Colombian rebels are believed to be behind the massacre of seven people who pretended to be the FARC in order to extort money, as the guerrillas step up their extortion demands across the country.

Seven people, six from a single family, were murdered by rebels from the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC) in their stronghold of San Vicente del Caguan, in Caqueta province. Most of the victims, among them two women, were from the Espitia family, which has been under investigation for extortion, and police are working on the theory that those killed had been engaging in extortion, using the FARC name, and the fear it inspires, to ensure swift payment.

San Vicente del Caguan was the capital of the 42,000 square km (16,000 square mile) safe haven that former President Andres Pastrana granted the FARC during the failed peace process from 1999-2002. During the peace process it was the site for talks, and the rebels put down deep roots in the local communities.

The police are blaming the killings on the FARC’s elite Teofilo Forero Mobile Column, a sort of Special Forces group within the rebels. Up to 15 armed fighters arrived, dressed in black uniforms, at the Espitia house and killed all those within.

The Teofilo Forero engages in extortion not only in Caqueta but the neighboring department of Huila. Neiva, Huila’s capital, suffers from systematic FARC extortion, with the rebels punishing those that do not pay by blowing up property, an almost weekly occurrence in the city.

Most of the massacres in Colombia (there were 184 last year, according to official statistics) are carried out by new generation narco-paramilitary groups (called BACRIM or “bandas criminales” by the government), but it seems that the FARC wanted to make an example of this family and send the message that they will not tolerate anyone using their name.

The massacre coincides with an increase in extortion nationwide, particularly by the FARC and their smaller cousins, the National Liberation Army (Ejercito de Liberacion Nacional – ELN). This is the fastest growing income stream for the rebels, now second only to drug trafficking and ahead of illegal gold mining, from which both rebel groups profit.

As kidnapping, once a major source of FARC revenue, has fallen (from 2,882 cases in 2002, to 282 in 2010), the FARC have had to find alternative sources of income and have increased their extortion efforts acoss the country. In the last few months at least 20 such demands have been sent to mining and oil company headquarters in Bogota, as the FARC seeks to get a cut of the boom that these sectors are experiencing.

Kidnapping and extortion used to be linked for the FARC. If extortion demands were not met then the rebels would kidnap family or company members. However, relentless U.S.-backed military offensives since 2002 have forced the rebels to break down into smaller groups and become totally mobile, seldom spending more than one night in the same place. This has made it much more difficult to cart around kidnap victims, and so the FARC now punish failure to pay extortion demands by damaging property instead. The use of improvised explosive devices and grenades to target shops, hotels and businesses has become commonplace throughout the country.

Senior police figures privately admitted to InSight Crime that they know extortion has increased exponentially over the last couple of years, but that, due to unwillingness to report cases, they are not sure what the scale of the problem is or how much the FARC are earning from it. However, revenues are estimated to be in the tens of millions of dollars.

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Jeremy McDermott is co-founder and co-director of InSight Crime. McDermott has more than two decades of experience reporting from around Latin America. He is a former British Army officer, who saw active...