Major Phone Network Used in Extortion in El Salvador: Report

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El Salvador gangs are using a poorly regulated money transfer system provided by one of the region’s major cellular phone networks to facilitate extortion, illustrating the continued bilking of the underclass amidst a gang truce that was supposed to lead to less crime.

According to an El Faro investigation, gangs exploit the remittance service offered by the cell phone giant Tigo, known as “Tigo Money,” to extort small businesses. Up to $750 can be transferred per month via the service, and only requires the sender and receiver to have a Tigo cell phone and a national identity card.  

Currently, 24 people connected with the Mara Salvatrucha 13 street gang (MS13) are being held for crimes related to the exploitation of the service, but El Faro said the scheme is far more widespread, and is being investigated by the country’s financial watchdog, the central bank and the company itself.

InSight Crime Analysis

The report comes as the government continues to oversee a truce between the country’s two largest gangs, the MS13 and the Barrio 18, which began in March 2012. The truce has succeeded in lowering homicide rates but other crimes, such as extortion have risen, according to police.

SEE MORE: Coverage of El Salvador’s Gang Truce

As is commonly seen throughout the region, the Tigo Money extortion cases reported by El Faro also appear to be run by imprisoned gang members, with the prisoners’ family members collecting the payments, including the wife of MS13 leader Borromeo Henriquez, alias “El Diablito de Hollywood,” who was arrested in May and is one of the gang negotiators.

Salvadoran Security Minister Ricardo Perdomo himself highlighted the problem during an interview with El Faro in July, yet the Tigo Money service continues to lack government controls to guarantee money transfers are not tied to illicit activities.

Extortion is the major source of income for gangs in El Salvador and its Northern Triangle neighbors, Honduras and Guatemala. More than 70 percent of small businesses in El Salvador are victims of extortion, earning gangs a total of up to $1.5 million per month, according to El Diario de Hoy. 

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