Costa Rican authorities have not been doing enough to address the problems of property theft. Surprisingly, property thefts are not that difficult to achieve. It can be as easy as an unscrupulous Notary Public transferring your property from your name, and then into the name of a 3rd party. This 3rd party, who is part of the criminal organization, can then sell or mortgage your property to an unaware financial institution or buyer.

This type of property theft has been happening in Costa Rica for years. But now there is a new target – Costa Rican corporations. And this variation seems even more organized.  corporation thievesAgain, using a dishonest Notary Public, the President of the corporation is removed and then replaced with the name of one of their accomplices. Or non-existent persons with fictitious identities are named to the Board of Directors for the Corporation. Once they have removed your name from the corporation records, they are now in control and can therefore dispose of the corporation assets as they please. Often the criminal organization will mortgage or sell the property to secure the cash.

How can it be that easy you may wonder?

corporation thievesIn Costa Rica, Notary Publics have what is considered to be ‘public faith’, and therefore any changes made or documentations presented by a Notary are accepted without questions asked.  Even financial institutions don’t question documentation presented by Notary Publics. Neither does the National Registry. So these unscrupulous Notary Publics can use this public faith to change documentation of ownership or corporation documentations, and therefore get these changes certified by the Registry. Once the changes or revisions are made in the National Registry, the theft is complete and even registered back into the system.

How can I protect myself?

As a way to protect you from property theft, it has been recommended that you actually place a mortgage on your own property into the corporation books. This makes your property appear less attractive as these dishonest Notary Publics do their research carefully when choosing their next target for theft. But with this added threat from corporation theft, it is possible that once the corporation has been illegally seized, the new Board of Directors simply removes the mortgage and now the property is free and clear for resale.

corporation thievesWhile a mortgage is not a fool-proof defense against property theft, it is still better than nothing as a means of protecting your property. One very important measure to protect your corporation from theft is through your corporation books – that set of 6 books you were issued when you initially created the corporation. It is vital that these books are kept in safe storage and are well guarded – either in your home in a safe box or with your reputable lawyer. If an attempt has been made on your property or corporation, those corporation books are your best defense. By illustrating through your original corporation books that no changes, revisions, or sale were approved in the necessary shareholder meeting, you can verify that these actions were in fact fraudulent.

The importance of corporation books up-to-date

Which is why those corporation books are of vital importance to protect your assets, and why they must be current, up-to-date, and well secured. But if you discover that a theft has taken place, the only option you have is to begin a criminal investigation by filing a complaint with the Organismo de Investigacion Judicial (OIJ). The next and immediate step
is to obtain an Attorney who specializes in criminal matters, and then secure a court order
freezing the property which will stop the property from being sold until the matter has corporation thievesbeen resolved.

Unfortunately that can take a long time, as well as costly legal expenses as the legal system in Costa Rica is known to be lengthy and endless. For these reasons, you can expect any justice to take years before you achieve satisfaction. In fact, this is something that these criminal organizations know well as they know their way around the legal system, and know how to make the whole legal process and legal expense drag on for years.

 

Contact us for more information on how to best protect your property and your corporation.