Where abouts of fugitive financiers still mystery

If you had $100-million and a dream of a new life, where would you go? How would you get there? Could you slip into Panama by yacht? What would you do when you arrived?

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These are questions being asked about Ron and Loren Koval, who are accused of one of the biggest frauds yet carried out in Canada without the aid of the stock market.

The couple, both 49, have managed to stay out of sight for more than three weeks despite the efforts of Toronto police, Interpol and the U.S. Coast Guard, among other agencies.

On slim evidence, police have speculated that they went to Florida and acquired a powerboat big enough to cross the Caribbean, possibly en route to luxurious exile in Panama. They are nowhere to be seen right now in this muggy, bank-infested nation of 2.8 million, which doesn't mean they are not here.

Elsewhere, a forensic accountant who knows the outlines of the case nominated Costa Rica, next door to Panama, as an attractive hideout for such people. The Kovals are known to have made inquiries about marinas in Costa Rica in the months before they disappeared.

In Panama, their situation was the subject of merry debate on the weekend in places as diverse as the terrace of a fashionable Panama City apartment, a yacht basin on the Panama Canal and a seaside bar at the end of a bad dirt road on the country's stunning Caribbean coast.

There was no consensus on whether Panama is still so openly corrupt that rich fugitives could buy citizenship outright, although it certainly once was.

"I've been around a few places in my life, but I've never been in a place where I've heard more adventures, more amazing stories, than in Panama," said David Smale, 44, a retired U.S. Air Force chief master sergeant who stayed behind after being stationed here.

The lines of discussion included these:

Could the Kovals have come here by yacht? Easily. People with money and know-how could buy an inconspicuous 15-metre cruiser on the U.S. East Coast and drive it to Panama without leaving a paper trail or hiring a professional crew, yacht sailors said.

These are questions being asked about Ron and Loren Koval, who are accused of one of the biggest frauds yet carried out in Canada without the aid of the stock market.

The couple, both 49, have managed to stay out of sight for more than three weeks despite the efforts of Toronto police, Interpol and the U.S. Coast Guard, among other agencies.

On slim evidence, police have speculated that they went to Florida and acquired a powerboat big enough to cross the Caribbean, possibly en route to luxurious exile in Panama. They are nowhere to be seen right now in this muggy, bank-infested nation of 2.8 million, which doesn't mean they are not here.

Elsewhere, a forensic accountant who knows the outlines of the case nominated Costa Rica, next door to Panama, as an attractive hideout for such people. The Kovals are known to have made inquiries about marinas in Costa Rica in the months before they disappeared.

In Panama, their situation was the subject of merry debate on the weekend in places as diverse as the terrace of a fashionable Panama City apartment, a yacht basin on the Panama Canal and a seaside bar at the end of a bad dirt road on the country's stunning Caribbean coast.

There was no consensus on whether Panama is still so openly corrupt that rich fugitives could buy citizenship outright, although it certainly once was.

"I've been around a few places in my life, but I've never been in a place where I've heard more adventures, more amazing stories, than in Panama," said David Smale, 44, a retired U.S. Air Force chief master sergeant who stayed behind after being stationed here.

The lines of discussion included these:

Could the Kovals have come here by yacht? Easily. People with money and know-how could buy an inconspicuous 15-metre cruiser on the U.S. East Coast and drive it to Panama without leaving a paper trail or hiring a professional crew, yacht sailors said.

Other moorings, such as Jose Pobre, a hard-to-find hamlet reached by dirt road northeast of Colon, would be convenient mouseholes for fugitives who made arrangements to be met by Panamanian help.

Even so, there was no sign that the Kovals passed this way in recent weeks. A day spent showing their photo around the coast yielded just one possible hit. Marcus Konrad, a Swiss who runs a small inn and marina for yachts at Jose Pobre, said Ron Koval looked like a man who visited about four years ago, although he did not recall him as having extensive acne scars, one of Mr. Koval's distinguishing features.

Farther along the coast, there are idyllic places with no roads but regular flights to the capital -- domestic flights without immigration control.

Sailors stressed that the Kovals almost certainly would not try to reach the Pacific via the canal, a trip that would require them to show documents and take aboard a pilot and line-handlers.

What crimes are they accused of?

In part, they are alleged to have looted the King's Health Centre, a glitzy downtown Toronto medical clinic they helped to found, of several million dollars.

That is the least of it, however.

In the days after their disappearance, police estimates of the amount of money involved ballooned from $3-million to $12-million to $50-million to $100-million.

The big losses appear to have been suffered by financial institutions that bankrolled the Kovals' medical-equipment leasing business, which was supposed to buy big-ticket items such as magnetic resonance imaging scanners and lease them to hospitals.

They are accused of writing fictitious leases involving non-existent equipment and somehow contriving to grab the money and run. This is a feat equivalent to taking out a mortgage on a house without showing the bank the title.

How likely is it they came to Panama, by sea or otherwise?

The odds may be against it, but few other places seem as good a bet. Among the rival possibilities: Belize, Brazil, the Cayman Islands, Costa Rica and various South Sea islands.

Panama has more banks than are strictly required to meet the needs of its people and a reputation as a money-laundering centre for criminals. A government brochure calls it "a safe international haven for money attracted by tax exemptions and the absence of exchange restrictions and controls."

Mr. Koval is believed to have visited both Panama City and Miami earlier this year, possibly to arrange money transfers.

He is known to have had dealings with an obscure Caribbean bank that is formally barred from doing business in Panama. Whether it obeys that rule is unclear, but Panama City is home to one of the guiding minds behind the bank, which also has low-profile representatives in Miami.

Panama also has a large foreign community, chiefly American, and more modern amenities -- at least for those with money -- than many parts of Latin America.

On the other hand, the Kovals appear to have laid a series of false trails, making phony hotel reservations, lending a friend a credit card to use in Jamaica and so on. Any clues pointing to Panama may have been planted to point away from their real destination.

What kind of official reception would they get, and what kind of safety could their money buy?

With scores of millions to play with, the Kovals presumably would not wish to spend the rest of their lives hiding. Canada has no extradition treaty with Panama, but a Canadian fugitive could not count on being allowed to stay indefinitely. A Panamanian citizen could.

Almost no one here doubts that the Kovals could bribe mid-level government officials to give them authentic-looking passports and other identification if they had the right contacts. The question is whether they could get real citizenship that would hold up in court if the documents were challenged.

Under light-fingered dictators from the late 1960s to the late 1980s, Panama's five-year waiting time for citizenship could be miraculously shortened for enough cash. Opinion is divided on whether that is still the case. Expatriates tend to say yes, Panamanians no.