Breaking Down LatAm’s Lucrative Trade in Stolen Cell Phones

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The Latin American trade in purloined cell phones has evolved from common street crime into a lucrative, well-organized business with transnational reach, and, given weak legislation, corruption and a lack of coordination among security forces, its rise looks set to continue.

The theft of cell phones is one of the most common crimes across the region. Although the true scale of the practice is unknown due to underreporting, the statistics that are available offer a glimpse of just how common it is; 1.2 million cell phones were stolen in Peru in the first three months of 2014, while some 1.7 million cell phone robberies took place in Colombia in 2012, according to official data. In Ecuador, cell phone theft accounted for 40 percent of personal robberies between January and August 2013. In Ecuador, Colombia, Peru and Bolivia there are currently 14 million cell phones registered as stolen.

Street cell phone theft causes a sense of fear and lack of security. According to Interpol and the Colombian police, this crime “generates the highest perceptions of insecurity in the [country’s] principal cities,” because “it is accompanied by other types of activities such as personal injuries and homicides, generating fear among the citizens.”

Despite its prevalence, cell phone theft is widely seen as the business of low level, local street thieves. But large scale means large profits, and large profits attract a different class of criminal. Currently, criminal structures dedicated to cell phone theft that operate across borders in Latin America make a daily average of around $550,000, according to an Interpol report accessed by El Comercio.

Transnational Networks, International Sales

One of the countries where these networks have most clearly emerged is Colombia, where 32 groups dedicated to cell phone theft and trafficking have been indentified in capital Bogota alone. Colombian police figures indicate that a single organization with an international reach can smuggle up to 500 telephones out of the country per month.

Cell phones stolen in Colombia are often trafficked to countries where they fetch a higher price, such as Ecuador, Venezuela, Brazil and Argentina, although in some cases they are shipped as far away as Asia and Europe. The phones can also be sold for parts, which was the method of one 13-person network disbanded in the country in 2013, that moved cell phone parts to Argentina, Peru and Ecuador.

According to Interpol, the structures dedicated to cell phone trafficking can be divided into five components: the thief, the technician, the smuggler, the seller and the client.

The thieves at the bottom of the chain act as suppliers for the rings, who pay them according the phone’s model and condition. The technician then modifies the IMEI identification code, and launders the cell phone using specialized software. When the phones are ready for use they are passed to the smuggler, who often counts on the support of corrupt officials and employees of the transport and telecommunications sectors to illegally move the phones between countries.

Finally, there is the seller and the client. Prices vary by country, and one phone can be worth up to $2,000 in places like Brazil, where tariffs on imported electronics can be sky-high. 

The structure described by Interpol is illustrated by a transnational operation dismantled in Colombia in 2011. Under the leadership of Luis Eduardo Bernal Castillo, alias “Lucho,” who authorities considered to be the brains behind the internationalization of the network, the operation moved nearly 14,000 phones via two different routes: by air to Argentina and Brazil, and by land to Ecuador and Peru.

SEE ALSO: Colombia News and Profiles

A Bogota cell phone shop owned by a convicted drug trafficker acted as a clearing house for the stolen phones. The network also included Peruvian nationals, who were in charge of moving the cell phone shipments via the international transport companies they worked for, while a Spanish national based in Argentina was responsible for unblocking the IMEIs of the stolen phones.

A Lucrative, Low-Risk Business

For Latin American criminal groups seeking out new sources of income, the illegal cell phone trade is a relatively low-risk business that offers big profits.

“Drug trafficking is more dangerous, since every country is combating drugs. In contrast, not every country is working to resolve the problem of stolen cell phones. There are no controls. The risk is minimal,” Jeanet Pelaez of the Colombian Prosecutor General’s Office told the Huffington Post.

Penalties for the crime vary among countries, creating legal gray areas that criminal groups can take advantage of. While in Ecuador sentences for cell phone theft can be as high as 30 years, depending on how serious the case is and the harm caused to the victim, in Colombia an estimated 90 percent of suspected cell phone thieves captured are freed nearly immediately. This is partly because simple theft does not automatically entail prison time. In 2013, the national police captured 12,740 people linked to cell phone theft, of whom just 1,275 remain in detention.

In order to confront this transnational crime, in April 2013 the governments of Colombia, Bolivia, Ecuador and Peru signed Decision 786, which proposes a “normative framework to regulate the exchange of information regarding missing, stolen or violently seized mobile phone equipment.” In March 2014, a cell phone blacklist was compiled to cover the four countries.

SEE ALSO: Peru News and Profiles

Despite the implementation of this strategy and the fact that countries like Ecuador have toughened their policies on cell phone theft, lack of international coordination continues to be a problem, and the crime is facilitated by corruption.

In various countries in the region, there have been cases of customs officials cooperating with transnational trafficking networks, communication company employees who alter the registration numbers of stolen cell phones, and transport sector employees who help move the phones between countries.

Another problem that these countries have yet to deal with is the marked differences in cell phone prices. The differentiation creates high profit margins, which could help explain the fact that cell phones have become objects worth killing for — cell phone thieves have killed at least 20 people in Colombia in the last two years, according to police.

Meanwhile, many citizens, knowing they can get a lower price on the black market, ignore the possible origins of the phone they are buying.

Until both legislation and implementation are improved, Latin American criminal groups will continue to take advantage of the holes generated by corruption, impunity, and a lack of coordination to stay one step ahead of the authorities.

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