Alto Paraná is home to some of Paraguay’s most dynamic criminal economies. Contraband goods continue to flood Brazil and Argentina via Ciudad del Este and surrounding river routes.
These routes are also used to smuggle drugs and weapons into neighboring countries, while Ciudad del Este’s commercial and financial markets offer a plethora of money laundering opportunities. In these conditions, Ciudad del Este is thought to have become a base for criminal groups ranging from local contraband rings to notorious gangs like the First Capital Command (Primeiro Comando da Capital PCC) and the Red Command (Comando Vermelho – CV).
First Capital Command (Primeiro Comando da Capital – PCC): The PCC is powerful in Ciudad del Este. The gang recruits many locals and is building up political support. The PCC has teams of lawyers to defend its members against criminal charges and to manage money laundering operations.
Red Command (Comando Vermelho – CV): The CV’s presence in Ciudad del Este – made up of Brazilians and Paraguayans – is weak compared to that of the PCC. Several groups like the CV are active in Ciudad del Este, a large city with a big Brazilian community, where they can easily hide from the authorities.
Barakat Clan: The Barakat family launders money in the tri-border area, including proceeds coming from Hezbollah, a criminal case in the US alleges. Its leader, Assad Ahmad Barakat, was captured in Brazil in 2018.
Small Drug Trafficking Gangs: Drug trafficking networks in Ciudad del Este are more low-key than in Pedro Juan Caballero, which may explain why the luxurious lifestyle of Reinaldo Javier Cabaña, alias “Cucho” – a prominent cocaine trafficker in the area – drew widespread attention before his capture. Another alleged trafficker, Tomás Rojas, alias “Chapalobo,” is still one of the most important drug traffickers in Ciudad del Este. Chapalobo is known for flaunting his money and power, and even built a replica of the Caacupé Cathedral in his house.
Zacarías Clan: The Zacarías family has traditionally held power over the department of Alto Paraná. Some clan members have been involved in corruption scandals or have been investigated for crimes of illicit enrichment, among others. The clan purportedly controls the Alto Paraná judiciary, especially in Ciudad del Este.
Rotela Clan: The Rotela Clan is one of the only Paraguayan criminal groups with the capacity to confront the PCC’s control of prisons, due to the money they make from micro-trafficking. Although the presence of the clan in Alto Paraná is seemingly limited to jails, they are a latent threat to the department.
Primer Grupo Catarinense (PGC): The PGC is a Brazilian gang that controls drug trafficking in the southern state of Santa Catarina in Brazil and its capital Florianópolis. After the PCC and the CV arrived in Paraguay, other Brazilian gangs have also tried to increase their influence in the country. In January 2019, the Paraguay National Police captured five members of the PGC in Alto Paraná, suggesting they are trying to expand into the territory.
Bala Na Cara (BNC): The Brazilian BNC gang has presence in some cities of Paraguay. Some sources claim that they are working in alliance with the PCC. In May 2018, Luis Fernando Da Silva Soares Junior, one of the alleged leaders of this criminal organization, was captured in Ciudad del Este.
Arms Trafficking: Arms trafficking in Alto Paraná, particularly in Ciudad del Este, bordering both Brazil and Argentina, is a vibrant trade. Brazilian gangs, such as the PCC, are the main consumers of these firearms – mostly long guns, such as M16s. In 2019, authorities seized a total of 102 firearms in Alto Paraná. The value of these seizures suggests the arms trade is in the low millions of dollars in the department. Most weapons come from Argentina, bound for Brazil, and transit through Ciudad del Este across the Paraná river. Arms trafficking in Alto Paraná has decreased in recent years, as traffickers now send firearms directly to Brazil, without stopping in Paraguay. What’s more, Brazilians (including PCC members) can purchase certain firearms legally in Ciudad del Este and smuggle them into Brazil.
Cocaine: Ciudad del Este is a transit point for Bolivian cocaine bound for Brazil and Europe. The PCC has a strong presence in the Alto Paraná, as well as other Brazilian gangs, family clans, and independent traffickers. In 2019, authorities reportedly seized just five kilograms of cocaine. This is thought to be a paltry amount compared to what is going through the department. The department houses clandestine airstrips, where cocaine or cocaine paste is flown in from Bolivia. Some laboratories have been found in the department, capable of producing around 400 kilograms a week (20.8 tons a year). Moreover, family clans who control micro-trafficking, selling crack, cocaine, and marijuana, can earn around hundreds of thousands of dollars a year. In sum, the drug transport business is very large, perhaps competing with even the most lucrative contraband trades, and the local drug peddling market is substantial.
Cannabis: Due to its strategic location, bordering Argentina and Brazil, Alto Paraná is a key location for all manner of smuggling, including marijuana. There are as many as 300 clandestine ports on the Paraná River, from where merchandise including drugs is shipped to Brazil – often using go-fast boats. The province of Misiones, in Argentina, bordering Alto Paraná, is also key entry point for Paraguayan cannabis, which can be moved in large several-ton loads. In 2019, Paraguay’s National Anti-Drug Secretariat (Secretaría Nacional Antidrogas – SENAD) seized over eight tons of cannabis. No crops were eradicated in 2019, though cannabis is grown in the department, as evidenced by the 20 hectares of marijuana crops eradicated in 2018. This amount could have yielded 15 tons of cannabis. The PCC has a strong presence in the area. The gang uses Ciudad del Este as a refuge. Other Brazilian gangs such as the Primer Grupo Catarinense (PGC) and Bala Na Cara, as well as independent traffickers, also have a presence in the department. Local drug peddling is controlled by family clans, who can earn hundreds of thousands of dollars a year selling cannabis, along with crack and cocaine.
Environmental Crime: Ciudad del Este has an illegal logging economy in San Rafael de Paraná. However, the revenues do not seem to be significant, and are far less than contraband and drug trafficking.
Human Trafficking: Ciudad del Este is a major urban hub rife with transborder crime, including human trafficking. Young girls are especially vulnerable to sexual exploitation in the department. Fake travel agencies recruit people who intend to go abroad, pay their travel costs, but end up handing them over to traffickers in Mexico, Argentina or Spain. Still, human trafficking cases are underreported with authorities chronicling just 17 cases in 2019.
Contraband: Ciudad del Este is the second most important city in the country, largely due to cross-border trade between Brazil and Argentina. Many of the products sold on the street are contraband or counterfeit. Both prominent criminal organizations and smaller outfits participate in this criminal economy, most commonly smuggling electronics and cigarettes. Most of the smuggling is done by land, but there are about 300 clandestine ports along the Paraná River also used for this illegal activity.
Money Laundering: Ciudad del Este is considered a major money laundering hub. Enormous commercial flows offer diverse opportunities to whitewash illicit proceeds, as does the contraband market and currency exchange operations in the tri-border area. Informal money transfer systems, money exchange businesses, combined with lax border controls and a large cash economy – Ciudad del Este ranked third worldwide in volume of cash transactions in the early 2000s – have created strong criminal opportunities for money laundering. Ciudad del Este may have developed a market for money laundering-structures that sell their services to various criminal actors and sophisticated schemes involving universities.
Sources: This profile is based on a field investigation in Alto Paraná and four trips to Asunción where InSight Crime spoke to Interior Ministry officials, the Attorney General’s Office, the National Anti-Corruption Secretariat (Secretaría Nacional Anticorrupción – SENAC), the National Anti-Drug Secretariat (SENAD), the Secretariat for the Prevention of Money or Assest Laundering (Secretaría de Prevención de Lavado de Dinero o Bienes – SEPRELAD), Paraguay’s anti-human trafficking unit, prison officials, the National Directorate of Civil Aviation (Dirección Nacional de Aeronautica Civil – DINAC), police intelligence officials, an anti-narcotics prosecutor, custom officials, the governor’s office, an international organization working on the prevention of torture, Brazilian police, non-governmental organizations working on human rights, and local journalists, most of whom requested anonymity. InSight Crime also drew from information provided by the Interior Ministry, the General Directory of Statistics, Surveys and Censuses, and local press.