Nicaragua's idyllic Pearl Cays stirred dreams of ownership for rich foreigners, but buyers didn't expect a title dispute

Legal storm rocking island `kingdom'
Special to The Herald

PEARL CAYS, Nicaragua - At home in England, Jayne Gaskin dreamed of paradise: white sand, turquoise water and bowed palm trees with fronds floating on a soft, salty breeze.

So she got online and started navigating until she found a Web page for a company owned by Miami resident Peter Tsokos, imploring potential buyers to be the owners of their ``own kingdom in today's developed world.''

On that page, Gaskin discovered Nicaragua's Pearl Cays. She bought one of these small Caribbean islands for a little less than a quarter of a million dollars.

Little did she know, however, that her newfound paradise was about to become part of a stormy property dispute: first with local Creole and indigenous communities that say the cays are theirs, and second with the Nicaraguan government, which insists that islands in this country cannot be bought or sold.

Both are demanding that the courts declare null and void the contracts for seven Pearl Cays that Tsokos bought and then sold to Gaskin and others.

Tsokos maintains that his business dealings are legal and that the claims on land he bought and sold are politically and economically motivated.

But María Luisa Acosta, a lawyer working on behalf of local communities on a case against Tsokos, says, “This is one of the most perverse effects of globalization. People see property on the Internet in another country where they don't know the language, culture or the legal regime behind what they are buying. They think it looks like paradise, and they are right. The only problem is the islands don't belong to the man selling them.”


At the click of a mouse, cays that indigenous people have used and valued in their natural state for centuries have attracted the attention of foreign investors interested in developing tourism projects.

This conflict -- brewing on one of the last great, unspoiled stretches of the Caribbean -- is emblematic of a problem across the Americas in which pressures to develop natural resources and promote foreign investment
are colliding head-on with a growing awareness of the need to protect the rights and lands of indigenous cultures.

The Pearl Lagoon basin, on Nicaragua's southern Atlantic coast, is home to about 17 indigenous and black Creole communities. A few miles offshore are the picturesque Pearl Cays.

For as long as anyone can remember, the fishermen of Pearl Lagoon basin have collected fresh water from the cays, harvested coconuts, dug up turtle eggs from the sun-baked sand, and used the cays as places of rest and refuge on extended fishing trips.

All of that changed a couple of years ago when, the locals say, their access to some of the closest cays was restricted. They soon found out that a Greek-born American citizen, Peter Tsokos, had bought seven of the cays for -- according to lawyer Acosta's research -- a total of about $20,000 from people who held age-old deeds to the islands.

A 39-year-old engineer, Tsokos has lived in the United States for about nine years -- between Texas and Miami -- and has been a citizen for three. He also has had Nicaraguan residency for about seven years.

After buying the cays, Tsokos placed them on his Web page and has since sold them to American, British and French buyers, among others, for an estimated total of more than a million dollars.

The new owners of the cays raised flags of different nations on the islands, built homes or tourist facilities and even changed the cays' names. Before long, the cays were manned with armed police ordered to keep all trespassers away.

Some of those trespassers were the local indigenous and black Creole fishermen.

“The land is like our mother; if we lose it, we won't survive,” says Henry Archibald, an authority in a Miskito Indian community in the Pearl Lagoon basin. “If we lose these cays, we are losing the tradition of our forefathers, which we have to protect for our children.”

Tsokos' purchases and subsequent sales are all duly inscribed in local property registries. He says he has done nothing wrong.

“There is plenty of indigenous land here, and I'm not against it, but I don't have indigenous land,” Tsokos says. “The land I have comes with papers and it's registered. We look for land that's registered. I don't take a property if I don't think the papers are good. It's not worth my time.”

The legality of the sales has been questioned on two fronts. Acosta, who has researched the sales of the cays, maintains that there are a number of irregularities in the deeds on which Tsokos bought and sold the cays.


Nicaragua's attorney general's office, which opened legal proceedings against Tsokos, says the original titles are illegal because they violate laws that declare Nicaraguan islands inalienable state property.

Beyond the legal merit of the property titles, Acosta says, Nicaragua's constitution and laws, and precedents in international law, support the indigenous people's claims to the lands that they use as part of their customs and traditions.

The attorney general's office agrees. Lisandro D'León, who is representing the Nicaraguan government in the case against Tsokos, says that if the state wins back the islands, it would guarantee the Indians permanent use of the cays.

''We are going to win this case, and there's not going to be compensation for the people who bought the islands,'' D'León says. “They made a bad deal.”

The government lost the case in a local court but has appealed.

Cay owner Gaskin says that if the government wins the case, it would send a terrible message to potential foreign investors whom Nicaragua is deeply interested in courting.

The situation is growing increasingly tense. Just two weeks ago, assailants entered Acosta's home and murdered her husband, but stole nothing. The crime is still under investigation. Tsokos says his life has been threatened.

Many here fear that unless there is a speedy resolution, the situation could spin out of control.

“The people in my community want to go out there and do something bad, but I keep telling them that if they do that, they could go to jail,” says Miskito Indian authority Archibald, who adds, “I won't be able to control them much longer.”