusts, which are controlled by banks and attorneys. It’s a big difference from the days when expats traded cashiers checks and corporation documents in the lobbies of banks.
Costa Rica may still occasionally be a sunny place for shady people. However, aggressive enforcement of immigration rules, banking regulation and more due diligence in the real state market have changed the rules of the game. Shell corporations, which many flawed expat guides still recommend as a way of setting yourself up in Costa Rica have become increasingly expensive to operate and no longer protect the anonymity of its owners. It’s only a matter before time before this practice disappears as well.
The few scams that make the news today involve much smaller sums of money, and increasingly inane setups such as fake private detectives and conspiracy theorists. Their names, probably aren’t worth mentioning.