The Web of Illicit Economies Ensnaring Durán, Ecuador

At the heart of Durán’s transformation into Ecuador’s epicenter of organized crime lies a complex web of interconnected criminal economies. These illicit activities have not only reshaped the municipality’s landscape but have also become deeply intertwined with its social, economic, and political fabric.

From the pervasive issue of land trafficking to the corruption that has infiltrated every level of governance, Durán’s criminal underbelly is as diverse as it is alarming. The local drug trade flourishes alongside international cocaine trafficking operations, while extortion and kidnapping prey on businesses and residents alike. Money laundering schemes blur the lines between legitimate enterprises and criminal networks, further complicating efforts to combat organized crime.

Undermining the financial bedrock of Durán’s gangs requires understanding how these criminal economies interconnect.

*This article is part of an investigation exploring criminal dynamics in Durán, Ecuador’s primary organized crime hotspot and one of the world’s most violent cities in 2023. Read the other chapters of the investigation here or download the full report (PDF) here.

Land Trafficking

Durán’s criminal ecosystem is shaped by land trafficking. This criminal economy used to be dominated by loose networks of corrupt political and land-owning elites. These elites colluded to profit from Durán’s illegal settlements and used criminal groups to enforce their will. Today, the criminal groups have largely pushed out and replaced the land-owning elites, colluding with corrupt political players to become the new land-trafficking force.

The colonization of Durán has occurred in an ad hoc manner. One local described this process in the late-1980s as being galvanized by the newly-designated municipal government, which encouraged settling on what authorities considered unused land: land whose owners had failed to plant crops, build a house, or develop it in some commercial way. Unused land was deemed “abandoned” and auctioned off to people like the resident who spoke with InSight Crime.

In this particular case, the new owner went to the area in question and drove stakes into four corners of a swampy ridge. He then got a deed and began building his home, only to receive a visit from the previous owner. During the heated discussion that followed, the new owner told the old owner that he should file a lawsuit in court. Instead, the old owner returned that night with a sledgehammer, which he used to smash the walls of the half-constructed home. The new owner said he then sued, and the old owner absconded, never to be seen again.

Such disputes were commonplace in Durán, according to Durán residents, politicians, and experts interviewed by InSight Crime, and land tenure remains an ongoing problem. Today, Durán’s irregular settlements are contained primarily to five large zones that cover more than a quarter of the municipality’s urban area, according to official documents seen by InSight Crime. While some are in the process of legalization, that process can drag on for years.

Former Mayor Alexandra Arce proudly told InSight Crime that her administration “legalized” over 11,000 homes during her tenure. Still, when asked for her estimate of how many remained illegal when she left office in 2019, she said flatly: “Probably over 60,000.” Ecuador’s 2022 census registered just 110,389 total homes in Durán.

The informality of the way land is governed means opportunity for criminal operators. In urban Durán, land traffickers grab large swathes of undeveloped land, up to hundreds of hectares at a time, according to a former Durán government official and a lawyer specializing in land trafficking. This land is often not zoned, lacks paved roads, or access to the water or sewer systems. But land traffickers stake it out, divide it into plots, and “invite” people to settle on it. They then sell each plot for prices ranging from $1,000 – $6,000, according to residents, a lawyer who specializes in land trafficking, as well as current and former government officials.

Despite the absence of public services and the uncertainty that comes with settling in what authorities consider an “invasion,” there is no shortage of buyers. Locals from Durán, residents of the poorest neighborhoods of Guayaquil, and transplants from other provinces often see these plots as their chance at a home, and they believe the government will eventually legalize their plot. Legally, anyone hoping to obtain a deed for informally settled land must also meet clear conditions, including having lived on the land for at least 10 years. In reality, land traffickers bribe municipal officials not to evict the invaders, several residents and current and former government officials told InSight Crime. 

The business has changed in the last five years. According to private security, residents, community leaders, experts, government officials, and a 2024 joint UNODC-municipal security plan seen by InSight Crime, violent criminal actors have almost entirely pushed out traditional land traffickers. Gangs largely follow the same pattern as traditional land traffickers, according to these sources. They identify undeveloped municipal lands near areas where they already have a strong presence and organize an invasion through word of mouth. However, while traditional land traffickers often disappeared into the background after selling off the land, armed gangs take control of the newly-settled sector, organize services, and establish links with the municipal government to influence the legalization process, residents, community leaders, a lawyer specializing in land trafficking, and government officials told InSight Crime.

Land trafficking sets the stage for numerous other criminal economies. Gangs use the territory to sell drugs, stash stolen goods, and set up protection rackets, extorting people and businesses alike. They manage the provision of basic services, such as water, sewage, and electricity, for which they can overcharge residents who have no bargaining power or leverage. 

“The main issue in Durán is land trafficking, not drug trafficking. Drugs pass through, they’re stored here, but the main thing is land,” the lawyer specializing in land trafficking told InSight Crime. “Durán is huge, and the mafias have now seen its business potential.”

Though formalization can bring gangs economic profit by increasing the value of plots that belong to gang members, it can also undermine their control of territory. That’s because the gangs present themselves as the residents’ guardians and protectors of their claims on the land. Once they have the deeds on their properties, residents no longer need the gangs. As such, gang leaders invest in corrupting municipal officials to influence when land is legalized, according to government officials and the lawyer specializing in land trafficking.

In many cases corrupt officials and gangs collaborate, splitting profits from trafficked land and opening up other possibilities to make illicit profit, including embezzling money through public works projects as is alleged in the case against former Mayor Dalton Narváez, something we cover in more detail below. This is why some residents, civil society leaders, the lawyer who specializes in land trafficking, and former officials say that settlements are run by a “mafia” – not a specific criminal group with fixed membership and identity, but a shifting network of power players, each with their own role in trafficking and legalizing the undeveloped land, then opening the door to other predatory behavior.

“Politicians change, but the criminal system remains the same,” a Durán community leader and resident told InSight Crime.

Corruption

Durán suffers from chronic corruption. From zoning permits to land deeds to infrastructure projects, there are a host of options for criminals to profit from public coffers. Many of these opportunities are the direct result of the chaotic development and lack of infrastructure in the area. Several residents, experts, and officials interviewed said they suspected that corrupt actors actively maintained these infrastructure and public-service deficits in order to perpetuate corrupt schemes. But aside from the staggering shortfall in basic public services, there is no documentary evidence to prove these allegations of willful, systemic sabotage.

The most-cited example of this neglect is for water. Estimates differ wildly, finding that from 42% (Ecuador’s 2022 National Census) to 70% (head of EMAPAD, Durán’s water authority) to 80% (the 2024 joint UNODC-municipal security plan) of residences in Durán do not have access to running water. EMAPAD says that even the houses connected to running water only have access for limited hours. Factoring in this limitation, the municipality meets only 23% of residents’ water needs, according to EMAPAD.

To obtain or supplement their water supply, residents turn to a fleet of tanker trucks. Referred to as “tanqueros,” these trucks bring the water directly to their neighborhoods. The hand-to-mouth nature of the business has made it ripe for abuse and the tanqueros often squeeze residents for a higher price and pocket the difference.

What’s more, the provision of water has often been controlled by corrupt networks embedded within the Durán municipal government. Associations of water tankers have attempted to bribe officials in the municipal government to give them exclusive rights to water delivery. As water delivery is profitable for municipal officials, they have had little incentive to invest in sustainable water infrastructure.

Such infrastructure projects, when they have occurred, have often been plagued by corruption and embezzlement. In April 2024, Ecuador’s authorities issued an arrest warrant for former Durán mayor Dalton Narváez on charges that he had siphoned off millions of dollars through public contracts seeking to improve Durán’s water distribution networks. In an interview with InSight Crime, Narváez blamed his predecessor for the missing funds and said that his life was in danger because of “delinquent groups” who had tried to assassinate him.

The head of EMAPAD, Rodolfo Baquerizo, told InSight Crime that although current Mayor Luis Chonillo’s administration is attempting to address the problem, decades of corruption at EMAPAD have left the institution in debt and government coffers empty.

“The drinking water and sewage situation in Durán is a disaster,” he said, adding that, “the reality is even more complicated than what we imagined from the outside.”

Microtrafficking

Durán’s street gangs make most of their money from peddling drugs, according to experts, residents, community leaders, and government and security officials. These include marijuana; cheap, highly adulterated heroin, known as “H”; and, more recently, cocaine.

Gangs sell drugs on street corners of territories under their control. They often recruit minors to deliver drugs and to sell them at local schools, where free samples are used to draw in new customers, according to community leaders, residents, government officials, and educators.

Many of those buying and consuming these drugs live in the sectors where they’re sold, and the municipality has a large population with substance abuse problems, according to experts, residents, and the 2024 joint UNODC-municipal security plan. Residents and police officials who spent years stationed in Durán also told InSight Crime that, in some cases, customers travel from outside sectors, including Guayaquil, as well as neighboring cities as far out as Milagro, Daule, and Yaguachi, to buy and consume drugs in Durán’s neighborhoods, especially in Cerro Las Cabras.

“It has become a epicenter for drug dealing,” one of the police officials said.

Ecuador has not done a comprehensive survey of drug consumption since 2016. InSight Crime spent months trying to obtain a copy of the 2016 report, but police sources say they can no longer access it. Since that time, the amount of drugs seized in Durán for internal consumption has increased nearly six-fold, going from 118 kilograms in 2016 to 692 kilograms in 2023, according to police data. Police refused to provide seizure data disaggregated by type of drug, however, in an interview, police told InSight Crime that marijuana, cocaine, and H are the most-consumed drugs in Durán.

Durán has one hospital and six medical centers, but no medical center specializing in drug rehabilitation, according to the 2024 joint UNODC-municipal security plan. This has driven demand for private underground rehab centers, which use abusive methods such as imprisoning patients and putting them on severe diets, the 2024 joint UNODC-municipal security plan found.

Extortion

In the last few years, extortion has exploded in Durán, as criminal gangs have become more sophisticated, expanding their ranks while increasing their arsenal and facing off with rivals. Still, the criminal economy is relatively new to the area. And InSight Crime found that the amount gangs demand, their modus operandi, and even victim profiles vary wildly as gangs’ extortion operations continue to evolve. 

In some areas, for example, gangs go door to door, demanding vacunas, or monthly payments, from small businesses, bars, and restaurants, as well as individual families, according to police intelligence and residents. In others, they set up checkpoints on roads, demanding that vehicles pay a “transit” fee.

Taxis are also easy targets. One Durán resident said that his friend, a taxi driver, pays $20 a month to a faction of the Chone Killers led by Gutemberg Andrés Rodríguez, alias “Bob Marley,” in El Arbolito and that all 120 taxis in the area likely do the same. Checkpoint extortion has also made it difficult for companies, primarily food distributors, to enter some of Durán’s neighborhoods, according to Luis Alberto Salvador, the vice president of Guayaquil’s Chamber of Industry.

Different gang leaders also charge extortion at different intervals, and the rent demand varies based on the size of the business. The demands can range from hundreds of dollars a month for small food carts or mom-and-pop shops, to thousands of dollars for mid-size businesses. 

These businesses often receive a demand for a large initial sum, after which they pay a smaller monthly quota, owners of such mid-size businesses and a local sociologist and political scientist told InSight Crime. Failure to pay risks an attack on the business, its staff, management, or the owner, the sources added.

There were 389 reported extortion cases between January and August 2024, according to police data, a more than four-fold increase over the 91 cases reported in all of 2023. The extortion is hitting businesses hard. More than 100 such small businesses have closed their doors in 2023 due, in large part, to extortion, according to reports received by a local business community leader with knowledge of a large cross-section of business activity in the city. However, official statistics are unavailable.

“Because of extortion, it’s just not profitable for them to work anymore,” the leader told InSight Crime.  

Businesses are not the only ones to get extorted. Schools, hospitals, and health clinics also face extortion, according to employees who have faced such threats and, in many cases, were too afraid for their safety to speak to InSight Crime in depth. 

“People don’t want to report,” a security official told InSight Crime. “They’re afraid, they think – I prefer to pay and be protected, not get robbed, walk around without worries.”

SEE ALSO: Why Have Ecuador’s Drug Trafficking Gangs Turned to Extortion?

Government officials also practice a form of extortion. The myriad licenses, permits, and registries required for any business to operate creates opportunities for corruption among municipal institutions, according to business community leaders, as well as former and current government officials. One business leader with direct knowledge of corruption cases told InSight Crime municipal officials routinely request bribes in order to establish businesses. The alternative could be myriad inspections, paperwork, and permits that grind business to a halt. 

“Durán’s municipal government is a cradle of extortionists,” the business community leader told InSight Crime.

Municipal institutions’ participation in extorting the business community has made them targets for gangs, who seek to establish their influence and add “bribes” to their portfolio of criminal cash flows. This is especially true for the transit authority and the firefighters, both of which have the power to issue tickets as well as grant permits.

Robbery and Kidnapping

Durán’s criminal gangs also profit from kidnapping and robbery, experts, former and current government officials, and community leaders told InSight Crime. The sectors of Durán under their control serve as safe houses to hold kidnapping victims or stolen goods.

Robbery has been on the rise since 2020 and the majority of robberies in Durán take place in the sectors of Panorama, Divino Niño, and the city center, according to the 2024 joint UNODC-municipal security plan. Almost half of those reported involve physical violence.

Meanwhile, the majority of kidnapping operations in Durán are what are known as “express kidnappings,” according to Durán’s business owners and community leaders. Gangs snatch and hold victims for a few hours, during which the kidnappers force the victim to extract money from their bank account via an ATM or transfer money via their telephone.

SEE ALSO: Ecuador’s Kidnapping Epidemic, Told by a Survivor

In the past year, however, gangs have increasingly started to prey on Durán’s business elite. Sociologists, security experts, government officials, and the business community leaders have all highlighted the skyrocketing number of cases in which owners and management of medium and large companies have been targeted for sophisticated kidnapping operations.

In these operations, the gangs identify and research a victim beforehand, then send armed men to ambush them. From there, the kidnappers take the victim to a safe house, holding them for days while they negotiate a ransom. These ransoms range anywhere from $1,000 to $100,000, according to Salvador, the Guayaquil Chamber of Industry representative who also owns a business in Durán, and another Durán business community leader, both of whom have heard first hand accounts.

Business community leaders note that the gang leaders who run these operations do not provide protection for kidnapping victims who have paid the ransom, leaving many business elites at risk for repeat attacks. Although InSight Crime could not document any repeat attacks, some business owners have permanently left Durán, while, as noted above, others have invested ever-greater sums in private security.

Money Laundering

Durán’s businesses offer opportunities for criminal groups to launder their criminal profits, according to the 2024 joint UNODC-municipal security plan, as well as small business owners, local and security experts, and former and current government officials in Durán.

Money laundering seems to happen two ways. The first involves buying out or lending to small businesses, local sources, including a small business owner and a government official, told InSight Crime. They added that sometimes there is a coercive element to this scheme, with business owners being pressured into the arrangement and being charged exorbitant fees on loans.

SEE ALSO: 3 Factors That Make Ecuador a Money Laundering Hub

The second, more sophisticated way, involves opening front companies that bid on public works contracts. This scheme requires connections to Durán’s municipal officials, multiple former government officials, and a public works contractor who used to bid on projects in Durán, told InSight Crime.

Criminal actors take “clean” money from the government contract and deposit it into their company accounts, according to analysts and organized crime experts. They then use “dirty” money to pay for labor and other expenses, which they can pay in cash and then easily falsify receipts and business records to match the books.

As a result of this money laundering method, some gangs – primarily the Chone Killers – are now competing with or taking over existing legitimate businesses. Current and former municipal officials told InSight Crime that the gang is using its increasing presence inside public institutions to push out or extort construction contractors, who often face a choice of leaving Durán or acting as third-party owners for the gangs in bidding for and managing public works contracts.

International Drug Trafficking

Over the past decade, as Ecuador gained importance as a drug trafficking transport hub, the various ports in and around Guayaquil have become particularly important dispatch points for cocaine exported to Europe. That is particularly true for Durán, which has become a critical gateway, storage point, and staging area for drug traffickers. The COVID-19 pandemic disrupted global cocaine routes and increased the importance of territories like Durán, where the drugs could be safely collected and stored.

Durán also connects Guayaquil to Ecuador’s largest highway system. Thus, much of the cocaine leaving from the Guayaquil’s ports must pass through the municipality. Some of it is stored there: Durán has numerous industrial warehouses, shrimp farms, factories, and private residences where drug shipments can be housed. Authorities have also made multi-ton seizures in Durán’s vast rural area. 

Because Durán stores and services cargo containers shipped through Guayaquil’s ports, contamination often happens on site — either as the cargo travels on the highways that cut Durán in half, which is known as the rip-on/rip-off method, or while it’s in storage, where it is contaminated. What cannot be loaded on-site can be moved from Durán’s ample river banks on boats to the nearby ports.

Corruption in the area is rampant. Durán’s own police and firefighters have been implicated in drug trafficking schemes. 

Durán’s criminal groups are attempting to become increasingly involved in transnational drug trafficking operations, but their role still appears to be small — either trafficking small amounts on their own or acting as service providers, who store, guard, and move the cocaine for bigger networks. Sophisticated drug trafficking networks also sometimes hire local gangs as security or for contract killings. Among these larger groups is the Lobos, one of the country’s most powerful criminal organizations.

Durán’s growing importance has also attracted the attention of transnational cocaine buyers – principally Albanian networks, who have sent their emissaries upstream to Guayaquil to broker deals and launder money, injecting a new level of criminal capital into the local market. Among their alleged partners in the area: Carlos Manuel Macías Saverio, alias “King Diablo,” the leader of the Latin Kings. However, while media accounts have connected the Latin Kings to the European networks, intelligence officials contacted by InSight Crime dismissed the notion, stating that he is primarily involved in microtrafficking.

Moreover, while Durán’s strategic location, industrial development, and absence of state control make it attractive for transnational drug trafficking, it is not the only territory with these characteristics. Transnational drug trafficking networks have also used Daule, Samborondón, and parts of Guayaquil for collection, storage, and dispatch. Therefore, while local groups can access significant economic capital through drug trafficking, their opportunities diminish when inter-gang violence draws unwanted attention and security operations.