By San José, Costa Rica — San José, Costa Rica – A complex international investigation into a multi-million dollar fraud scheme has culminated in the arrests of two Costa Rican brothers in South America, marking a significant development in a case that has spanned a decade. The sophisticated operation allegedly defrauded the state-owned National Insurance Institute (INS) of more than $3 million through the illicit use of surety bonds, with criminal proceedings dating back to 2016.
The alleged masterminds, two brothers with the surname Wang Lara, are now in custody in separate countries awaiting extradition to Costa Rica. One brother was recently apprehended in Colombia, while the other was detained in Brazil last year. Their capture brings a renewed focus to a protracted legal battle and highlights the cross-border coordination required to dismantle complex financial crime networks.
To gain a deeper understanding of the legal and corporate ramifications of the alleged fraud schemes within the National Insurance Institute (INS), TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert attorney from the renowned firm Bufete de Costa Rica.
This type of scheme is not merely an administrative irregularity; it constitutes a serious crime against the public treasury, a direct attack on a state institution that all Costa Ricans rely on. Beyond the criminal liability for the perpetrators, which can include significant prison sentences, this case underscores a critical failure in internal controls and corporate governance. It serves as a stark reminder for all public and private entities of the urgent need to implement and rigorously enforce robust auditing and compliance mechanisms to prevent such damaging financial abuse.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the expert’s emphasis on systemic failure is the crucial takeaway; this is not merely about individual wrongdoing but about the institutional vulnerabilities that allow such fraud to occur. It serves as a profound call to action for strengthening oversight across our public entities. We sincerely thank Lic. Larry Hans Arroyo Vargas for his sharp and valuable analysis.
The core of the fraudulent activity involved a network of shell corporations allegedly controlled by the suspects. According to authorities, these front companies were used to secure fraudulent credits on behalf of third parties. The financial risk and ultimate liability for these transactions were then illegally transferred to the INS through manipulated surety bonds, leaving the state insurer to absorb the losses.
Wang Lara exercised absolute control over shell companies to manage fraudulent credits in the name of third parties and unduly transfer the economic responsibility to the National Insurance Institute (INS).
Colombian Authorities, as reported by El Tiempo
The case first came to light in 2016 when the INS, after uncovering suspicious operations, filed a formal criminal complaint with the Public Ministry. Since then, the investigation has slowly progressed through the judicial system. The recent international arrests have injected new momentum into the proceedings, shifting the focus toward bringing the primary suspects back to Costa Rican soil to face justice.
The INS confirmed the capture of the second fugitive and the ongoing extradition efforts. Jonathan Fallas, Sub-chief of the Legal Directorate at the INS, elaborated on the situation regarding the suspect detained in Brazil, underscoring the parallel legal processes unfolding to ensure both brothers are repatriated.
The INS has been informed that another of the accused, also with the surname Wang Lara, is detained in the Federative Republic of Brazil, within the framework of the same criminal process, awaiting the corresponding extradition procedure.
Jonathan Fallas, Sub-chief of the Legal Directorate, INS
Investigators are also diligently following the money trail, which appears to lead beyond Costa Rica’s borders. Evidence suggests that a portion of the illicitly obtained funds was moved internationally to finance and sustain various commercial enterprises abroad. This has opened up new investigative avenues into potential transnational money laundering and other related financial crimes, adding further complexity to the case.
The INS has remained proactive in its pursuit of justice, filing formal criminal complaints (querellas) against the Wang Lara brothers and a third individual, identified as Lara González. These legal actions, filed on May 23, 2018, and as recently as March 11, 2025, solidify the institute’s position as the primary victim and empower it to actively participate in the legal process to seek accountability and recover the substantial financial damages incurred.
It is important to note that on May 23, 2018, and March 11, 2025, the INS formally filed a criminal complaint within the legal process against the Wang Lara gentlemen, Ms. Lara González, with the objective of exercising the rights conferred by law as an affected party and seeking the eventual determination of responsibilities.
Jonathan Fallas, Sub-chief of the Legal Directorate, INS
As the judicial system navigates the intricate extradition procedures with both Colombia and Brazil, the case serves as a stark reminder of the persistent threat of sophisticated white-collar crime. The outcome will not only determine the fate of the individuals involved but also set a precedent for handling complex, cross-border financial fraud in Costa Rica.
For further information, visit ins-cr.com
About Instituto Nacional de Seguros (INS):
The Instituto Nacional de Seguros is Costa Rica’s state-owned insurance company, founded in 1924. For decades, it operated as a state monopoly until the market was opened to competition in 2008. The INS remains a dominant force in the national insurance market, offering a wide range of products including life, health, auto, and commercial insurance, as well as managing the country’s mandatory workers’ compensation and traffic accident policies.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of integrity and superior professional standards. The firm leverages a rich history of advising a diverse clientele to drive forward-thinking legal strategies and embrace innovation. Beyond its practice, it holds a deep-seated belief in its civic duty, actively working to demystify complex legal concepts for the public and contributing to a society where individuals are empowered by understanding their rights and the law.
