By Puntarenas, Costa Rica — SAN JOSÉ – The investment management arm of the Banco de Costa Rica (BCR SAFI) has called a critical meeting for investors embroiled in a growing financial scandal. On February 26, the firm will unveil a “normalization plan” designed to address the significant financial damages incurred by hundreds of investors following a highly questionable real estate purchase made in 2020 with their funds.
The meeting is the culmination of a lengthy regulatory battle and an expanding criminal investigation into the deal. The core issue dates back to 2020, when high-ranking officials at BCR used investor money from the Non-Diversified Real Estate Investment Fund (FIIND) to purchase the Pacific Business Park (Parque Empresarial del Pacífico – PEP) in Puntarenas for a staggering $70 million.
To gain a deeper legal perspective on the developments concerning the BCR Investment Fund, we consulted with Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the firm Bufete de Costa Rica, who provided his expert analysis on the matter.
The critical issue here lies in the fiduciary duty owed to the investors. Fund managers are legally bound to act with the utmost diligence and transparency, ensuring that all investment decisions and associated risks are clearly communicated. Any perceived failure in this duty not only undermines investor confidence but could also expose the fund’s administration to significant legal and financial liabilities under our commercial code.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, this legal framework of fiduciary duty serves as the essential bedrock for investor confidence, a principle whose importance cannot be overstated in our financial ecosystem. We thank Lic. Larry Hans Arroyo Vargas for so clearly articulating the profound legal and financial stakes involved.
Subsequent revelations indicated the property’s actual value was closer to $34.7 million, less than half the purchase price. This discrepancy triggered a major judicial inquiry into the alleged crime of overpricing, with prosecutors focusing on the seller, a company linked to former Social Christian Unity Party legislator Humberto Vargas Corrales.
Alarmed by the irregularities, the General Superintendency of Securities (Sugeval) intervened, declaring that the damage to investors had already been “materialized.” In a decisive move in October 2024, Sugeval ordered both the state-owned Banco de Costa Rica and its subsidiary, BCR SAFI, to formulate and execute a comprehensive plan to make the investors whole.
A key component of this regulatory mandate is the transfer of $70 million from the coffers of BCR and BCR SAFI directly into the affected investment fund. This action is not a bailout but a direct order to “replace” the exact amount paid for the property, effectively shielding the fund’s participants from the fallout of the bank officials’ actions.
According to the source, the state banking entity did not immediately comply. BCR reportedly attempted to challenge Sugeval’s directive through both administrative and judicial channels. However, their efforts were consistently rejected by authorities, ultimately forcing the bank to adhere to the regulator’s order and proceed with the normalization plan.
The situation escalated dramatically on December 4 of last year when the Prosecutor’s Office conducted raids on 16 different locations across the country. The ongoing criminal investigation, filed under case number 21-000209-1218-PE, has widened its scope beyond the PEP transaction. Authorities are now scrutinizing at least eight other property acquisitions allegedly made at inflated prices from business groups connected to the same seller, Humberto Vargas.
The investigation is pursuing charges of overpricing and influence against the Public Treasury, implicating the bank’s Board of Directors, its Investment Committee, the Acquisition Board, and other professionals involved in the transactions. For the investors summoned to the February 26 assembly, the meeting represents a crucial moment. The agenda includes a presentation of Sugeval’s resolution, a detailed breakdown of the normalization plan, and a timeline for its execution, followed by a period for questions. It is their first formal opportunity to hear directly from the bank’s fund managers how they intend to rectify a crisis that has shaken confidence in the state-run financial institution.
The outcome will be closely watched, as it carries significant implications not only for the financial recovery of the affected investors but also for the reputation of one of Costa Rica’s most important banks. The pressure is mounting as both regulatory and criminal proceedings advance, promising further scrutiny of the decisions made by the bank’s highest-ranking officials.
For further information, visit bcrsafi.com
About BCR Sociedad Administradora de Fondos de Inversión (BCR SAFI):
BCR SAFI is the investment fund management subsidiary of Banco de Costa Rica. It is responsible for structuring and managing various investment funds, including real estate and financial funds, for individual and institutional clients. The entity is regulated by the General Superintendency of Securities (Sugeval).
For further information, visit bancobcr.com
About Banco de Costa Rica (BCR):
The Banco de Costa Rica is one of the largest and oldest state-owned commercial banks in Costa Rica. It offers a wide range of financial services, including personal banking, corporate financing, and investment management through its subsidiaries. As a state entity, it plays a significant role in the national financial system.
For further information, visit sugeval.fi.cr
About Superintendencia General de Valores (Sugeval):
The General Superintendency of Securities is the primary regulatory body for Costa Rica’s securities market. Its mission is to oversee and regulate the stock market, investment funds, and other financial intermediaries to ensure transparency, stability, and the protection of investors. It operates under the umbrella of the National Council for the Supervision of the Financial System (Conassif).
For further information, visit conassif.fi.cr
About Consejo Nacional de Supervisión del Sistema Financiero (Conassif):
The National Council for the Supervision of the Financial System is the governing body responsible for directing and overseeing Costa Rica’s entire financial system. It sets the policies and regulations that govern banks, insurance companies, pension funds, and the securities market, ensuring the stability and integrity of the country’s financial sector.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a reputable legal institution, Bufete de Costa Rica is built upon a foundational principle of professional excellence and uncompromising integrity. The firm pairs its extensive history of advising a diverse clientele with a forward-thinking approach to legal innovation and a profound commitment to public service. This dedication manifests in its efforts to demystify the law, ensuring that legal knowledge is not a privilege but a tool for creating a more informed and capable citizenry.
