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MILANES SURRENDERS HIMSELF

One of Cost Rica's most sought men, Luis Milanes, surrendered himself to law officers Thursday afternoon at Juan Santamaría airport. He faces an allegation of fraud. Milanes, who closed down his high interest Savings Unlimited operation in November 2002, was accompanied by his lawyer, Álvaro Jiménez.

Milanes was trying to enter country on fake passport
By the A.M. Costa Rica Staff

Luis Ángel Milanes Tamayo was on his way to Costa Rica when he was caught in El Salvador Thursday. But he was trying to slip into the country with a fake passport, said the International Police Agency (Interpol).

The immigration police in el Salvador at the nation's international airport told officials here that Milanes presented a Costa Rican passport with the last names of Rodríguez Martínez. Supposedly the bearer of the passport was a Cuban who had been naturalized as a Costa Rican. Milanes himself is a Cuban naturalized as a U.S. citizen.

When confronted with the fake passport, Milanes produced an expired Cuban document that bore his real name, said Interpol. Once that name was run through the computer, Salvadorian police saw that Interpol five and a half years ago had posted a red notice signifying that the man was a fugitive.

In fact, Milanes was one of the men most sought by Costa Rica, accused of heading a long-running, high interest fraud scheme that preyed on mostly U.S. and Canadian clientèle.

Salvadorian officials immediately deported Milanes on TACA Flight 621 that arrived at 2:30 p.m. at Juan Santamaría airport. Agents of the Dirección de Inteligencia y Seguridad-Interpol and the Judicial Investigating Organization were waiting.

There was no secret that Milanes spent part of his time as a fugitive in El Salvador. Agents went there in search of him recently, according to a judicial source. But they had no luck even after staking out several dwellings for long periods.

Milanes made overtures to the prosecutors handling his case in the last few months through his lawyer, Álvaro Jiménez of Escazú. Some 435 creditors had sought criminal action against Milanes. That is far fewer than the 2,000 or so who gave him substantial amounts of money in the expectation of a 3 to 5 percent return of interest a month. A court document said that these 435 persons represent some $40 million in lost investments. The number of active litigants is believed to have been reduced over the last five and a half years so that there may be just half that many seeking restitution.

The special prosecutor in the case, Alfredo Araya Vega, is believed to be very close to filing formal charges against other persons associated with the Milanes financial operations.

It is Costarican Savings Unlimited, a Panamá corporation, that was doing business here as Savings Unlimited on the 11th floor of Edificio Colón. The operation was called informally "the Cubans" because of the heritage of Milanes and others.

Also being investigated in the case, according to court documents, are:
Enrique Pereira Oceguera, general manager of Savings Unlimited; Michael Gonzalez Espinoza, the manager of accounts; José Victor Poo, identified as a supervisor of the operation; Enrique Pereira Sila, auditor general; José Milanes Tamayo Coto, the brother of Luis Milanes, who worked as the general manager of an associated company; Mercedes del Carmen López Blandon, a former Milanes housekeeper who rose to a position of confidence in the operation, and José Adolfo Somarribas Arias.

Somarribas and Enrique Pereira are believed to be fugitives.

Recently added to the persons being investigate
is Herman Zango Milgram, a man court papers allege hide money for the Milanes operation. His deposition shows many trips outside the country. He has denied the allegations.

In all, the Milanes operation has about 47 separate companies, said court papers. Investors were led to believe that Milanes owned the Hotel Europa, the Hotel Royal Dutch, the Hotel Costa Rica Morazán, the casinos Europa, Tropical, Royal Dutch, Majestic, La Condesa and the Tobby Brown beauty shop chain. All but the Royal Dutch actually were rented properties, said court papers. Many investors thought they were part owners of the hotels and casinos.

In fact, many of those named in the case continue to operate these casinos and have done so since Milanes vanished Nov. 25, 2002, although there may have been changes in ownership.

Milanes was believed to be in custody Thursday night after a meeting with prosecutors. Interpol listed his offense as money laundering, but court papers say fraud.

Although today the idea that a company can pay 3 to 5 percent interest a month on investments seems unlikely, when Savings Unlimited was in operation from 1999 to 2002, there were at least five similar firms offering about the same deal.

The most well-known was the Luis Enrique Villalobos operation in Mall San Pedro. He was secretive about what he did with the money and paid his investors each month with cash stuffed in an envelope. He required a $10,000 initial investment.

Milanes required $5,000, although many investors gave him much more. His operation also was more formal with a cashier's window and elegant etched glass entry doors. While Villalobos gave his investors Bibles, Milanes and his associates frequently would take investors to casinos and bars. The sour employees of Villalobos were in contrast to the beautiful female workers at Savings Unlimited.

Many investors had money in several of these companies, but they all seemed to experience trouble after law officers raided the Villalobos operation and the Ofinter S.A. money exchange houses identified with his brother, Oswaldo Villalobos Camacho. Oswaldo Villalobos has been convicted of fraud and illegal banking. Luis Enrique Villalobos still is a fugitive.

Milanes told reporters at the airport that he feared for his life. But he made a clean getaway because he vacated his offices and destroyed all the paperwork on the weekend before he left San José.

Although his creditors quickly branded Milanes as a fraudster when he left, some Villalobos creditors organized in an effort to frustrate the Costa Rican government's criminal actions against the brothers. Some still believe Villalobos will return to distribute their money that he has been guarding carefully from a larcenous government. But their numbers grow fewer.

Local police agents investigated a few of the Villalobos investors because they feared some may act violently against then president Abel Pacheco.