Costa Rica Scams – US Judge orders the extradition of Gerald Joseph Latulippe to face fraud charges.

In June 2008 we wrote that many US investors in Costa Rica are today hoping that US citizen Gerald Latullipe aged 64, who has been wanted by INTERPOL for a long time, is brought back to San José to face allegations that he defrauded approximately 150 people out of at least US$100 million.

Gerald Latullipe and his company Principal Services which had offices in Torre Las Mercedes on Paseo Colón, offered 4% per month returns to their investors during a time when Costa Rica had many firms like the Villalobos Brothers, Savings Unlimited, the Genesis Fund, Costa Rica Green and a few others all offering the same ‘too-good-to-be-true’ returns.

It was in May 2006 when it all started coming apart when Michael Forrest, aged 64 was arrested as he walked outside his Heredia home. He was arrested because of his involvement in a fraud – “a high-interest” investment “program” called Principal Services. Yes! Their promise of 4% per month for investments of over US$10,000 generated a high level of interest.

I first met Michael Forrest, a Canadian, in 1999 when he was an employee of one of the largest coffee companies in Costa Rica and we bumped into each other at social gatherings from time to time after that until he disappeared.

When he started working as a commissioned sales agent for a company called Principal Financial Services, I grilled Michael Forrest about how his boss – Gerald Latullippe – could claim to generate such outrageously high returns.

At the time I was finishing up my first book; Costa Rica’s Guide To Making Money Offshore in Bull & Bear Markets and felt that this would make a good addition to chapter two entitled ‘When It Sounds Too Good To Be True…’

Forrest told me that his partner would supposedly use investor’s money to buy companies in trouble, rebuild them and then sell them for a handsome profit.

Not being a shy, wall flower type of person, I pointed out that buying distressed companies was not always profitable, rebuilding companies can take a VERY long time and that selling any kind of business wasn’t exactly an overnight process so liquidity could possibly be a problem for clients who might wish to sell their investments.

Having been a professional, Wall Street trained investment advisor for over two decades, I have a vague idea of how much work and ‘luck’ it takes to make a good living as an investment advisor.

But Michael Forrest assured me that all was well and drove off in his brand new Land Rover which is a very expensive car in Costa Rica. To this day, I do not know for sure if Michael Forrest genuinely believed if this strategy was legitimate or not.

And as it turned out, it was indeed too good to be true and after spending two years in detention, the beginning of Michael Forrest’s retirement has been very, very different to what he had anticipated. Having lost a mere 100% of their investments, their investors are not happy either.

However, according to Mauricio Brenes, the defense lawyer for Mr Forrest in an email sent to us on 9th June 2008: “Mr Forrest is a free man, having been acquitted of all charges, as he was found not guilty of any criminal wrongdoing by virtue of the Tribunal de Juicio de San José ruling N° 477-2008. The ruling found Mr Forrest to be simply an investor who also acted like an agent – pretty much in the same way as many of the plaintiffs themselves.

Interestingly, Mr Latulippe, Mr Elwyn Jacobs and Principal Services S.A. – a company unrelated to Mr Forrest – were found by the Tribunal de Juicio to be the sole obligees to pay the investors their money back – in spite of the fact that no Principal Services representative was tried as they remained at large at the time, due to the inability of the Costa Rican prosecution to extradite them from the United States since 2004.

Having proved his own innocence, Mr Forrest now applauds the arrest of Mr Latulippe, so that he can finally be confronted by all of those he affected, including Mr Forrest himself.”

A surgeon in Florida, David Mackey, 66, even tried to hire a hit man to find out where Latullipe might have hidden money and then to kill him.

June 2009 News Update.

A U.S. federal judge ordered the extradition of Gerald Joseph Latulippe to face charges of fraud in Costa Rica…

Costa Rica Scam #2:

Costa Rican law enforcement officials also put an end to another, much larger scam involving fake lottery tickets being sold to senior citizens in the USA. Three US citizens and two Canadians were arrested in Costa Rica and, five additional people were arrested in California.

This was a much larger operation allegedly involving as many as 200 Costa Ricans as telephone callers where people in the USA were told they had won a lottery but, to collect their winnings they would have to wire a 1% “tax” to Costa Rica before their winnings would be released. When someone thinks they have won $300,000 all of a sudden, it becomes easy to come up with $3,000 to pay the “tax.”

A judge authorized three months detention for the five persons agents say were the ringleaders. Those five were identified as Martin Kalchstein, 60, a US citizen and Brian Wall Coyle, 52, another US citizen who also was known as Steven Blain, Michael Attilio Mangarella (US), 51. Two Canadians were also involved, Herman Kankrini, 42, and Giuseppe Pileggi, 45, who is also known as Joe Robert Haley.

Has Costa Rica’s Name Been Tarnished Again?

Some people have suggested that Costa Rica’s name has been tarnished with two more highly publicized scams. I do not see it that way.

Just because these criminals were physically in Costa Rica, does not make Costa Rica responsible for their despicable behaviour. Some were operating out of private homes using telephones and the internet which they could have done anywhere.

In Costa Rica Scam #1: What I do see is a Canadian man living in Costa Rica arrested for fraud and acquitted two years later because of his involvement with Principal Services. Thankfully his boss, Gerald Latullipe has been apprehended and we can hope that he will be brought to justice and maybe, just maybe, some investors will get their money back.

In Costa Rica Scam #2: I see three US citizens and two Canadians living in Costa Rica who are the ringleaders responsible for building a complex organization that deliberately focused on ripping off some of society’s most vulnerable people – senior citizens in the USA. Officials here said the operation took in $20 million dollars.

Apart from the ever present Costa Rica boiler room real estate investment scams, we have seen many other scams here over the years. It might be currency options, foreign exchange trading, other investment “programs” and you will clearly see that in the vast majority of cases, the criminals, scam artists, con men – whatever you want to call them – are primarily Americans, with some Canadians and a few other foreigners in the mix, only rarely are they Costa Ricans.

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Written by Scott Oliver, author of How To Buy Costa Rica Real Estate Without Losing Your Camisa and Costa Rica’s Guide To Making Money Offshore.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.