Attempts by the Knights Templar to extort a company building a federal prison in Mexico’s Michoacan state have resulted in workers abandoning the site over threats, highlighting the extent of the group’s power and its use of extortion for both control and profit.

The contract for the prison, located in Buenavista Tomatlan in the violence ridden region known as “Tierra Caliente,” was awarded to national company Prodemex under the previous administration.

Locals have reported that the Knights Templar demanded about $1.5 million in exchange for allowing the company to work in the area. When the company refused to pay, the group began to terrorize employees, causing the project to be put on hold as numerous workers quit.

Milenio interviewed one engineer formerly involved in the project, who said the group threatened to find their families, left threatening messages in their hotels and followed them. A local vigilante leader said the Knights Templar had killed two workers.

The new government says construction is continuing as planned and that they have had no new complaints since increasing security for the project. Milenio, however, claims the construction site is nearly completely abandoned.

InSight Crime Analysis

When the Knights Templar first appeared in Michoacan state in 2011, they claimed they would protect the population from extortion, kidnapping, robbery and rival groups. Since then, the Knights have taken control of much of the western Tierra Caliente valley, although their dominance is currently being challenged by local self-defense groups.

This is not the first time the Knights Templar have been accused of extorting a major company — in 2012, the group was allegedly responsible for several attacks against a PepsiCo subsidiary in Guanajuato and Michoacan, which officials claimed was motivated by extortion — although the company denied this. Along with the Zetas and the Gulf Cartel, the group is also thought to be one of the principal groups extorting mining operations in Mexico. Extortion by criminal groups has forced a number of foreign companies to leave the country.

As the traditional cartels have fragmented, diverse Mexican criminal groups fighting for resources have increasingly expanded into activities other than drug trafficking. This pattern has also been seen in Colombia, where extortion for profit has become a major criminal enterprise