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Clues in Land Fraud Cases Gaining More Importance

by Garland M Baker on February 5, 2007

Crooks are getting smarter

A good detective can catch crooks in Costa Rica. The court now voids contracts, deeds, documents and deceptive acts more than before based on mere indications and clues of wrongdoing. Good thing too, because day by day the wicked get worse and believe that they can get away with anything here.

Even expats get caught up in stealing property and other assets that are not theirs because they believe they will not get caught by the law. It is true the judicial system is slow and inefficient at times, but it is equally true the country is striving to make it better.

Legal issues in Costa Rica involving theft and fraud usually form a triangle of players: the victim or plaintiff, the defendant and a third party. For example, in property fraud, the victim represents the true owner, the defendant is the crook, and the third party the person who bought land from the crook.

The civil and criminal courts treat legal issues pertaining to fraud differently. Civil courts protect the third party and the criminal courts protect the rightful owner.

The playing field is different too. Civil courts treat defendants and plaintiffs on a 60-40 basis. This means they give defendants a preconceived reasonable doubt rating they are right of 60 percent, plaintiffs get a 40 percent rating that they are right. Criminal courts preconceived notion is defendants get a 75 percent reasonable doubt rating they are not guilty and a 25 percent estimate that the defendant is guilty.

Smart criminals try to cover all their bases as they do in a good murder mystery, getting rid of all the evidence. This makes prosecution difficult, so the courts now look at more than just the testimony. They look at the circumstantial evidence as well.

Simulation and dissimulation are the key elements to asset crimes in Costa Rica.

Simulation in legal terms means the act of giving a false appearance as in making something look legal when it is not. Simulation is to imitate. Forgery is an extreme example of simulation. Another example of an act of simulation is holding a mortgage on one’s own property using a fictitious name or company. Holding a mortgage on ones own property is illegal in Costa Rica. Holding mortgage certificates over one’s own property is not.

Dissimulation is the act of deceiving as in hiding or camouflaging. Dissimulation is to disguise. An example of dissimulation is to put ones assets in a wife’s or friend’s name to hide it from creditors.

Many times clues to an illegal transaction are easy to find as in a Quepos case where a politicos’ spouse figured in a land fraud. The true owner was not in Costa Rica when the property transaction theoretically took place. This was easy to prove with immigration records. The criminal judge gave this clue more importance then proving the signature to the deed was false because the transfer document in the notary’s protocol book magically disappeared, another clue of wrongdoing.

Surprise private contracts or plat maps over properties that magically appear from nowhere are also indicators of a swindle or fraud. Transferring assets to friends, girlfriends, or relatives at an unrealistic low price are suspect by most judges.

A classic sham in Costa Rica is faking a general assembly meeting in a company where shareholders are changed, powers of attorney are given to strangers or assets are transferred without the consent of the real owners.

Worse yet is where a shareholders’ meeting takes place and legitimate owners forge the signatures of other shareholders in the corporate legal books to take control or dilute ownership.

In both of these cases, it is common that the company’s books go “poof” into thin air and disappear. When this happens, judges start looking for other clues to prove foul play.

For those involved in illegal activities in Costa Rica including, but not limited to, property fraud, faking company legal books, or other documents, the courts are changing direction and do not necessarily need hard evidence to void the illegal transaction.

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