Colina dos Ventos, clear and present danger

We've heard a rumor that European naturists are being offered the opportunity to "invest" in the Colina dos Ventos resort hotel near Tambaba Beach in Paraíba, Brazil.

Given the details we've heard, be warned: putting your money into Colina dos Ventos through this proposed deal is very much like putting your hand into a meat-grinder.

Normally we don't comment on rumors until they are confirmed. But if we wait for the news that some unsuspecting foreigner has already put up money, that money will be gone and unrecoverable. To remain silent in the face of clear and present danger is unconscionable.

The rumor

The rumor that has reached us is that a German naturist club was offered a 25% participation in Colina dos Ventos, for the sum of €100,000 (one hundred thousand euros). The offer was supposedly made by Mr. Marcelo Pacheco, who we were told claimed he had purchased 50% of Colina dos Ventos, and was looking to sell half of his stake.

Pacheco's 50% stake in Colina dos Ventos had, supposedly, been purchased by him with a promissory note from Mr. Celso Rossi, this note backed by a legal judgment that the Clube Naturista Colina do Sol won against the SBT Television network, in the sum of R$1,000,000. With interest and correction for inflation, that amounted as of last September to R$6.131.968,45, over two and a half million euros. 

Mr. Celso Rossi was to act, in some manner not fully made clear, as "escrow agent".

Besides being an investment, the German club was told, its members would be able to find year-round sun at Colina dos Ventos, including during the winter months when outdoor naturism is impossible in northern Europe. Colina dos Ventos is near two international airports, and six hours by air from Europe.

The Mutual Admiration Society

Someone who has been approached to invest, may feel he ought to disregard this post. After all, both FBrN and Brasil Naturista speak so well of Colina dos Ventos.

Indeed they do. And both Brasil Naturista and Colina dos Ventos speak well of the FBrN; and of course both Colina dos Ventos and the FBrN speak well of Brasil Naturista.

It's a mutual admiration society, and it's the same people with different hats: Pacheco is the editor of Brasil Naturista, sits irregularly on the FBrN's "Ethics Council", and is the guy asking for your good money in exchange for his kited stock. Before the Internet, Celso Rossi published the predecessor to Brasil Naturista, called Naturis; his Naturis company operated the Colina do Sol naturista area; and Rossiwas president of the FBrN, successor to previous Brazilian naturist organizations. Gullible foreigners were presented with a picture of all Brazilian naturists dancing in harmony, and naively threw their money down the rathole of Colina do Sol.

Now, the Internet exists, breaking the circle of mutual admiration. Various of Celso Rossi's enterprises required that papers be filed in assorted government offices, and we have rooted them out and brought them to the light of day, here and in www.calunia.com.br.

Why should anyone distrust the Colina dos Vendos offer? 

Two names stand out as immediate warnings: Celso Rossi and his cat's-paw, Marcelo Pacheco. Mr. Rossi's history of business deals with foreign investors does not inspire confidence; those of his investors not already naturists by conviction become so by necessity, having lost their pants. One, American Dana Wayne Harbour, lost not only his money but his life.

Both Rossi and Pacheco have a documented history of avoiding process servers. Mr. Rossi has been sought since 2003 in lawsuit 0000107-42.2003.8.17.0470 in Carpina, Pernambuco, not far from Colina dos Ventos, for asking damages for his having put pictures of naked children in the magazine he published, and selling them. Mr. Pacheco has been sought in similar cases, and is equally elusive when sought by process servers.

Left holding the bag?

The shares that Mr. Pacheco is offering for sale, were purchased with a promissory note. The potential investor is invited to consider his position, if the promissory note is not paid. The investor will be out his money, and the owner of Colina dos Ventos from whom Pacheco's shares were purchased, will not have been paid. If the owner has any sense he would declare the shares he wasn't paid for null, and tell the foreigner to see Pacheco in the Brazilian courts. Which are described below.

The potential investor, blinded by tropical sun and lulled by tropical sea, may think that this is an unnecessary worry. After all, the note is secured by a legal judgment against a solid TV network, in a sum more than ten times that of the face value of the note. What's to worry?

Plenty, in fact.

The SBT judgment

The SBT judgment is quite real. It is also under appeal. It took four years for the trial court to reach a verdict, and appeals may take as much or longer. The usual tendency is for such verdicts to be reduced on appeal. Also, the award was based on perjured testimony, and SBT can use that to ask that the judgment be set aside altogether. The SBT money is not a bird in the hand, but one very much on the wing.

Besides not being final, there is the significant fact that it's not Celso Rossi's money. He has as much right to issue promissory notes backed by the SBT judgment to CNCS, as I have to issue notes backed by the British Crown Jewels.

Celso Rossi and his family sold nearly all their interest in Colina do Sol on the last day of 2004, to Silvio Levy. The suit against SBT was brought nearly a year later. Nothing in the bill of sale retains any rights to possible future judgments. Celso's children retain some interest, but there is considerable doubt on that; the shares are numbered and all those they retained are among the shares issued in a deal later annulled by the courts.

The debts of Celso Rossi

Even if Mr. Rossi were to get some of the SBT money, at some distant date, there is a long line of people with claims against him.

There is public bank BRDE, which made a loan to Celso's last naturist enterprise, the Hotel Ocara, which Celso cosigned for. Celso lost interest in doing his part and managing the project once he could no longer lure investors, few payments were made, and the debt is now over €150,000. He also gave the bank a mortgage on a plot of land on which he claimed the hotel was situated (it's not) and the bank has put a lien on that, and is collecting from Mr. Rossi and his ex-wife. The bank, or others, may well have first claim on any money that may come to Mr. Rossi.

Eldorado Pelado - Naked Eldorado

Once cannot criticize Mr. Celso Rossi  for the size of his dreams, or the size of his promises. It is however instructive to compare the vision he sold of the Hotel Ocara and Colina do Sol in 2004, with the present reality. His dreams may command our admiration, but they should not receive our savings.

I do know know exactly what has been promised to potential investors in Colina dos Ventos, but am confident the ideas have been recycled, and suspect the text has, as well. Anyone considering parting with their money should think very carefully about the man's previous enterprise, before financing his next.

The financial projections he offered to BRDE  bank are available, and I have analyzed them. The analysis is in Portuguese. If the reader cannot follow financial information in Portuguese, he should ask himself whether he ought to put his money in something he can't understand. (Some Latin phrases may be understandable, such as concilium fraudis.) If that does not give pause, consider that I got the papers from the bank's lawsuit to collect the loan.  That should be all one needs to know about a Celso Rossi project. Do you really want to ever be in a position to need to learn more?

Mr. Rossi has often presented his Colina do Sol enterprise as being of vast value. I attempted to calculate the worth of the place last year, using the usual procedures for such things, and came up with a number vastly lower than that waved about by Mr. Rossi. I did notice that declaration of the net worth of the company owning the Ocara Hotel, presented to BRDE Bank on Nov 19, 2003, was signed by the accountant, but the space where the "responsible for Ocara" should have signed, was carefully left blank Equally, a declaration that Colina was worth several million which Celso supplied to the Taquara Labor Court, was signed by a local real-estate agent - and, again, not by Celso Rossi.

Getting someone else to sign pieces of paper that say things that aren't true might be a strategy to avoid prosecution for fraud. If you are looking into Colina dos Ventos,  and are offered papers which are signed by people other than those you'd expect, be wary, and in turn don't sign papers, especially cheques.  

Bank Loans

When Brasil Naturista began to carry glowing reports of Colina dos Ventos, it seemed clear that something was in the wind, and the sort of thing it's better to be upwind of. I had guessed that it would be an assault on the public purse, along the lines of the BRDE loan to Ocara.

That Marcelo Pacheco may be enticing foreigners to give him money for stock he bought with an IOU, doesn't mean that some plan is not also moving forward in parallel to float an unpayable loan. If the bank takes Colina dos Ventos before the mirage of the SBT money evaporates, the former owner of Ventos might well not kick: at that point whoever gave Pacheco money would have not half the assets, but half the liabilities. Easier to part with.

Legal recourse

A potential investor who has read this far, may well be thinking, "Ah, but if I'm cheated, I just go to court." The SBT indemnity took four years already, and it's far from being paid. In one of the cases against Celso Rossi and Marcelo Pacheco, one of the plaintiffs died before papers were ever served formally notifying the pair of the suit. And Brazilian law is odd. Even what would elsewhere be a rock solid guarantee, such as a first mortgage on the land, or even a properly registered deed,  might be superseded by prior - or posterior - suits for unpaid wages or other obligations under labor law, perhaps even prior debts of other part owners. Assets that former owners had sold, might be clawed back. Under what circumstances can this happen?  I don't know the answer, I'm not a lawyer. But the reader should consider that if he didn't even know the question, he should not be considering putting his money into Brazil. And certainly not into the hands of Marcelo Pacheco and Celso Rossi.

The Belgian with the beach

If you truly want to put money into Brazil, read this site: http://www.myhouseinparadise.com/, see the list of guarantees he offers, and ask Colina dos Ventos about the same issues of land registration, freehold, etc. No, it's not naturist, but the article on the place that ran in Brazil's largest newspaper, the Folha de S. Paulo, on 26/12/2009, was illustrated with a photo of a naked child running on the beach, free and unconcerned. Which you won't be, if you give Marcelo Pacheco your money.