Unusual fraud trial in San Carlos

SC courthouse
Supporters of Diane Maxwell in front of the San Carlos municipal courthouse. Photo by Bob Jensen.

A most unusual trial in San Carlos

by Eric Jackson

No perp walks and a bunch of Spanish legalese that a lot of interested parties just barely understood, even with translation. Television was not there. But the May 20 fraud trial of Rose Bourgeois and Peter Vermeltfoort in the San Carlos Municipal Court was quite remarkable. In Panama there is a long-standing practice, not anywhere written in the law, that when a foreigner is defrauded by either a Panamanian or another foreigner, this is a matter for prosecutorial laughter rather than action. The few exceptions to this over the years tend to have the aroma of bribery to get prosecutors to break from the norm. But here were Bourgeois and Vermeltfoort, accused of cheating Diane Maxwell out of some $100,000 for a house for which she paid and didn’t really get. There are also claims for outrages and anguish along the way.

If the claims for compensation and the criminal charge confuse you, in the Civil Code legal systems it is common enough to include monetary damages or restitution of property as part of a criminal judgment. And if people accused of stealing $100 grand walk to court from their cars instead of being transported from jail or house arrest by police, welcome to the class bias of Panamanian justice.

One of the reasons why this case may have gone to court at all is that Maxwell’s claim is one of at least eight — all with different details but all about how people paid money for houses they didn’t get or from which they were driven shortly after getting — against Bourgeois and Vermeltfoort. It has been going of for years, through changes in government and of shifting balances of public opinion that enduring politicians have had to contend. Does someone think she or he is untouchable? What’s that aristocratic Panamanian surname? Error number one, to think that influence will necessarily last forever.

These are disputes among Canadian expatriates, and at the heart of some of them is an offer common enough in parts of Canada but out of synch with Panamanian law, the idea that one might own a house that is separate from any other dwelling but not the land on which it sits. Yes, there are condominiums and the sort of land tenure that the defendants were selling may not be specifically illegal. However, nobody seems to know how to do the paperwork for it, such that a proper deed (escritura) might be issued. Especially so when there has been neither a survey nor a subdivision of the land. Now people might at least know to run as fast as possible away from any such real estate offer in Panama. However, a lot of intelligent North Americans didn’t and some of their errors were compounded by the mistaken notion that dealings with fellow expats from the same country are more trustworthy than dealings with Panamanians.

A typical scenario, according to Maxwell’s supporters, was that someone would have paid a large part of the price for a house built by Buorgeois and Vermelfoort, then there would be an attempted closing scene in which the buyer would demand a deed that was not forthcoming and refuse to pay the balance. So Bourgeois and Vermelfoort would say that the buyers defaulted and don’t get any refund.

Maxwell’s case was different, in that she actually got a house, actually lived in it, but was driven off. To hear the sellers’ side of it, Maxwell didn’t pay maintenance fees. Maxwell said that the sellers refused to accept her payments of these, which she then made through the corregiduria. In her claim and others, there are tales of hassles great and petty, a big one being getting locked out, either for entry and egress of cars or from the home itself. There are back and forth charges of harassment and intimidation by various parties, some of them so unspecified as to be reasonably presumed false. But there were instances in which the police or people from the corregiduria had been called in to be present for angry scenes and this might be one reason for the unusual trial — these endless disputes were disturbing the peace.

In court the defendants’ lawyer began with a motion to quash, some of its on procedural things like a translation allegedly not being properly certified, some of it on vague allegations that witnesses had been intimidated, some of it about allegedly bad arithmetic but most fundamentally that this was a contract dispute and should be a civil rather than a criminal case. The judge found that there were sufficient allegations of fraud to continue the case as a criminal matter and denied the motion to quash.

After a day of arguments over which testimony was relevant and in proper form and then closing arguments by the prosecutor, Maxwell’s private prosecutor and defense counsel, the case was adjourned with a verdict to be handed down in two or three weeks. If there is a criminal conviction, any prison sentence of four years or less can be avoided by the payment of a fine. But even then, in the event of a conviction Panamanian immigration authorities could move to expel the foreign convict from the country. Bourgeois, however, is the mother of a Panamanian child and in those sorts of cases deportations are unusual. Whether or not books get thrown, a conviction would very likely shut the Bourgeois and Vermelfoort business down and send them elsewhere.

This case comes at a time when some foreigners stand to lose condos for which they have in some cases fully paid in the beach communities of Panama Oeste and Cocle, as part of the bankruptcy and alleged fraud matters of the Gálvez family. It is a time when there are a lot of mostly empty condo towers along the beach — some of them built to abominable standards — and there are more towers under construction. So this in the scheme of things small case in a small courthouse on a side street of the small town of San Carlos could have some big consequences for Panama’s real estate sector. Whatever the decision, up in Canada there will be people who are thinking about moving here to live — or about coming here to swindle people — who hear about what happens in this case.


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