#877 – The Expat Files: Costa Rica’s Hidden Costs and Expatriate Pitfalls

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now as I wander Hello there all you ex-pat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started All right, Latin America the good the bad the ugly and the great. Let's have a little ugly now You longtime listeners have heard me say over and over again What a bad move it is to go to Costa Rica for your plan B I mean even if you have money and can live anywhere you want in the most beautiful

[00:48] Condo right on the ocean a troop of monkeys checking in every morning to steal bananas from your breakfast nook I have a family of sloths and toucans living in the tree right outside your picture window Yep, you see those things in Costa Rica the place is great, but the people Including the gringos most including the gringos is beyond tainted In fact, no one I know who's ever lived there for any length of time Doesn't have moments of anguish thinking how did I ever get here? How could I have swallowed all that international living bullshit? We're shed a lot of very smart even brilliant gringos and expats have gone down to Costa Rica thinking Hey great plan B only to get scammed and gouged left and right But clueless gringos up in the states still have it in their sights

[01:34] Why not the PR and publicity machine is great? Everybody speaks English even the natives and best of all they've got no army sometime back I think in 1946 they abolished the army What a great move But what you don't find out till you've been living down there a long long time and been pulled over by number of cops and had The shakedown the gringo shakedown that is they've got a civil and national police force with numbers of cops Beyond that of any standing army now I don't know if you knew that already but few people do so then why am I harping on Costa Rica again? When you've heard me say a lot of this stuff before well everyone likes a good boots on the ground story, right? Well, here's one coming at you that you might never forget All right a little background here all my life I've been a gold and silver hard metals kind of guy and now I'm a gold silver hard metals crypto kind of guy and over

[02:25] The years I've subscribed to many newsletters and services put out by like-minded hard money guys No surprise most all of them being anti big government libertarian types like me Now one of my favorite economic and hard money analyst guys name is Jim Willie. Have you heard of them? He's had a gold and hard money newsletter for I'm sure at least 30 years and he too back when he was living in the states realized a long time ago like most of you listeners have done that the u.s. And the rest of the world with the trillion dollar deficits is financially imploding and unsustainable So he to mr. Jim Willie got his plan be going left the states got out of Dodge and guess where he went? Costa Rica as soon as he did he announced it to everyone. I thought man for such a smart guy

[03:13] Think he's got two PhDs. What an idiot which goes to show you could be very smart and clueless at the same time now You long-time listeners know Costa Rica was one of my very first stops around 30 years ago now when I first left the state I lived there for about three years started a business that actually took off had a Canadian partner who skimmed from me a lawyer Who ripped me off? I also accumulated quite a few gringo friends who couldn't speak Spanish like myself Who to a person were scammed gouged and ripped off every which way by mechanics car dealers landlords? Contractors lawyers accounts even their own business partners as in my case, man I saw the writing on the wall 30 years ago and was lucky enough to get out in time and with my shirt intact

[03:59] Though it could have gone either way because there were a few business deals that came my way that I could have jumped in On that became nightmares and black holes for other gringos. Thankfully, not me So when I left Costa Rica around 26 years ago, my next stops were Panama, Colombia and Guatemala Anyway, as soon as I left I sounded the alarm I warned everybody I knew keep away from Costa Rica But you can't beat the PR machine of international living and the Costa Rican tourism Institute Nobody ever tells you about the underbelly of Costa Rica until you've lived there at least a few months and start Talking to people and see it for yourself not to mention almost everyone I've ever met who fell in love with Costa Rica at first sight had never been anywhere else in Latin America except for maybe

[04:48] Cancun or some other Mexican fun, but synthetic resort town or a grungy border town like Juarez or Tijuana But back to our friend Jim Willie, you know when he moved to Costa Rica He started showing up as a guest on a lot of podcasts. The guy's really good. I love his newsletter. It's called The hat trick newsletter by paid subscription only and it ain't cheap and his website the unforgettable Golden jackass.com. It's good stuff. He's a very bright guy Except he really really screwed up with his plan B I knew things weren't going well and cracking at the seams for him When even five or six years ago when I'd hear him on a podcast the interviewer would say Jim I hear you're living in Costa Rica now then he'd go on and on about it singing the praises of Costa Rica except in the

[05:35] Background I'd hear truck horns and ambulances and police cars and street vendors and I'm thinking a guy like that What's he doing living near or broadcasting from a noisy traffic clogged body? Oh like that and it was like that every time I heard him on an interview Something was wrong with that picture. You can't fool me I lived there and there was a kind of edge to his voice that wasn't there before Sounded a bit fed up irritated. No, it never to me. It sounded like he was ever Broadcasting from a nice luxury beachfront villa with the million dollar view Something that you'd expect from a guy with his finance and investment chops And then just in the last two or three years He sounded rather depressed fatigued and even a little annoyed went on a podcast and the interviewer would ask about Costa Rica

[06:20] And as for me every time I was with gringles and expats and they brought up Jim Willy when we were discussing Financial guys who I respect or they respect I'd say yeah, Jim Willy. He should know better I don't know why he's in Costa Rica He of all people such a good researcher But he sure in hell didn't research Costa Rica and they'd look at me and say maybe you're the one who's wrong, Johnny I mean, he's the big-time financial analyst and I'd say nah, I know Costa Rica. He's making a big mistake But it's not in his best interest to admit it Just like the almost 2 million gringles and expats living full or part-time in Mexico They all see what's happening, but it's truly embarrassing to admit It was a huge personal and or financial blunder most gringles I know who live in Mexico these days are in the backpedaling or denial mode now as for Jim Willy and his

[07:10] Publications and interviews out of Costa Rica I could see it was just a matter of time before something had to give and man Did it give just a couple weeks ago? And that's why I'm rolling along on this Costa Rica rant today. I'm about to pin your eyes open I'm gonna read something right now direct from his website that just might shock to you But it doesn't shock me one bit But again proves the point that you could be the smartest guy in the room and be a clueless gringo at the same time First off about a month ago. He posted this on his website now paraphrase here This you'll see is more than a warning shot and it gets worse He starts by saying Costa Rica might be a beautiful country But the country is deeply ingrained in poverty where a nest of problems flourishes Many traps exist with widespread fraud the country does not actively promote economic development

[07:59] And as I conclude fraud and crime result by default Attorney fraud is extremely common wherever official documents are involved my first good friends in 2017 committed suicide after the third painful fraud which left them completely broke Finally in the last three years. I have been hit with serious losses myself Mostly from fraud and one criminal deed now. This is the part that blows my mind This guy Jim Willie with all his years of expertise all his clients in million dollar deals He says I now humbly ask for help from all of my followers What has happened to me has left me somewhat crippled financially in downtrodden

[08:45] Then he says what happened to me in Costa Rica since 2017 seems beyond all norms like over three standard Deviations from any normal mean he says before 2017 in my early years here I had a few nice little successes and I did some minor home edition and constructions But in the last three years a horrible sequence of problems resulted often from fraud But also faulty construction methods and even earthquake damage. All right me Johnny here I assume he's talking about what I talk about a lot on this show You can get the construction stuff done and it's supposed to be anti seismic to withstand a seven-point earthquake or so It looks like what happened to Jim Willie is an earthquake came through and his nice so-called anti seismic Construction wasn't quite up to the specs or drawings. In other words typical construction fraud

[09:34] skimping on the expensive stuff the rebar steel and concrete and why I always say you have to check on your Contractor your builders you got to show up unannounced and check up on things You can't start up a construction job and take off for two weeks a month six months like so many gringos and expats Do you have to keep a close eye on your construction jobs, but you knew that already, right? Well, Jim Willie didn't and then he says and you know, you can see all this for yourself. It's on his website That's golden dash jackass calm Then he says regarding construction and minor home additions numerous new problems have occurred which have left me in some degree of debt Unfortunately one particular losing venture resulted in the most brutal of enduring extended costs along with severe

[10:21] Consequences for the man involved in what turned out to be a crime scene These losses are over six figures sadly Then he posts that he's got a new donate button on his website Then he says I've formulated a plan. Sometimes I'm not sure I can overcome these severe losses Especially with the chronically weak economy some help has arrived mostly from my supporters, which is deeply appreciated Then he says hundreds of people among my golden jackass followers might be willing to help in smaller large ways I hope he says I need an amount of contributors from my jackass followers to solve my problem My emotional state has been beset by deep distress for over 20 to 25 months with some bouts of depression Which unfortunately too has extended to my loved ones then he says and this is the topper

[11:11] It should be mentioned that I suspect something here in Costa Rica is very sinister at work Then he says when a septic tank exploded and a client was killed in a car crash in the same week My attention perked and suspicions rose sharply. However, he says such a claim is impossible to prove Alright, so he put that up in his general website But as I mentioned, he's got subscribers to his newsletter and he sent out this Explanation about what happened in Costa Rica and a plea for help to his personal list of paid subscribers He posted this message around two weeks ago again. I'll paraphrase the kids kind of long It says about ten days ago. The leap was taken to install a donate button on the golden jackass website This button marks a point of admission of loss, but also an expression of humility for me

[12:01] Yes, some serious financial losses have occurred which have left me somewhat crippled Oh and he means financially not physically he mentions his physical health is good The button he says is accompanied by a drop-down description of what has happened in Costa Rica My preference is not to provide too much detail for the public web page But with direct emails such as this then he says the willingness is certainly there to discuss more details Of all of this to my certain clients. My life in Costa Rica has been slammed by fraud numerous cases crime earthquakes and extortion Then he says that also happened with two of my American friends. And so here I'm appealing to you All right me Johnny again now listen to this shocker He says your support with paying subscriptions is clearly appreciated

[12:47] But today I ask you might extend your generosity in direct additional aid whether it be minor or moderate or significant Because I must overcome at least 150 to 200 thousand dollars in losses the majority of these losses occurred after March 2017 when I began to openly discuss the pedophiles here and their ritual killing of children in public interviews That is correct He says over 90% of the losses incurred in Costa Rica have been suffered in a little over the last two years It has been a nightmarish sequence at times seeming to be without end Besides the above types of losses. There were two car crashes involving deaths The effect of all of these losses means that in about one to two years

[13:35] I might be forced to shut down the newsletter unless significant help arrives Then he says I admit to some mistakes But what has happened goes in an order of magnitude beyond anything reasonable in any unfortunate circumstances The losses in Costa Rica include property title fraud subcontractor fraud permanent residence application fraud extortion by government offices improper income tax Preparation and application the constant changing of rules and regulations by official offices and government even a 70-foot tree fallen on my house My biggest loss however was an internal crime scene where two primary partners were sent to prison and me as a minor

[14:21] silent partner got slammed with 20 straight months of legal costs warehouse costs and heavy fines Including costly errors made by my attorneys the variety of calamities He says has left me bewildered even possibly thinking about a demonic angle Then the letter goes on about how to donate and how he appreciates it and all that now You know what I have to say. Sorry Jim. I have no sympathy for you. I was there 30 years ago I watched each and every gringo and expat I ever knew get swindled some of them big-time like a really good friend of mine Who came to Costa Rica because of me a guy from Texas? He owned a chain of children's clothing stores called gadzooks was a multi-millionaire He was a buddy of mine from high school in Chicago wanted to come down with his new wife get off the treadmill

[15:10] Get away from it all my big mistake was that I introduced him to my lawyer Of course, he wanted to buy some land. So he did need a lawyer. Who else was he gonna ask but his buddy Johnny? Now unfortunately, you probably heard you mentioned this in the past when you're in Costa Rica You need two lawyers a straight arrow guy if you could find him and a guy who can work this system and pay bribes when necessary Well, unfortunately, I introduced him to my sleazy lawyer first and unbeknownst to me My sleazy lawyer got him involved in a deal and my buddy lost 750,000 bucks and that was some 30 years ago Luckily, he remained my friend. That's right. Costa Rica even 30 years ago was filled with landmines and scammers gringo and Latino I watched how crooked realtors sold the same piece of real estate and beachfront property over and over again

[16:01] I watched clueless gringos who'd only been in the country a week or two by options on land that look good on paper But did not exist in the land registry I watched developers build first-world projects on land that was under false title and later sold to clueless gringos who never did Probably never will get final title to the land so they can never sell it Why because of age-old land disputes with farmers and squatters, etc I watched as a gringle friend of mine who had his zuzu trooper stolen Receive a phone call a couple days later from the people who stole his car offering to sell it back to him And in the end, that's just what he did cost him two grand to get his own car back and on and on But perhaps the best scam I have ever seen a lawyer pull in any Latin American country is this and it happened and keeps

[16:48] Happening in Costa Rica. Where else? You know when you're talking to your lawyer, it's by lawyer-client privilege, right? It's understood your attorney could or should never disclose details about your case or about your life Well, you know what happens in places like Costa Rica where gringo speak almost no Spanish and you always hook up then with a lawyer Who speaks English eventually he gets to be your friend He invites you to house parties and soccer games sporting and kids events Christmas New Year's and kids seños parties and backyard Barbecues you bond with them you tell them your life story and eventually or maybe not eventually maybe right away You start telling them about the little secrets that you have like for example that trouble you have with the IRS and why you don't want to go back home or That real estate deal that went sour and now you got a bankrupt partner

[17:36] That's after you or possibly your old people and left some loose ends behind like alimony or child support or worse like one Italian gringo I know who was set to face a grand jury But in the meantime, he took a vacation to Costa Rica and didn't go back I've met gringos who won't go back to the states because they know they'll face other court charges like sexual abuse and date rape charges You know how easy it is these days they get hit with a rap like that real or trumped up Well knowing that gringos will often lay out their entire lives to their English-speaking Latin lawyer Which is not a bad thing at all. In fact, it's a very good thing if you've got an honest decent lawyer That's working for you and those guys by the way on the gringo tourist trail very hard to find now one time I was talking to a gringo friend of mine who did not want to go back to the states now some of you listeners might

[18:23] Remember I mentioned especially when I first came down I'd say about a quarter of all the gringos and expats I met that were living down here long term had some deep little secrets in the closet Which kind of set the stage for an unforgivable scam going down against gringos that I first heard of in Costa Rica Even way back when 30 years ago Anyway, this gringo friend of mine living in Costa Rica for probably five or six years by then Told me his lawyer was a lifesaver and that for reasons He didn't want to tell me he couldn't go back to the states and that he was lucky to have a lawyer who had a brother Or friend or cousin can't remember who worked at the US Embassy, you know Embassies here in Latin America are staffed with probably 95% locals and only 5% homegrown gringos You'll find that out when you phone up or walk into one of those places, which I don't recommend

[19:10] Anyway, this gringo friend of mine said he was so glad he had this particular lawyer who had a friend or relative working inside The embassy. In fact, my friend told me at the time way back when he received some news from his lawyer telling him to come into The office right away and when he got there the lawyer told him how lucky he was He had an insider in the embassy because the gringo's name popped up on some kind of bad boy checklist Which certainly freaked out my friend in the moment who then said to his lawyer. Oh, this is bad. What can we do? What can we do? You think I should leave the country? He said no, that's not necessary I think we can take care of it then the lawyer went and said my friend can lose your name off the list and My buddy said really he can do that lawyers It's sure but we'll have to give the guys something, you know in the end

[19:55] My buddy ended up paying the lawyer thousand bucks now when my friend told me this I didn't think too much of it. Except I knew it was right before Christmas time In fact, I forgot all about it till about a year later I was at one of these office Christmas parties are called convivios in Latin America It seems like every office in business in Latin America has one of these big blowouts a week or two before Christmas It's that one time a year where your boss pays for a dinner drinks gifts, etc Anyway, I was sitting next to another couple of gringos and seems like when you're with a group of gringos at a party Or anywhere in Latin America, especially on the gringo tourist trail the subject of crimes and misdemeanors always comes up Oh and the favorite subject of gringos when they get together lazy or thieving cleaning ladies Anyway, my ears perked up when I heard one of the gringos mentioned how great his lawyer was

[20:41] Got him out of a real jam because he had a friend a relative working in the US Embassy Ha ha Man, is that not a perfect scam picture this it's coming up on Christmas lot of expenses for everyone, right? Your crooked are slightly crooked lawyer as a couple of gringo clients who can really never go back to the States or they fear to Now he can play a little game called guess who's on the embassy shit list All of it totally impossible to check on or prove a brilliant scam You got to hand it to him though When you think about it a lawyer can only pull that scam once Maybe twice and remember this kind of crooked gouge the gringo stuff was going on in Costa Rica 30 years ago Well before the huge waves of clues gringo started piling in since then in 30 years

[21:28] You don't think the lawyers and gougers have found ways to fine-tune those methods That's why I've been saying for the past eight years since I've been doing this show I've been sounding the alarm about Costa Rica to anyone who listen That's why when I hear about people who have been scammed like Jim Willy. I just don't have any sympathy Sorry fool me once right and you know, sometimes it's the very high IQ brilliant gringo who gets sucked in and scammed the worst Because the truth is if you know, you're smarter than the average bear You think you're one up on everybody and above being conned? It can't happen to you. You're too smart Just remember the con in the con man is short for confidence, man. What's that mean? It's a bad guy who gets you in there confident. You know what? I've never met a con man I didn't like that's their stock and trade and the key to their success

[22:17] Oh, and you know, a lot of smart guys are full of themselves Everyone always telling them how brilliant they are and all that they're not low hanging fruit for the con man But they are the biggest juiciest fruit high up in the tree and ripe for picking and be honest It's kind of a guilty pleasure Isn't it to see a high rolling guy with dough who's full of himself get skinned a little by a con man All right changing gears now Let's talk about how Latin governments all Latin governments are following the same winding road to fiscal destruction That first world governments have meaning governments loading themselves down with massive debt You know, I get this weekly Latin American business journal in Spanish Of course and every single issue lists all the Latin countries and the new loans

[23:02] They're getting from the IMF or from the US or the World Bank China or the European Union They report on Latin government bond issues. Really? It just astounds me how much debt they've taken on that they'll never be able to repay in the end They have to default like Argentina does about every ten years. My question is who's buying these bonds? They're all junk bonds, really Well, it's got to be institutions bankers and Wall Street guys because we're talking about government debt here That's big time in the billions. You know how that works Don't you a Latin government like Honduras Guatemala Ecuador or whatever? They go to guys like Jamie Dimon who take a huge commission package that stuff up spit shine it and make it presentable to Corporate pension and Wall Street guys who need a high rate of return, you know third world country sovereign bonds pay huge interest rates

[23:48] Compared to US Treasuries often six eight ten percent and more and amazingly enough these things are in huge demand In fact reading right here. It says El Salvador just had a bond issue 30-year term seven and a half percent interest with the total demand It says five times as much as was issued But the day of reckoning is coming listen to this article It just came out on august 1st and the title finance minister says pain is necessary to put Ecuador's books in order It says when Richard Martinez took over as Ecuador's finance minister in may of last year the country's accounts were a mess President Lenin Moreno was picking up the pieces left by the previous left-wing government who in the past decade financed opaque oil loans with china It said nobody knew how much money Ecuador had borrowed from china nor how many barrels of crude it owed in return

[24:39] It says last may by the time. Mr. Martinez became finance minister of Ecuador They'd issued seven and a half billion in sovereign bonds in less than a year at eye wateringly high interest rates Then it says Ecuador has also secured an additional 12.2 billion in loans from the imf and other multilateral lenders Here's a quote from Martin des he says we don't want to keep flooding the world market with Ecuadorian paper But we cannot categorically rule out any more debt issuance Then it says another 4.2 billion comes from a three-year lending package from the imf The rest comes from the latin american development bank caf. That's 1.8 billion the world bank loan 1.7 billion inner american development bank loan another 1.7 billion and many others Then it says success in paying off these loans, which never seemed to get paid off depends on the price of oil

[25:30] Right now it says there's sure to be an increase in taxes including Iba the vat or sales tax a measure which will surely be unpopular especially with Ecuador's poor Then it says recent memories of imf interventions in Greece and argentina do not inspire optimism or confidence In the likelihood that Ecuador will be able to resolve its debt problem All right The reason i'm bringing up this stuff and it may seem dry to you But it's the same with every single latin american country It seems week after week month after month. I read how they're just piling on more and more debt Usually by issuing bonds or taking out straight loans from the imf That just tells you they can't live within their means on tax revenues alone. Meanwhile their elected criminal class of politicians live high on the heart

[26:15] Everyone here knows Politics is the road to riches The thing is every small country would love to ramp up the printing presses But you can see what that did to Zimbabwe and Venezuela the rest of the world won't have it causes hyperinflation So in lieu of printing money or raising taxes you float bonds you take out world bank and imf loans And of course invite the chinese in so what's a gringo to do with the world to wash in debt The only thing you can do is get that plan b going get out of dodge And you want to have that plan b in a country where no one really cares about the government because no one really depends on government Handouts except people working for the government and those are people I have zero sympathy for Meanwhile in third world latin countries most of the populations living close to the earth They've got little truck farms driveway chickens and gardens everywhere with avocados and mangoes falling off the trees

[27:06] These are places where everyone's got a brother a sister an uncle a grandpa with a little farm or finca nearby When times get rough and for some people it's always rough You want to be around people who are survivors not dependent on government or government workers who are experts at absolutely nothing Useful just sitting on their dead asses surfing the net and gabbing on anti-social media. So How's your plan b coming? You've been listening to the expat files living in latin america If you need some help with your own plan b we can schedule a one-on-one phone or skype consult Just send me an email the expat files at gmail.com And if you want to get on the waiting list for my next week long expat insider seminar in central america Where you're guaranteed to get a two to five year head start on your plan b

[27:54] Send me an email the expat files at gmail.com