From Extortion to Investment: The Making of Barrio 18, Inc.

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The structure and operations of El Salvador’s Barrio 18 street gang increasingly resemble that of a corporation. Government investigations reveal the gang is keeping careful accounting records of money earned from extortion and making strategic investments in local businesses.

What happens with all the money the Barrio 18’s Sureños faction makes from extortion? El Faro had access to documents from two official investigations and audio from phone taps that paint a picture of the gang as a company with employees, investments, payments, accountants and auditors who, from within the prisons, keep in line anyone trying to become “alive” in the thriving extortion business. The gang invests money in cell phones, shoes, vehicles, cocaine shipments, small businesses, and, when they sense conflict, weapons. They also pay lawyer fees, support mothers and spouses, and even sell Huggies disposable diapers.

This is the first part of an article which originally appeared in El Faro and was translated, edited for clarity, and reprinted with permission. See Spanish original here.

The Barrio 18 has decided there will be no discount. The gang will not negotiate the price of the extortion fee, and will not yield to the pleas of a woman that sells chicken and claims she cannot pay the $400 “rent.” They know she is lying because they have “posted” her business, observing a good number of clients coming and going on a daily basis, and noticing the woman has enough money to hire private security. The gang has learned accounting, and therefore considers the woman’s offer — “two pounds of the small ones ($200)” — a joke. No, there will be no discount. Instead, they have decided they will collect the money either with more threats, or lead bullets.

“Look, look! The situation is… Bitch! Now you’ve crossed the line, they’re gonna kill this old bitch… Hit her! In the legs!”

“Ah?”

“Little Boy’s orders…”

“Ah?”

“Uh-huh! In the legs!”

“Ah, well then… Wherever you say is best.”

“And you have to take all the kicks that come.”

“That’s nothing! Haha.”

“Haha, yeah alright.”

The previous exchange is part of a phone conversation intercepted by the Telephone Intervention Center at the Attorney General’s Office on March 24, 2014. The person who made the call is the talkative Juan Carlos Martinez Amaya, alias “the Smurf,” a Barrio 18 member from the Sureños faction. At the time of the call, he was in Izalco prison, but he has since been transferred to “Zacatraz,” a maximum-security prison. Receiving the call was a gang member from the Hoover, which is a “cancha” (territorial division) that extorts businesses in and around the Colon market in the city of Santa Ana. Among these businesses is a butcher who asked for the discount; a plea only one of El Salvador’s most famous gangsters could approve.

***

In the Cojutepeque prison, a man serving a 45-year sentence for murder and illegal arms possession looks like an accountant displeased with the accounts. The list of extorted businesses and the prices charged by the gang do not match reported incomes. This prompts troubling doubts: What business is not paying? Or, if they are all paying, which of his accomplices is not reporting the money? This man’s name is Carlos Ernesto Mojica Lechuga, known as Viejo Lin, and he is considered by police to be one of the national leaders of the Barrio 18’s Sureños faction. Viejo Lin grabs the phone and starts asking questions.

“What happened?” Viejo Lin asks. 

“What’s up? They’re arriving now, they didn’t give it to him because two cops were in the street, but they’re going to hand it over now.”

SEE ALSO: Barrio 18 News and Profiles

The man answering Viejo Lin’s call is incarcerated in the Izalco prison, and is known as the Smurf. He is a leader of the Hoover, the “cancha” that extorts various businesses in Santa Ana. With the phone call, Viejo Lin intends to demonstrate that he knows what is happening in the streets; that he knows the extortion business by heart, and that someone is not reporting money. Something doesn’t add up. The Smurf realizes the seriousness of the suspicions and begins to explain:

“Shit! Look, no, don’t think we’re not being honest, especially if we’re sending every day. We’re in hot water too, but sometimes this shit gets accelerated.”

“You guys are yanking me from one side to the other. You guys tell me: yesterday they picked up this, the next day this and all that. Yeah? You get me? Do you copy?”

“Yes, I understand.”

“Well, don’t believe that I … ignore things. You get me? Yeah? Because in reality I don’t know who they are and I’m not going to track down some shitheads. Alright?”

“Uh-huh?”

“You get me? And you know I keep track. With me this is nothing new, everything has already been invented. You understand?”

“Look, you three are picarazos.”

“Dude.”

“I need to give you what I told you about the other day… Yeah?”

“We haven’t dropped this. It’s safe there. It’s the only place with reliable people. That chicken lady has a broomstick up her ass. That’s why I trust the old bitch. We won’t take anything anymore unless the Ston finds out there is something to take.”

“Not like the other place. You know that’s not the only place the sun shines.”

“Hahaha.”

“Well, listen, it’s time to go, the question is whether or not you have everything taken care of by tomorrow.”

On March 24, 2014, the Barrio 18 refused to reduce the rent of the woman who sells chicken in Santa Ana. She has to pay $400, not the $200 she offered. What she does not know is that, in the event she doesn’t pay, an order has been given: “Put a hit on her!”

***

He’s fat, dark-skinned, and has black hair. He is wearing jeans and a purple shirt with white stripes. He’s wandering around a bus terminal, waiting for someone to give him a white envelope with $1,400 inside. Once he receives the envelope, the man boards a bus for the Santa Ana terminal. He sits close to the driver, guarding the money in one of his pant pockets. When he arrives at his destination, he goes to a shop where phone cards are sold. Fifteen days later, he repeats the routine.

SEE ALSO: Coverage of Extortion

The anti-extortion police are aware this man is responsible for collecting the extortion rent paid by businesses in Santa Ana. The investigators started to follow him in April 2013, after a victim reported that gangsters had demanded he pay $1,400 every other week. If he didn’t, the gang members threatened to kill his employees. The businessman had been paying extortion money for over 13 years, and finally decided to report the abuse in April 2013 after the extortionists increased his fee by $500.

The fat money collector does not know about this business owner’s complaint. Nor is he aware that three police teams have been following him. Or that they took a photo when he dropped the money off at the store that sells prepaid phone cards. They also photographed him after he received extortion money from a store. Sometimes, the man would go to a cake shop. And he regularly visited a restaurant run by a woman in a beige blouse, blue skirt, and red apron. It was here that he turned in the extortion rent.


 What she does not know is that, in the event she doesn’t pay, an order has been given: “Put a hit on her!”


In order to identify who own the businesses frequented by the money collector, investigators pretended to make routine patrols. They spent days and months doing this, filling dozens of pages of paper with names — none of which provided any leads. One day, however, the police came across a name that led them to the jails: Silvia Maribel Martinez Ayala. Silvia is the wife of the Smurf, a gang “palabrero” (spokesman or leader) who is currently imprisoned in Izalco. Silvia also owns a restaurant in the Santa Ana bus terminal that makes fast food, which the fat extortion collector frequented. With this evidence, prosecutors ordered her phones to be tapped, and her involvement in the extortion operations became immediately apparent:

“There are police in the terminal. This phone is in my name so I’m not going to say much. Have you asked for it from the little shop?”

“Yes, Maria is going to get it,” responded the Smurf.

Maria is not a gangster, but rather a Barrio 18 “collaborator.” A collaborator serves two purposes. First, if they have another job, they have access to the names and phone numbers of their bosses, as well as information on employees and company vehicles. In exchange for this information they receive a cut of the extortion rent. Second, collaborators can help reroute illicit money flows. For instance, the routing of extortion money can go as such: the gang selects an employee of the victim to receive the money, and this employee then gives the money to a gang collaborator. A collaborator can then give the money to the gang in one of two ways: by personally handing in the cash or transferring it via cell phone using the Tigo Money money-transferring system. These were the Smurf’s orders to Ernesto, also a gang collaborator:

“One part of the remittance [goes] to the (Tigo Money) account, and give the other [portion] to Carlitos.”

Carlitos is the son of the Smurf. So, what does Ernesto gain by sending money to the gang? The answer is simple: money. When a victim hands over extortion money the gang will determine the “cost of business,” and will typically include a “salary” of $50 for collaborators. Another $10 to $20 is put towards the “money transfer,” or the cost of a taxi to go collect and transport the money from one place to another.

Some gang collaborators are crucial for keeping the money flowing. Their importance is such that, instead of their salary being taken from the rent they collect, they are given the money paid by a specific business. El Faro had access to more than 5,000 pages of information from judicial investigations — one conducted in Santa Ana and the other in San Miguel — which details the path extortion money takes.


El Chory was determined to convince his gang to invest a large portion of the extortion money in weapons, because he felt the end of the country’s 2012 gang truce was near.


In Santa Ana, the Attorney General’s cases against the Hoovers can be summarized as such: 13 people were directly responsible for collecting rent from the victims. They then gave this money to five of the gangs’ family members (wives, mothers, and sons), who were in charge of receiving part of this money in cash for the purposes of buying phone cards and moving the money via Tigo Money. A portion of this money would remain in the bank accounts of the family members, and the other part went into the gang’s coffers.

Furthermore, in the case of the Hoovers, intercepted phone calls suggest the Barrio 18 had a list outlining the distribution of extortion payments, as follows:

The milk business pays $50 per month.

The “RB” company pays $1,040 every two weeks.

The “EC” store pays $500, which is for the Smurf, Viejo Lin, Belcebu, and Little Boy (no pay schedule specified).

The “R” business pays $20 (no pay schedule specified).

The rent from a mini-agency is for Danky’s woman (no amount specified).

The “EN” business pays $60, which is given to Sandra.

The “R” business pays $50, which goes to Ernesto, the gang collaborator.

The rent from workshop “ES” is for the Little One, Snayder, and Helen (no amount specified).

The “DP” business pays rent to the Smurf (no amount specified).

A bakery pays $1,500 monthly.

As Violence Rises, Gangs Increase Extortion Demands

At 4:10 in the afternoon on Saturday, February 8, 2014, Herbert and El Polo are on their way to negotiate for a submachine gun in the illicit arms market in La Union. They are not the buyers, bur rather the intermediaries of someone who wants an Uzi but is unable to verify the quality or negotiate the price because they are in jail serving a 30-year sentence for homicide.

“Is this shit good?” they ask Herbert.

Asking the question is Jose Timoteo Mendoza Flores, alias “El Chory,” spokesman for 32 canchas of the Barrio 18’s Sureños faction. These canchas are scattered throughout eastern El Salvador, mostly in La Union. When he made this phone call in February 2014, El Chory had a large say in what the money earned from extortion was used to buy, as well as who lived or died. In short, he had the final word. El Chory was determined to convince his gang to invest a large portion of the extortion money in weapons because he felt the end of the country’s 2012 gang truce was near. That Saturday was relatively calm, however, with police only reporting seven homicides, a low figure compared to most days. El Chory took the phone and asked:

“And that son-of-a-bitch went on ahead?”

“Yeah, I stopped to pee. In El Carmen I called him and he didn’t answer,” answers Herbert, his interlocutor.

“The dumbass has to go through Carmen and it’s probably best if I shoot him there. How is that gun looking?”

“It’s beautiful, hardly looks used. It has a large clip too, with 45 rounds, and you can shoot all of them in a single burst.”

“They’re expensive because the truce is about to end. Man, this gun is about to spray lead all over the place. Who is going with you?”

“El Polo. He’s from Conchagua and slings dust.”

“Who is buying it for you?”

“I think Santa Rosa is going to bring it.”

They continue talking for a little bit longer about the restaurant, but we’ll come back to that later. For now we’ll say two gang representatives were trying to buy an Uzi. The buyers did not specify a price, but they know that in the current market there will be no price breaks. The gangs and weapons smugglers sense the end of the truce is near, causing the price of guns to spike.

Some palabreros have decided to increase the extortion quota in order to buy weapons, provoking some victims to ask the Barrio 18 leadership to maintain the current quota. El Chory grabs the phone and begins to investigate what is happening. He talks with Jose Luis Guzman, alias “El Chiky,” a gangster imprisoned in Izalco.

“Why are you asking for more money from people?” he asks.

At first, El Chiky denies they have increased the rent quota. The denial does not satisfy El Chory, who demands an explanation. Cornered by the questions — and remembering he is speaking with the Barrio 18’s top leader — El Chiky conceded the extortion quota had gone up because they wanted to buy two grenades.

El Chory objected to the purchase of grenades, saying this money was needed to buy an Uzi. At the moment, the gang needs to invest in priorities, and in the long run an Uzi is a more worthwhile investment than two grenades. The gang only has enough money to buy a submachine gun, however, because “they have borrowed the money” set aside to pay a lawyer in El Tamal.

***

On April 10, 2014, barely two days after the debate over whether to buy an Uzi or the grenades, a gangster calls El Chory and tells him the “other hammer” they want to buy is ready.

“It’s ready, but you have to take it downtown, to the terminal.”

That day, the Barrio 18 had collected $475 in extortion money. But this money was not enough to buy a gun (the price was not specified in their conversation).

The gangster — identified as El Chainy — also says certain deductions had to be made from the collected money in order to cover operating expenses.

“There’s $475. Out of this, $20 was given to the guy who collected it, and $5 for the taxi.”

El Chory tells him to wait and hold onto this money for a few more hours until they receive enough money to buy the gun.

“Keep it there. We’re short around $1,000.”

Until this money arrives, El Chory takes the time to make certain “the dogs” have not lost the weapons entrusted to them. The palabrero asks El Chainy to send him a photo of his 9mm pistol. He also wants a picture of the 357 Smith and Wesson revolver Meme has. “Also, who has the 3.8?” asks El Chory.

*This is the first part of an article which originally appeared in El Faro and was translated, edited for clarity, and reprinted with permission. See Spanish original here.

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