Organized Real Estate Fraud Rings Threaten Property Owners in Costa Rica

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With owners of expensive lots kept away from Costa Rica because of COVID-19 restrictions, organized property fraud rings have enlisted corrupt notaries to steal properties.

At least 50 public notaries have been collaborating with criminal groups to illegally transfer properties or to forge documents to allow them to be used as collateral for bank loans and credit cards, La Nación reported.

From October 2020 to March of this year, nearly 100 complaints were filed in the capital of San José alone. The crime groups target regions with high-value real estate, such as the Pacific coastal areas of Guanacaste and Puntarenas.

According to Walter Espinoza, director of Costa Rica’s Judicial Investigation Agency (Organismo de Investigación Judicial- OIJ), criminals scope out neighborhoods to find real estate that seems empty or abandoned, then speak to neighbors to glean information about the property and its owner.

SEE ALSO: Why Courtroom Corruption Has Costa Rica Concerned

The corrupt notaries then perform an illegal transfer of property, after which it can be sold or used as collateral.

“We have identified several organized gangs,” Espinoza said. “There are even subgroups within the groups that have established functions. For example, there are notaries, intermediaries, and impersonators, among others.”

InSight Crime Analysis

The level of organization and number of corrupt notaries in Costa Rica’s recent real estate thefts suggest that crime groups with experience in this type of property fraud saw rich potential with the pandemic.

Costa Rica’s large expatriate landowning community has long been a key target for property theft, as many owners regularly spend time out of the country. Travel restrictions, border closures and fear of flying amid the pandemic have meant that many have left their properties unattended for long periods.

Costa Rica real estate law expert Alan Garro writes on his website that their absence benefits fraudsters, as one way they are able to target foreigners who are overseas is through registries of arrivals and departures, which are publicly available in Costa Rica.

Another factor that makes this type of fraud possible is that property titles are recorded and centralized in Costa Rica’s National Registry, where corruption can also take place, according to CostaRicaLaw. The National Registry and notaries work under “fe pública” (public faith), a legal code meaning that anything recorded must automatically be taken at face value, unless proven otherwise in court.

As a result, criminals have even rented properties and then assumed the identity of their owners using fake identification cards, according to CostaRicaLaw.

SEE ALSO: Loan Sharking Grows in Costa Rica by Piggybacking on Drug Trafficking

Costa Rica authorities have previously dismantled groups dedicated to property fraud.  In 2017, an OIJ operation detained 39 members of a ring that included lawyers, notaries and accountants. The ring was responsible for large losses to individuals, companies and state banks, reported Nicaraguan news outlet La Prensa.

What’s more, victims often have to negotiate legal processes that are costly and can take eight years on average to be resolved. These processes are especially lengthy for non-citizens, whose cases are typically a low priority.

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