Villalobos Investors Call On Canada For Assistance

by Carla Johnson, Investors Offshore.com

28 March 2003

A group of Villalobos investors in Costa Rica, headed by Jack Caine, is seeking assistance from the Canadian government in an effort to recover their lost investments, according to a report from online newspaper, AM Costa Rica yesterday.

Attorneys representing Mr Caine's organisation, the Class Action Center, contacted the Canadian Ministry of Foreign Affairs earlier this month, arguing that the Costa Rican government had neglected its duty to protect the investments of Canadian citizens who were among those that lost significant chunks of their assets when Villalobos fled the country last year.

In an e-mail sent by Mr Caine to Jean Senecal, the Vice-Consul of Costa Rica's Canadian Embassy, the former argued that 'whether the Villalobos brothers are innocent or guilty matters not to us, the CR government has been negligent either way and this is our case (with evidence) against them'.

Caine is calling for arbitration of the case by the International Centre for the Settlement of Investment Disputes, under Article 12 of the Bilateral Investment Treaty (BIT) between Canada and Costa Rica, which states that: 'If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted by the investor to arbitration.'

However, the AM Costa Rica pointed to several factors which could complicate matters with regard to seeking arbitration, not least of which is the fact that investors accepted post-dated checks from the fugitive financier, and these are the only evidence of the debt.

'Another possible problem stems from the fact that the Villalobos high-interest operation was not licensed by the government,' the online newspaper revealed, continuing:

'An adjacent money changing operation, Ofinter S.A., was licensed but the personal deals done by Villalobos were characterized as transactions among friends. Such friendly transactions may not meet the requirements for arbitration under a 1999 agreement between Canada and Costa Rica.'

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