Fraudulent Transactions Detection in Costa Rica: Corrupt Notaries Facilitate Property Registration Scams Amid COVID-19 Pandemic

A wave of property registration fraud has hit Costa Rica, with at least 50 public notaries colluding with organized crime groups to steal properties and transfer ownership illegally. The scheme targets high-value real estate areas, such as Guanacaste and Puntarenas, leaving victims with financial losses and lengthy legal processes.

How the Scam Works

According to Walter Espinoza, director of Costa Rica’s Judicial Investigation Agency (OIJ), criminals scope out neighborhoods to identify abandoned or unoccupied properties. They then speak to neighbors to gather information about the property and its owner. The corrupt notaries perform illegal transfers, allowing the properties to be sold or used as collateral.

Organized Crime Groups

The OIJ has identified several organized gangs, with subgroups specializing in specific roles such as:

• Notaries
• Intermediaries
• Impersonators

Espinoza warns that these groups are highly organized and have established functions, making it difficult for authorities to detect and prosecute them.

Pandemic’s Impact

Experts point out that the pandemic has created an ideal environment for property theft. Many foreign landowners have left their properties unattended due to travel restrictions and fear of flying. The absence of owners benefits fraudsters, who can target foreigners using publicly available registries of arrivals and departures.

Weaknesses in Costa Rica’s System

Costa Rica’s real estate law expert Alan Garro notes that the country’s centralized National Registry, where property titles are recorded, is vulnerable to corruption. Additionally, the “fe pública” legal code, which requires anything recorded to be taken at face value unless proven otherwise in court, allows criminals to rent properties and assume ownership using fake identification cards.

Challenges for Victims

Authorities have previously dismantled groups dedicated to property fraud, but victims often face lengthy and costly legal processes that can take up to eight years to resolve. Non-citizens are particularly affected, as their cases are typically given low priority.

Government Efforts

The Costa Rican government is working to detect and prevent fraudulent transactions, but the scale of the problem suggests that more needs to be done to combat this type of crime.