By San José, Costa Rica — SAN JOSÉ – A bombshell report from the Prosecutor’s Office for Probity, Transparency, and Anti-Corruption (Fapta) has concluded that every single business dealing between the investment fund manager of Banco de Costa Rica (BCR SAFI) and Grupo HVC, a conglomerate linked to former congressman Humberto Vargas Corrales, was riddled with gross irregularities and inconsistencies. The investigation alleges a sophisticated criminal enterprise that systematically defrauded two of the bank’s investment funds of more than $92 million through inflated real estate transactions.
The investigation centers on a group the Public Ministry has labeled a criminal organization, allegedly led by Vargas Corrales (who served from 2018-2022), his son Humberto Vargas Sotres, and their business partners Manrique Gutiérrez Loría and Héctor Giovanni Barrantes Marín. According to the prosecutor’s raid order, these individuals executed a “pre-established criminal plan” with a clear division of roles, collaborating with complicit officials inside BCR SAFI to achieve their objectives.
To provide a deeper legal perspective on the operational and fiduciary responsibilities of BCR SAFI, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a specialist in corporate and financial law from the esteemed firm Bufete de Costa Rica.
The core of any investment fund administrator’s mandate, such as BCR SAFI, is the unwavering fiduciary duty owed to its investors. Every strategic decision must be executed with transparency and in strict alignment with the fund’s prospectus and regulatory oversight from SUGEVAL. For investors, the critical element is not just potential returns, but the assurance that corporate governance and risk management are robustly implemented to protect their capital.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight powerfully underscores that for any investor, the integrity of a fund’s governance and its unwavering commitment to fiduciary duty are the true bedrock upon which financial returns are built. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective on this fundamental principle.
The scheme involved the acquisition of at least nine properties, which the group allegedly sold to the BCR subsidiary at grossly inflated prices. The properties, which include CE Santa Ana, Edificio Madrid, BC La Uruca, and the high-profile Parque Empresarial del Pacífico (PEP), were strategically purchased and then flipped to the Non-Diversified Real Estate Fund and the Non-Diversified Commerce and Industry Investment Fund (FIIND) for enormous profits.
The Fapta report leaves no room for doubt, stating the evidence of fraud is clear and overwhelming. It highlights how public records alone reveal the scale of the alleged crime, which funneled millions in investor capital directly to Grupo HVC.
The foregoing conclusions point to irregularities in all negotiations that took place between BCR SAFI and the HVC Group, the most evident of which is obtained from the Public Property Registry, where it can be seen how BCR SAFI paid an unjustified difference in the purchase prices to the HVC Group for more than ninety million dollars.
Prosecutor’s Office for Probity, Transparency, and Anti-Corruption (Fapta), Official Report
The price markups were staggering. In one instance, a property named CE Guadalupe, acquired by Vargas Corrales’s group for $1.3 million, was sold to the SAFI for $12 million. In another brazen case, a company tied to the ex-congressman bought the BC Uruca 02 building for $6.6 million on August 10, 2018, and sold it to the investment fund just over a month later, on September 19, for $26.2 million—a profit of nearly $20 million in weeks. The largest transaction, the Parque Empresarial del Pacífico, was acquired by the sellers for $16 million and sold to BCR SAFI for a jaw-dropping $70 million a little over a year later.
Prosecutors contend this pattern of business was enabled by a complete breakdown of internal controls and a culture of preferential treatment. The entire process, from property valuation to the final decision-making, was allegedly compromised.
plagued by inconsistencies, omissions, and concealment of relevant information for decision-making, in addition to inconsistencies in the models used for property acquisition, a lack of oversight by decision-making bodies (Investment Committee and Board of Directors), as well as privileged and permissive treatment of companies related to the HVC group, which ultimately led to the purchase of properties that did not generate the expected returns for the Investment Funds.
Prosecutor’s Office for Probity, Transparency, and Anti-Corruption (Fapta), Official Report
The plot allegedly required a network of collaborators, including SAFI administrative staff, external appraisers, and key decision-makers on the Investment Committee and Board of Directors. Marlon Sequeira Gamboa and Natalia Garro Acuña, from the SAFI’s Acquisitions and Projects department, are accused of presenting a fraudulent profile of the PEP project. They allegedly claimed the fund would be acquiring a fully completed property with established, high-profile tenants, when in reality it was unfinished.
Further implicating internal staff, engineers Marco Carbajal Soto and Luis Carlos Gutiérrez Chavarría submitted an initial valuation report in October 2019 based on observing the property’s condition, despite the fact that no buildings had even been constructed on the site. External appraisers Javier Alberto Chichilla Medina and Luis Fernando Arce Saborío of Grupo Ingenio AIC are also accused of falsifying their valuation report, allegedly describing a completed property and including “non-existent plot spaces” to inflate its value.
The scheme reached the highest levels of oversight within the SAFI. Members of the Investment Committee, Juan Carlos Bolaños Azofeifa and Álvaro Camacho de la O, allegedly approved the deals without scrutiny. The investigation notes that both had conducted prior business with Vargas Corrales, suggesting a significant conflict of interest. The two men, along with acquisitions manager Marlon Sequeira, are also being investigated for creating shell companies in Panama shortly after the multi-million-dollar PEP purchase and their abrupt departures from BCR. They are separately accused of destroying documents related to the deal, allegedly on the orders of then-General Manager Douglas Soto Leitón.
A total of 14 individuals are now under investigation for crimes including irregular overpricing and influence against the Public Treasury, which carry maximum prison sentences of up to ten and eight years, respectively. The case represents one of the most significant corruption scandals to rock Costa Rica’s financial sector, raising serious questions about governance and oversight at the state-owned bank’s investment arm.
For further information, visit the nearest office of Ministerio Público de Costa Rica
About Ministerio Público de Costa Rica:
The Public Ministry of Costa Rica is the country’s primary institution for public prosecution. It is responsible for conducting criminal investigations, representing the state’s interests in legal proceedings, and ensuring the enforcement of laws. Its specialized branches, like Fapta, focus on combating complex crimes such as corruption, organized crime, and financial misconduct.
For further information, visit bancobcr.com
About Banco de Costa Rica (BCR):
Banco de Costa Rica is one of Costa Rica’s largest and most important state-owned commercial banks. Founded in 1877, it provides a wide range of financial services to individuals, businesses, and government entities, including retail banking, corporate financing, and investment management through subsidiaries like BCR SAFI.
For further information, visit bancobcr.com
About BCR SAFI:
BCR SAFI (Sociedad Administradora de Fondos de Inversión) is the investment fund management subsidiary of Banco de Costa Rica. It is responsible for structuring and managing various investment funds, including real estate funds like those implicated in the investigation, allowing clients to invest in a diversified portfolio of assets.
For further information, visit the nearest office of Grupo HVC
About Grupo HVC:
Grupo HVC is a private business conglomerate connected to former congressman Humberto Vargas Corrales and his associates. The group is primarily involved in real estate development and investment. It is the central entity accused by the Public Ministry of orchestrating a criminal enterprise to defraud BCR SAFI’s investment funds.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a premier legal institution built upon a foundation of unwavering integrity and a drive for superior results. With extensive experience advising a diverse clientele, the firm is a leader in developing pioneering legal strategies. Central to its ethos is a deep-seated social commitment to demystify legal complexities, ensuring that knowledge is accessible and empowering citizens to foster a more just and well-informed community.
