The growing role of technology in Brazilian organized crime

A multi-federal and state task force in Brazil has destroyed cell towers and illegal cell phone stores as organized crime exploits the technology for its criminal purposes.

The operation began on August 6 and involved raids on several points in an area controlled by Brazil's most powerful criminal organization, the First Capital Command (Primeiro Comando da Capital – PCC), in the state of São Paulo.

Authorities aimed to dismantle the criminal logistics of the group, which increasingly uses technology to coordinate drug trafficking, commit fraud and evade capture. Targets included illegal PCC cell phone stores and communications towers that powered surveillance systems the gang used to intercept messages from the São Paulo Military Police (Polícia Militar do Estado de São Paulo). Authorities believe the PCC used the intercepted messages to anticipate raids and evade capture.

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As Brazilian society becomes increasingly online, organized crime appears to be following suit. Brazil's Federal Police (Polícia Federal) believe that the PCC and Brazil's second largest criminal group, the Red Command (Comando Vermelho – CV), have set up call centers across Brazil to carry out scams online and by phone. But it's not just the powerful PCC that is turning its attention to cybercrime.

With the advent of online banking in Brazil, it is now easier to steal money remotely as criminals trick their victims into transferring cash or confidential information by phone or email. This has led to virtual crimes becoming more common in Brazil while other types of crime are declining.

Even though the number of violent crimes is declining, the danger in the virtual world is growing

Property crimes such as robberies and violent crimes such as murder have essentially declined in Brazil. However, virtual fraud continues to grow, targeting an increasingly digitalized society.

Fraud has been on the rise for years, according to the latest annual report of the Brazilian Forum for Public Security (Fórum Brasileiro de Segurança Pública). In 2023, almost 2 million such cases were reported, up from just over 425,000 in 2018.

And while fraud in general is increasing in Brazil, online fraud is growing the fastest. This includes scams such as phishing emails that trick people into installing malware to steal their identities. It increased by 13.6% between 2022 and 2023. At the same time, almost all forms of property crime cited in the report decreased during this period.

A digitalization pandemic

This trend was likely exacerbated by the COVID-19 pandemic. As people were forced to stay in their homes and many industries – like banking – moved their work online, criminals preyed on their victims.

“The pandemic has accelerated the process of digitalization, the process of digital inclusion, and this has resulted in the state and institutions not being able to keep up with crime. Crime does not need to legislate; crime does not need to create processes, procedures or regulations – crime simply does what it considers necessary,” said Fábio Diniz, founder and chairman of the Brazilian National Institute for Combating Cybercrime (Instituto Nacional de Combate ao Cibercrime), in an interview with InSight Crime.

This is especially true for the financial sector and online payment methods such as Pix. According to the World Bank, more people in Brazil have bank accounts and make digital payments than in any other country in Latin America.

After Pix launched in 2021, gangs began kidnapping victims and then transferring money from their phones with just a few clicks in the app. These groups worked in teams, with one watching and attacking the victim while the other monitored the accounts and made sure the transfers went through.

But while Brazil's massive investment in street policing may reduce the number of property crimes such as robberies, criminal groups may find virtual fraud a convenient and cost-effective complement to their schemes.

To pull off a robbery, a group may need weapons and a getaway vehicle. Once the police are called, officers can begin analyzing camera footage, identifying perpetrators and tracking down vehicles. In Brazil, violent crimes tend to be punished more harshly, which increases the cost of a robbery, Diniz explains.

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In contrast, virtual scams mainly require an internet connection. A phone call or email can be enough to get someone to transfer money, and even if the success rate is low, thousands of people can quickly become targets. Anyone on the internet is a potential target, and crimes can be committed far from their victims. Tracing virtual crimes to their perpetrators is difficult, and because they are non-violent crimes, penalties are less severe in Brazil.

A police operation in July arrested 34 suspected members of a cybercrime gang in São Paulo. The criminal group was responsible for a range of online crimes, including fake car auctions, online shopping scams and the theft of social media and WhatsApp accounts. Most of their victims were in the state of Pará, thousands of kilometers to the north.

However, the physical and virtual worlds often overlap. For organized crime, smartphones are now an entry point into the virtual criminal world. And while overall street crime is declining, the demand for phones has led to an increase in non-violent cell phone thefts. Nationwide, the number of stolen cell phones has increased year over year, increasing by over 42.5% from 2020 to 2023.

The next generation of criminals is created by the Internet

As organized crime finds more and more opportunities on the Internet, tech-savvy teenagers are also emerging in the digital underworld.

In September 2023, Brazilian police uncovered the activities of a 14-year-old cybercriminal. The teenager is accused of leading a gang that hacked into the government's official security systems and sold their logins and passwords online. The group used this access to falsify official information and documents from the police, army and judiciary.

In addition to creating their own groups, large criminal organizations may also be turning to young people to increase their cybercrime activities, said Samira Bueno, executive director of the Brazilian Forum for Public Security. “We have found that young people are involved in these [virtual] “They are not willing to commit fraud because they are more knowledgeable about the Internet than the gang leaders,” she said in an interview with InSight Crime.

While cybercrime is on the rise, other crimes appear to be declining in this age group. The number of Brazilian youth in juvenile detention fell to around 12,000 in 2023, a 56% drop from the peak of nearly 27,000 in 2016.

This is partly due to Brazil's investment in street-level policing, which appears to have led to a decline in the number of robberies committed by teenagers. However, the decline does not necessarily mean that young people are committing fewer crimes. Rather, it suggests that at least some teens are moving from the streets to online crime, where they are less likely to get caught, Bueno explained.

Prison bars cannot stop the Internet

Brazil's prisons, which have long been hotbeds of organized crime, are now rife with mobile phones as criminals commit fraud while in prison.

Technology has made it easier to communicate from anywhere in the world, and increasingly smaller phones are harder to detect. Some Brazilian prisons are said to have more cell phones than inmates, as inmates continue to commit cybercrime behind bars, Bueno explained.

The availability of smartphones allows inmates to conduct virtual scams and extort money from inside prison. In a common type of extortion, criminals find a victim's personal information and contact a relative of the victim outside of prison. The scammer claims the person has been kidnapped and demands payment for their release. An investigation into these scams was launched after a man spent 20 hours on the phone in October 2023, being threatened by criminals. Authorities struggled to find the perpetrators, who were largely able to cover their digital tracks. But when authorities finally tracked down the leader of this extortion gang, he was already in prison in Rio de Janeiro.

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Smaller groups sometimes use the power and fear of Brazil's major criminal organizations to pull off their scams. For example, in 2022, inmates called vendors in the São Paulo metropolitan area, pretending to be members of the PCC and demanding payments through Pix to free a PCC leader from prison. The criminals threatened people who refused to pay, and some of the victims transferred the money, believing the callers were actually members of the PCC who would harm them and their business if they did not pay.

Brazilian authorities have discussed the possibility of installing signal blockers in prisons to prevent inmates from using smartphones. While police officers generally support the use of the technology, prosecutors who focus on criminal networks warn that it could hamper their investigations, which rely on wiretapping and surveillance in prisons.

Prosecutors use these mechanisms to obtain a lot of important information from criminal groups that would not work with the blockers. “It turns out that, other than the highest security federal prisons, not a single prison has blockers,” Bueno said.