Sunday 22 May 2022

Luis Milanés dies in ‘poverty’ in Mexico, leaving a fortune in Costa Rica

After defrauding more than 500 investors, Milanés fled the country to avoid a 15-year sentence; it is estimated that he had a fortune of US$200 million and many of his assets are in legal dispute

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21 May 2022 - At The Banks - BCCR

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QCOSTARICA – The name of Luis Ángel Milanés Tamayo-Coto is perhaps the second most recognized name in the ex-pat community of two decades ago, many of whom invested millions of dollars with the man and his financial company, Savings Unlimited, in return for a monthly payout with an interest of almost 3% monthly.

On June 19, 2008, Luis Milanés arrived at the Juan Santamaría airport in Alajuela, extradited from El Salvador, where he was arrested after six years on the run. Photo by Eyleen Vargas

Born in Cuba, hence the nickname “The Cuban”, the controversial businessman, became relevant in Costa Rica in November 2002, when he disappeared after, and without notice to his investors, closing the offices of his financial company, Savings Unlimited.

The closure and his disappearance flight left more than 500 investors in uncertainty, who lost an estimated US$200 million dollars, but perhaps much more, attracted by the payment of juicy interest.

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Almost two decades later, after avoiding paying his investors and Costa Rica’s justice, it transpired that Milanés died on April 25, 2021, in the state of Jalisco, Mexico.

“Death came from a sudden heart attack. He died in a situation of extreme poverty, which you cannot imagine,” confirmed his lawyer José Pablo Badilla Villanueva, last Wednesday to La Nacion.

Read more: Luis Milanes A Free Man, Appeals Court Overturns His Conviction

An international arrest warrant weighed on Milanés. He had yet to serve a sentence of 15 years in prison in Costa Rica, for the crime of aggravated fraud, in its continuing crime modality, for failing to pay the investors of the financial company. That ruling became final on February 8, 2018, the date from which no one knew of his whereabouts.

Read more: Milanés “The Cuban” Sentenced to 15 Years Prison For Fraud

This week, in addition to what Badilla said, a note sent by the Attorney General of the Republic of Mexico was added to the judicial file 11-000068-0532-PE, confirming the death of this 72-year-old man.

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“Death data. Date: April 25, 2021. Time 3:00 pm. Location: Colonia La Calma, Zapopan, Jalisco. Cause of death: Acute myocardial infarction,” summarizes the document issued on December 23, 2021, by the General Director of the Civil Registry of Mexico, Jesús Méndez Rodríguez.

Luis Milanés during the trial that took place in 2015 when he was sentenced to 15 years in prison, alleged that his health was affected. Photo by (Alonso Tenorio)

With his death, the criminal prosecution ends, but in parallel, the dispute over his millionaire estate was reactivated, which at some point was estimated at US$200 million; however, the real figure never came out.

From what was known, it was learned that it was made up of US$1.2 million in cash and 11 properties, of which nine have already been sold; among them, the building of the renowned Hotel Europa, located in downtown San José.

Interested in obtaining the assets are 486 people who lost the money invested in Savings Unlimited, as well as the heirs of Milanés, or those who can demonstrate a legitimate interest in the estate, intervene.

Fraud, conciliation and flee

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The judicial case on Luis Milanés was always impregnated with strange situations and complaints from the victims. There were delays in resolutions, unfulfilled agreements, changes of defense lawyers and a series of situations that delayed the judicial process for many years.

Milanés, a very skilled man for business, fled the country after the scam was uncovered in 2002.

He was captured in 2008 in El Salvador and extradited to Costa Rica, where he remained in prison for a few days and then was released due to his failing health, his lawyer at the time argued on behalf of his client.

In April 2012, after a series of negotiations, Milanés and a group of investors agreed to a conciliation, to which the businessman accepted a sentence of three years in prison and promised to return part of the assets.

However, other investors who did not accept the judicial agreement, challenged it. The conciliation was annulled and a new trial was ordered, which concluded in December 2015, when Luis Milanés was sentenced to 15 years in prison.

For fear that he would flee the country, the judges ordered preventive detention (remand) while the sentence was in the process of being firmed. But that ruling was annulled on June 6, 2016, and, immediately, Luis Milanés was ordered to be released.

It took almost two more years for the sentence of 15 years in prison to be confirmed. First, there was a resolution of the Third Chamber of the Court of April 28, 2017, and, later, another of the Court of Appeal of Criminal Sentence of Goicoechea of ​​February 8, 2018.

In criminal file 11-000068-0532-PE there is a note from the Mexican Attorney General’s Office certifying the death of the businessman.

However, by that time Luis Milanés had already disappeared. again.

On August 13, 2019, and at the request of the Deputy Prosecutor for Economic Crimes, the San José Criminal Court issued the international arrest warrant, which became null and void on February 21, 2022, due to the death of the accused, according to judge Lorena Blanco Jiménez.

Fortune awaits owner

In the case of the assets, it is known that when the judicial conciliation was made, Luis Milanés handed them over to be managed through a trust by the company Global Trust Firm S.A. and that the lawyer José Pablo Fernández Narváez would be in charge of distributing them among the 486 investors. Some of them benefited with the sale of the properties, but it was not known how much they managed to recover.

In addition, after the trust was created, the conciliation failed, a situation that caused Milanés – through his lawyer José Pablo Badilla – to sue the State, since in his opinion he had reached a judicial settlement in which he promised to return the property with the condition of not going to jail, but when the agreement was revoked and he was sentenced to 15 years, they had to return his property.

“I have a lawsuit filed in the Contentious Court requesting the return of all the assets. Luis Milanés made a conciliation for $15 million, he paid everything that the conciliation said and he only owed about US$300,000, but they put him in jail for that US$300,000 and I am of the theory that if the conciliation failed, they have to return the original assets that he put,, said José Pablo Badilla, who added that the claim will be continued by the heirs of Luis Milanés.

Precisely, this lawsuit is processed in file 14-004707-1027-CA of the Contentious Administrative and Civil Court of Finance and is against the company Global Trust Firm S.A., which administers the trust.

In this regard, José Pablo Fernández, head of the trust, said: “The death of Luis Milanés does not completely affect this process, because the trust exists independently of the death of the person who founded it. The trust is like a corporation, it is an autonomous patrimony, it is not part of the trustor. In this case, Global Trust Firm S.A. is the company that is in charge of the remaining properties, which are only two that remain pending sale.

“What affects the final operation is the lawsuit that Luis Milanés has against the State and Global Trust Firm SA, where he is asking for the return of everything he delivered because the conciliation was declared unsuccessful and, in the end, it was condemned.

“In that civil file the death of Luis Milanés is not recorded, but we are managing to have it certified. Once that death certificate can be verified, that would cause the special power granted to José Pablo Badilla to expire and therefore he would not be able to continue representing him. However, there is the possibility that a person with a legitimate interest could open a mortuary, José Pablo Badilla himself, become the executor of the assets and continue with the process.”

The dispute is ongoing and the end has a reserved prognosis, because depending on the strategies of the lawyers, the issue could be settled in a few months or take about 10 years.

The article is translated and adapted from La Nacion and with files from QCostarica and Inside Costa Rica (the writer’s former publication.

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