Rico’s TICO BULL (OPINION) The headline this Tuesday morning by the Diario Extra, the self-declared most read newspaper in the country, reads: “Javier Chaves habría ideado plan para estafar a inversionistas” – Javier Chaves had devised a plan to defraud investors.
The article written by María Siu Lanzas says that “Javier Chaves” used the reputation of Aldesa as founder and manager of the Bolsa Nacional de Valores (National Securities Exchange), as well as one of the companies that contributed to the development of the Mercado de Valores de Costa Rica (Costa Rican Stock Market).
Lanzas writes, “He achieved through the existing functional link with the companies that are part of the Grupo Financiero Bursátil Aldesa (Financial Group Aldesa), an entity regulated by the Sugeval, to mislead investors.
“He used the same website, the same brands, the same emails and the same phone numbers. It was the perfect plan for investors to make their assets available to the Aldesa Group.
For these alleged actions the Ministerio Publico (Public Prosecutor) and a couple of the investors I spoke to since Monday, considers that there is a high probability that Chaves had committed (allegedly) fraud, that led to search and seizure action by authorities carried out Monday.
Chaves, who is the husband of the still minister and coordinator of the government’s Economic Sector, Edna Camacho, who on July 1 will step down to represent Costa Rica before the Inter-American Development Bank (IDB), was arrested Monday night and after spending the night in the Goicoechea (San Jose) court jail was freed on self-recognizance on Tuesday, with the condition of that he cannot leave the country.
Chaves was taken from his home in Escazu Monday morning, one of 12 locations raided by the OIJ, and was kept under guard by judicial investigators while his office was being searched.
Ties to Chaves
What we learned since is that Aldesa board of directors, each of whose home was also raided on Monday, but none were charged, did nothing.
The Prosecutor’s Office intends to determine the inaction by the Board of Directors of Grupo Bursátil Aldesa, composed of Eduardo Ulibarri Bilbao, Óscar Chaves Bolaños, Diego Artiñano (director), Mario Montealegre, Carlos Oreamuno, Luis Mesalles, Lanzo Luconi and Priscila Pacheco, pointing them out as those who would have “consenting” this situation in relation to the stock exchange position.
The following chart indicates the relationship of the directors and managers of the Aldesa company to Chaves and the relationship to Aldesa of Chaves’ wife, Edna Camacho, as mentioned before the current Minister of the Economy; Rocio Aguilar, the current Minister of Finance and former director of Aldesa; Luis Carlos Delgado, current president of the Conassif, the National Council of Supervision of the Financial System and who is related to Chaves; and Francisco Campos, who is Chaves’ lawyer and who just happens to be the husband of Emilia Navas, the current Fiscal General (Attorney General).
The Sugeval
One of the locations raided on Monday was the Sugeval, the General Superintendency of Securities. But why? This is the entity in charge of overseeing the stock market and the agents involved, including the Aldesa Puesto de Bolsa.
The Prosecutor’s Office is trying to determine is there was a breach of duties, fueled by reports that there was an alarming backwardness in the obligations in terms of the actions being carried out by the Aldesa Financial Group.
There are questions as to when and to what extent did the regulator know of Aldesa’s financial problems and was there any “fraudulent or culpable” action. Investigators also want to know what were the measures carried out by the Sugeval to mitigate the risk of confusion to investors? Did Sugeval exercise its true role?
False reporting
Another aspect of the investigation of the Prosecutor’s Office is the fact that Lucía Fernández, general superintendent of Securities, reported irregularities detected in Aldesa Puesto de Bolsa, but unfortunately not until the end of 2018 when the case began to be reported by the media.
Investigators are delving into reports that Chaves was aware of the insufficient funds in the accounts of the Sociedad Aldesa Puesto de Bolsa, where at the end of each month, falsely reported to the Sugeval, that the balances in accounts receivable had decreased considerably at the end of the month, balances that the first two days of the following month increased again.
This was all contained in the document justifying the search and seizure action by the Fiscalia.
Up to 30 years in prison
Chaves is accused of having commited six crimes, two major that carries a huge fine and up to 30 years in prison – major fraud and Fraudulent administration and four minor, issuing NSF “not sufficient funds” checks, authorization of improper acts, authorization and publication of false balances and breach of duties.
Major fraud (Estafa mayor): It is classified in the Criminal Code and involves a maximum of up to 30 years in prison is the amount of fraud exceeds 10 times the “salario base” (base salary). The current base salary is ¢446.200 colones.
Fraudulent administration (Administración fraudulenta): The penalty is up to 30 years in prison and occurs when contracts are altered to the detriment of the person to whom they delivered to.
The case file number is 9-157-1220-PE.
“Everyone will get paid”
Francisco Campos, Chaves’ lawyer, on Tuesday, said the raid and charges were predictable, given the pressure on social networks and media and assured that his client maintains he will not leave the country and will not avoid justice.
The lawyer insists that, as his client has repeatedly said, “the liquidity problem is temporary because there are assets and that there is enough for everyone to get paid.”
“Everyone” is the some 500 plus investors who entrusted to Chaves nearly US$200 million dollars in return for earnings of interest of 10% annually.
Closing argument
Was Aldesa a total con? Will the investors get paid? From the looks of it yes and no. But time will tell. A few months back Chaves presented to the courts a 3-year plan to liquidate the company’s real estate holdings and pay back his investors, meanwhile keeping the wolves at bay.
The San Jose bankruptcy court rejected the plan, leaving investors in limbo, some deciding to file a denuncia, while others waiting, hoping, staying positive, in the continued belief that Chaves will make good.
Of the two investors I spoke to on Tuesday, one, a long time investor (more than 10 years), with more than US$300,000 at stake is keeping alive the hope of getting his capital back and maybe even the interest.
The other, with a similar investment, made only months before the Aldesa problems became public was one of the first to file a formal complaint. Although there is a glimpse of some hope of getting his money back, the hope is not in Chaves, but, rather, in the judicial system.
