The growing role of technology in Brazilian organized crime

A multidisciplinary unit of federal and state authorities in Brazil has dismantled communications towers and illegal mobile phone shops as organised crime embraces technology for its criminal activities.

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

Authorities wanted to dismantle the group’s criminal logistics, which increasingly uses technology to coordinate drug trafficking, commit fraud and evade arrest. Targets included illegal cell phone shops run by the PCC and communications towers that powered surveillance systems the gang used to intercept communications from the São Paulo Military Police (Polícia Militar do Estado de São Paulo). Authorities believe the PCC used the intercepted communications to anticipate raids and avoid arrest.

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As Brazilian society moves more and more online, organized crime seems to be following suit. The Brazilian 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 online and telephone scams. But it’s not just the powerful PCC that is turning its attention to cybercrime.

With the rise of online banking in Brazil, stealing money can now be done remotely more easily, as criminals convince victims to transfer cash or sensitive information over the phone or email. This has led to virtual crimes becoming increasingly common in Brazil, even as other types of crime decline.

Danger grows in the virtual world even as violent crime declines

Most property crimes, such as theft, and violent crimes, such as homicide, have decreased in Brazil, but virtual scams continue to grow unabated, targeting an increasingly digitalized society.

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

And while fraud is growing overall in Brazil, online fraud, including scams like phishing emails that trick people into installing malware to steal their identities, is growing fastest, rising 13.6% between 2022 and 2023. Meanwhile, nearly all types of property crime cited in the report fell during that period.

A digitalization pandemic

This trend was likely exacerbated by the COVID-19 pandemic. With people forced to stay indoors and many sectors – such as banking – moving online, criminals followed their targets.

“The pandemic has accelerated the process of digitalization, the process of digital inclusion, and this has meant that the state and institutions cannot keep up with crime. Crime does not need to adopt laws; crime does not need to create processes, procedures or regulations – crime just does what it thinks it has to do,” said Fábio Diniz, founder and president of Brazil’s 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 have bank accounts and make digital payments in Brazil 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 person monitoring and attacking the victim, while the other monitored the accounts and ensured the transfers went through.

But while Brazil’s massive investment in street policing is reducing property crimes such as robberies, criminal organizations may see virtual fraud as a convenient, low-cost addition to their operations.

To pull off a robbery, a group might need weapons and a getaway car. Once the police are called, officers can begin analyzing CCTV footage, attempting to identify the perpetrators and tracking vehicles. In Brazil, violent crimes tend to be punished more severely, all of which increases the cost of a robbery, Diniz explained.

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In contrast, virtual scams rely primarily on an internet connection. A phone call or email can be enough to convince someone to transfer money, and even if the success rate is low, thousands of people can quickly be targeted. Anyone on the internet is a potential target, and crimes can be carried out far from their victims. Virtual crimes are difficult to trace back to their perpetrators, and as a non-violent crime, the penalties in Brazil are lower.

A police operation in July led to the arrest of 34 suspected members of a cybercrime gang in São Paulo. The criminal group committed a series of online crimes, including fake vehicle auctions, online shopping scams and theft of social media and WhatsApp accounts. Most of the victims were located 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 a gateway into the virtual criminal world. And while street crime is generally declining, the demand for phones has led to an increase in non-violent cell phone thefts. Nationally, the number of stolen cell phones is increasing year-over-year, by more than 42.5% from 2020 to 2023.

The next generation of criminals is emerging via the internet

As organized crime increasingly finds opportunities online, technology-savvy teens are turning to the digital underworld.

Brazilian police discovered the activities of a 14-year-old cybercriminal in September 2023. The teenager is accused of leading a gang that hacked into official government security systems and sold their logins and passwords online. The group used this access to falsify official information and documents from the police, military and justice system.

In addition to forming their own groups, large criminal organizations may be turning to adolescents to enhance their cybercrime operations, said Samira Bueno, director of the Brazilian Forum for Public Security. “We have noticed that adolescents are working on these (virtual) scams because they are more digitally literate than the leaders of the crime,” she said in an interview with InSight Crime.

As cybercrime increases, other crimes for this age group appear to be declining. The number of Brazilian adolescents in juvenile detention fell to about 12,000 in 2023, a 56% drop from a peak of nearly 27,000 in 2016.

This is partly due to Brazil’s investment in street policing, which appears to have led to a decline in violent robberies by teens. However, the decline does not necessarily mean that young people are committing fewer crimes. Instead, it suggests that at least some teens are moving from the streets to online criminal activities, where they are less likely to be caught, Bueno explained.

Prison bars can’t stop the internet

Brazil’s prisons, long hotbeds of organized crime, are now flooded with cell phones, which criminals use to carry out a variety of crimes while incarcerated.

Technology has made it easier to communicate from anywhere in the world, and increasingly small phones are harder to detect. Some prisons in Brazil have been known to reportedly have more cell phones than prisoners, as inmates continue their cybercrime operations behind bars, Bueno explained.

The availability of smartphones means that convicts can pull off virtual scams and extort people from prison. In one common type of extortion, criminals find a victim’s personal information and contact one of the victim’s family members 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, receiving threats from criminals. Authorities struggled to track down the perpetrators, who were largely able to cover their digital footprints. But when authorities finally tracked down the leader of this extortion ring, he was already in prison in Rio de Janeiro.

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Smaller groups sometimes use the power and fear of Brazil’s largest criminal organizations to carry out their scams. For example, in 2022, prisoners called vendors in the São Paulo metropolitan area claiming to be members of the PCC. They demanded payments through Pix to free a PCC leader from prison. The criminals threatened those who refused to pay, and some victims wired the money, believing the callers were real PCC members who would harm them and their businesses if they didn’t pay.

Authorities in Brazil have discussed the possibility of installing signal blockers in prisons to curb inmates’ use of smartphones. While police officers generally support the technology, prosecutors targeting criminal networks warn it could hamper their investigations, which rely on wiretapping and prison surveillance.

Prosecutors receive a lot of important information through these mechanisms from criminal groups that would not work with the blockers. “It turns out that no prison has blockers, except the highest security federal prisons,” Bueno said.