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Only Full-Time American owned and operated Private Investigation Agency in Costa Rica Staffed​ ​​​by Resident American Fraud and Infidelity Bilingual Investigators.

Avoiding Fraud in Costa Rica

Avoiding fraud in Costa Rica

Understand common types of fraud in Costa Rica

Fraudsters will try to steal your property, identity or tap into your bank or business to steal assets or money. Avoiding fraud in Costa Rica is really simple. To assist you in avoiding fraud in Costa Rica, we have put together a laundry list of various methods used by scammers here in Costa Rica to rip you off.  Criminals will approach you through letters, a phone call, or via email. Cyber-crime is a principal priority risk for US residents and businesses. Typical scams include investment offers or opportunities to acquire new customers who you supply but never receive payment from. The most used here in Costa Rica is the email that is generated from “Phishing” on the internet. Typically, these come in the form of an email that tell you that you have won some kind prize. In the past the “lottery scam” was the most popular.

Phishing‘, or rogue emails asking for your  personal or business banking details, are a common way to steal money. Read more about how to safeguard your assets and property against fraud.

Going After your life savings

Defense against fraud comes with being able to recognize the various different types of financial schemes that exist. According to the U.S. Securities and Exchange Commission, the following investment scams are commonly used to target Americans:

High-return or ‘risk-free’ investments

Costa Rica scammers, passing themselves off as brokers and investment advisers, recommend unsuitable products that don’t meet the investment objectives or financial situations of investors. Inappropriate recommendations might occur when a broker sells speculative, high- risk investments such as options, futures or penny stocks to individuals who are near retirement or are retired and have a low-risk tolerance.Pyramid schemes. In this classic scheme, fraudsters promise sky-high returns in a short period of time for doing nothing other than handing over money and getting others to do the same. Despite their claims to have legitimate products or services to sell, these deceivers spend much of the money on themselves and simply use money coming in from new recruits to pay off early stage investors. Although the products sold may be legitimate, eventually the pyramid will collapse. At some point the schemes get too big, the promoter cannot raise enough money from new investors to pay earlier investors and many people lose their money.

‘Ponzi’ schemes

These are a type of illegal pyramid scheme named for Charles Ponzi, who fooled thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Costa Rica had it’s own form of a Ponzi scheme which was carried out by the Villalobros Brothers, who scammed millions from unsuspecting investors. He told investors he could provide a 40 percent return in just 90 days compared with 5 percent for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period. Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons. Today, the Ponzi scheme continues to work on the “rob-Peter-to-pay-Paul” principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses.

Promissory notes

A promissory note is a type of debt that is similar to a loan or IOU and is used by a company to raise money. Typically, an investor agrees to loan money to the company for a set period of time. In exchange, the company promises to pay the investor a fixed return on the investment, typically principal plus annual interest. While promissory notes can be legitimate investments, those that are marketed broadly to individual investors often turn out to be nothing more than worthless paper. Most established companies have borrowing relationships with financial institutions, therefore this type of transaction among individuals is rare. Individual investors should exercise extreme caution with this type of investment.

Internet investment fraud

Internet investment fraud is similar to other fraud perpetrated over the phone or through the mail. Fraudsters use a variety of Internet tools, including bulletin boards, online newsletters, spam or chat rooms to spread false information. They also may build a sophisticated Web page to make their scam appear legitimate. The Internet has made off-shore scams very easy to implement and difficult to police because the perpetrators often reside outside of the U.S.

Affinity fraud

This fraud refers to investment scams that prey upon members of certain groups, such as religious or ethnic communities, the elderly or professional groups. Deceivers who promote affinity scams frequently are—or pretend to be—members of the group. They enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing people that a fraudulent investment is legitimate and worthwhile. Often, the leaders themselves become unwitting victims of the fraudster’s scheme.

For more information on fraud in costa Rica see “Different types of Fraud in Costa Rica, or call 321-218-9209.

 

Hiring a Costa Rica Private Investigator

Before hiring a Costa Rica private investigator

Hiring a Costa Rica private investigator does not have to be a stressful or difficult process.  Before hiring a Costa Rica private investigator, use these simple steps as a guideline for locating the right Costa Rica private investigator for your case. Today, it is easy to be misled, especially since the proliferation of third-party lead generators. These lead generators are not present in Costa Rica and do not disclose the consequences of using people that cannot meet your needs. This is especially true in the event your case goes to trial.

Licensing

There is no national licensing system for private investigators in Costa Rica. No one in Costa Rica has a license to do investigations.  Unlike the United States where PI licensing is regulated on the state level. If the actual investigator does not possess a license issued by a state, then that tells you that this person is unqualified to do investigative work.

Currently, the only states that do not require private investigators to be licensed are: Colorado, Idaho, Mississippi, South Dakota, & Wyoming

Always contact the appropriate state licensing agency to confirm an investigator’s license is current and in good standing prior to hiring them.

PI Firms vs. Individuals

One key choice in hiring a Costa Rica Private Investigator is whether to hire an individual or an investigative firm. Firms typically employ greater resources and are ideal for cases requiring large amounts of surveillance and manpower. Individual PI’s can often provide a wealth of knowledge with issues including the location of persons, background investigations, asset investigations etc.

Be sure to choose an investigator or firm that employs the necessary resources and prior experience to properly address your needs.

Hiring a Private Investigator

It is important to feel comfortable with the PI you choose as matters that require private investigation cases are often of a sensitive nature. Look for individuals who are able to think “outside of the box” and adapt to changing situations easily. Inquire as to signing a contract or agreement listing the private investigator’s services, fees, and terms. Make sure this agreement comes from the person or firm who is physically present in Costa Rica and is actually doing the investigation. This protects both parties.

Be sure to ask a potential investigator as many questions as possible. If your not comfortable with their answers, demeanor, or experience you should find another private investigator with who you are.

Questions to Ask Your Investigator

How long have you been in business?

How many cases of this nature have you handled?

What is your success rate with cases of this nature?

What are your rates and fees?

Do you have experience testifying in court?

Do you take video of surveillance operations?

Can you perform covert surveillance as needed?

Can you provide a reference of an attorney you’ve worked for in the past?

 

Mistakes Expats Make in Costa Rica

Here’s a list of Mistakes Expats Make in Costa Rica

law-firm-page-for-webThe law is can be preventive medicine, but if not used correctly, it is a devastating curative medicine.  So, please let me try and help you avoid mistakes made by those who came to Costa Rica before you, and try and keep you out ‘hot water.’

1. Do not do anything you would not do in your own home town: A lot of foreigners seem to believe they can outsmart the system when they come to a less developed country. Or, it just may be the kind way most Costa Ricans behave with ‘gringos’, which turn them into wishful thinkers.

Always bear in mind that the legal system in Costa Rica is Napoleonic, not Common Law, so things are handled very differently than in the US or Canada. Because of that, the best place to begin your investment plan is in an attorney’s office.

It is best not to try the Do it yourself’ method! Some people, in trying to save some dollars in legal fees, avoid the work of finding a good attorney to guide them through their problems. Do not do that! Do your homework. Find an attorney, you feel comfortable with and stay with him for as long as he does a good work.

2. Do not rush into the decision of hiring an attorney. If you are thinking of investing in Costa Rica, like it or not, hiring a local attorney is a must for you. It does not matter if you are just buying a car, a home or planning to set up a million dollar business. You will need an attorney. You may not like the idea of paying legal fees, who does? But accept it and live with it. The idea is to have your lawyer working for you as ‘preventive medicine’, as a kind of insurance against what ‘might happen.’

Consider the legal fees as your insurance premium, because that’s really what it is. Today, you will pay a fraction of what it will probably cost to try and fix that problem later on if you do not have an honest attorney to guide you.

3. Do not think of buying Costa Rica real estate and only follow the real estate broker’s advice! In Costa Rica, real estate brokers are not licensed in the same way they are in the United States . Some of them are real professionals, but a lot of them are just ‘enthusiastic’ sales people.

Either buying or selling real estate, you will probably have a need for a broker’s services, but even if your Costa Rica real estate agent is first class, have your attorney on board and have him supervise the process.

Real Estate Fraud 24. Do not blindly trust your own countrymen! Just because they have been here more time than you have. I have seen that US citizens being conned by US people and, Canadians by Canadians and so forth. Be careful! There are a whole lot of strange people in this country, some of them fleeing from the FBI, Interpol, ex-wives and even from mental institutions.

5. Gentlemen! Please remember that you do not, I repeat, do NOT need to marry the first beautiful ‘Tica’ (Costa Rican woman) that you meet!

6. “Old Mac Donald had a farm“: And he lost it, because never took care of it. This is a common story in Costa Rica. Again, please remember that our legal system is different.

7. South of the Border…  Not everybody here wears a big Mexican ‘sombrero’ and has a big bushy moustache and not all the ladies are named “Juanita Bonita’. South of the Río Grande,  you will find: México, Belize, Guatemala, Honduras, Salvador, Nicaragua, Costa Rica, Panamá, Colombia, Perú, Paraguay, Uruguay, Argentina, Chile and Brazil. All of them are different countries, with a different history, different people, and different laws.

8. “Easy comes easy goes.” I will not even waste your time on this matter. If it sounds too good to be true, then yes! It probably is too good to be true. Nobody on this earth can give you 45% per annum in a legitimate investment.

9. There is ‘risk’ even with legitimate well known and established private banks. Right now I am trying to help a client who deposited a large amount of money in CDs, in one local bank.

10. If you really want to live in Costa Rica then, please live IN Costa Rica! It was the year 335 B.C. Alexander the Great faced one of his greatest battles. When his army reached the Phoenician coasts, he realized their enemies outnumbered them by 3 to 1.

Do you know how he managed to win the battle? Quite simple! He ordered his ships to be burnt… While the ships where on fire and sinking on the ocean, he spoke to his army and told them the only way to go back home was on their enemy’s ships. It was that or else.

If you really want to become a resident in Costa Rica, you may have to burn your ships.