A criminal group in Argentina has found a novel target for extortion: black market currency dealers who are moving large amounts of cash to dollar-hungry Argentines in an economy hit hard by the pandemic.
Known as “cuevas,” or caves, illegal exchange houses have become targets of Los Monos, a powerful crime group in the city of Rosario. The currency traders operate in a shadowy parallel exchange market of pesos, dollars and euros, known popularly as the “blue dollar.” Los Monos takes advantage of this market, using its network of corrupt police contacts to identify sellers and extort them repeatedly, La Nación reported.
“They are assured that the victim is not going to be able to make a judicial complaint,” an investigator told the newspaper, because “what is possessed can’t be justified.”
In one example, a currency dealer paid $25,000 a week to a young gang member who reportedly did nothing more than invoke the name of Los Monos' imprisoned leader, Ariel Cantero, alias “Guille,” according to La Nación.
The Los Monos crime group got its start more than two decades ago, trafficking drugs from Paraguay through the strategically located city of Rosario, where it gained a stronghold controlling local drug sales.
Though Los Monos' best-known leaders are currently in jail or dead, the group remains formidable. It has stayed active in drug trafficking and has expanded its extortion rackets, targeting taxi drivers, unions and now blue dollar salesmen.
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Though not particularly policed, the blue dollar exchange is still illegal. This makes traders easy targets for Los Monos, for whom extortion offers a low-risk alternative to drug trafficking amid coronavirus restrictions.
What's more, as the gap between the official and blue dollar exchange rate increases, business is booming for these illegal currency traders, making them all the more attractive.
In 2019, former Argentina president Mauricio Macri introduced strict currency controls that stabilized the peso and kept Argentina from entering hyperinflation. These controls also made the US dollar artificially expensive, fueling the country's currency black market.
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As the COVID-19 pandemic has caused sweeping economic damage, the blue dollar rate has skyrocketed. In May, the black market rate reached 138 Argentine pesos per dollar, and it's currently twice as high as the official rate of about 70 pesos per dollar.
“With the current depth of the recession, Argentines who want to save will take refuge in safer assets, including the informal dollar,” Natalia Motyl, an economic analyst at the policy research group Libertad y Progreso in Buenos Aires, told Reuters.
Reportedly, even Los Monos themselves are not accepting extortion payments in pesos. According to La Nación, they have demanded payment in the form of property, luxury cars or US dollars.
Black market currency exchanges are invariably ripe for organized crime in the region. In Venezuela, longtime strict currency controls created a vast black market economy and a wealth of opportunities for crime groups. Colombian drug trafficking groups laundered up to $100 million by financing Venezuelan companies in desperate need of dollars. The country’s elite and public officials also exploited the country’s exchange system to embezzle hundreds of millions of dollars.