Reporting on the Mexican Cartel Drug War

In Mexico, Extortion is a Booming Offshoot of Drug War

Monday, March 19, 2012 |

Almost every segment of the economy and society, including businesses, teachers and priests, has been subjected to extortionists who exploit fear of cartels.

By Tracy Wilkinson
Los Angeles Times

Genaro Garcia Luna, Mexico's public safety secretary and head of the federal police, said his officers have investigated 283,000 extortion complaints since December 2006. But experts say probably two-thirds of extortion cases aren’t reported to authorities.

No taco stand was too small for Juan Arturo Vargas, alias "The Rat."

Every week, Vargas would shake down the businesses in Nicolas Romero, a working-class town an hour outside the Mexican capital. His take: anywhere from $25 to several hundred dollars. His leverage: Pay up, or your kids will get hurt.

The Rat, police and prosecutors say, worked at the low end of a vast spectrum of the fastest-growing nonlethal criminal enterprise in Mexico: extortion.

From mom-and-pop businesses to mid-size construction projects to some of Mexico's wealthiest citizens, almost every segment of the economy and society has been subjected to extortion schemes, authorities and records indicate. Even priests aren't safe.

Extortionists have shut entire school systems, crippled real estate developments, driven legions of entrepreneurs into hiding or out of the country.

And although it is not considered a violent crime, violence readily engulfs victims: When a casino in the industrial city of Monterrey failed to pay off extortionists last year, the place was firebombed, killing 52 people, primarily middle-aged women playing bingo.

Extortion has grown as the largest drug-trafficking cartels consolidate power, leaving many of the smaller groups searching for new sources of revenue.

And it is a crime that feeds on the climate of fear that the drug war has created across wide swaths of Mexico. Anyone can pretend to be a member of the notorious Zeta criminal gang, for example, and easily make money off the target's panic. There is no overhead and little risk for the extortionist.

Mexico's soaring drug-war violence (more than 50,000 people killed in a little more than five years) and incidents such as the casino arson "make the threats seem very credible; that's its success," said Edna Jaime, head of Mexico Evalua, a Mexico City think tank.

"This is a very pernicious crime," she said. "It is underreported and does terrible damage" to society and the economy.

Genaro Garcia Luna, the nation's public safety secretary and head of the federal police, said his officers have investigated 283,000 extortion complaints since the drug war was launched in December 2006. But that's not the full extent of the problem. Experts say probably two-thirds of extortion cases aren't reported to authorities.

Bribe-paying has always been a part of Mexican society. But it is only within the context of the drug war that outright extortion has exploded, in part because perpetrators could emulate ruthless traffickers. Security experts trace the sudden surge in extortion to 2008, when a crime until then largely limited to Mexico City spread across the nation.

"That's when it grew brutally," said Carlos Seoane, general director in Mexico of the private security firm Pinkerton. "Like a swine flu epidemic."

Although complete figures are hard to come by because of the underreporting, the National Citizens' Observatory, a group that compiles crime statistics, estimates that extortion has soared by 180% in the last decade.

The crime generally falls into two categories. The majority of shakedowns are by telephone — as many as 2 million a year — and many of those are made by inmates using throwaway cellphones. In a call or text message, the extortionist pretends to have kidnapped a relative, or threatens to do so, or claims to be outside a business or home, prepared to open fire.

"The bad guy controls the victim like a puppet," said Seoane, who has handled hundreds of extortion cases. "You don't know who's talking, and it generates terror."

In these scams, the extortionist actually has little or no real information about the target and could easily be calling from hundreds of miles away. He counts on fear and in fact poses little real danger. Still, people pay.

"We can do this the peaceful way, or we can go the way of the machine gun," one extortionist told his victim, according to a call recorded by security personnel and made available to The Times.

The more ominous scheme involves gangs who have control over a territory and make their threats in person. They show up at a store, business, factory or construction site to demand "quotas," or derecho de piso, a kind of protection money. You can't operate if you don't pay.

These territory-based extortionists enjoy the advantage of having done enough reconnaissance to know key details about the victims and thus can enhance the threat. The Rat, for example, who is awaiting sentencing, watched his targets long enough to know how many kids they had and where they went to school; he then allegedly used that information to terrorize his victims.

The owners of a very hot nightclub in Cancun decided it was worth the price when goons showed up expecting to be paid about $800 a week. That went on for a few months. Then the extortionists doubled their demand. And now, said a security consultant involved in the case, the price tag is nearly $4,000 a week.

"Now they realize it will never end," the consultant said. "They feel like prisoners."

At the Ciudad Juarez store of a big international hardware chain, extortionists called the manager and demanded $50,000. He quickly left the store, only to be intercepted by the callers and held in the trunk of their car for three hours before being released.

"Next time, we kill you," they told him.

Instead of paying, he did what many entrepreneurs are doing: He closed the store and left the country.

The number of Mexican businessmen transplanting themselves, and often their businesses, to the United States has grown enormously in the last five years, as measured by so-called investment visas issued by the U.S. government to wealthy Mexicans, and by the millions of dollars those Mexicans are investing in new enterprises north of the border.

Businesses' flight represents a serious blow to Mexico's struggling economy, in terms of lost investment, lost tax revenue and lost jobs.

A study last year by the Bank of Mexico found that more than 60% of Mexican businesses said they had been hurt by the national climate of lawlessness, with extortion counting as one of the prime factors. Production losses totaled 1.2% of gross domestic product, the study found.

The construction industry is also suffering.

At a shopping mall under construction on the outskirts of Mexico City, the extortionists knew to hit their target on a Saturday: pay day.

With the masons, electricians and plumbers cowering at the back of the site, the extortionists, claiming to be members of the notorious La Familia cartel, said they would open fire on anyone who tried to leave unless they were paid. In that case, according to people involved, the police arrived and arrested the assailants, a rarity. More often, construction foremen routinely make payments to a bag man who arrives weekly or monthly.

Jose Eduardo Correa Abreu, president of the Mexican Chamber of Construction Industry, said the problem has become so bad that in some states, such as violent Guerrero, builders have stopped taking on certain projects.

It's not just the business sector.

Last month, priests from 19 Roman Catholic parishes in the state of Mexico, which surrounds this capital, went to authorities to beg for protection from gunmen who appeared at their churches and demanded monthly payments.

"They were terrified," said David Castañeda, mayor of Atizapan. Threatening priests "is a sensitive point for society."

The priests, from the area where The Rat was working, had reason to be terrified: A couple of weeks earlier, Father Genaro Aviña was found beaten and shot to death in the sanctuary of his Immaculate Conception Church. The extortionists warned that Aviña was the example.

Local authorities installed "panic buttons" in the churches for the priests to call for help next time the gunmen showed up.

A year earlier, priests and evangelical preachers in Michoacan, President Felipe Calderon's home state, reported that they were forced to pay extortionists in order to hold religious holiday festivals.

In Acapulco, thousands of schoolteachers refused to report to their classrooms last fall after extortionists demanded that they fork over part of their salaries. The threats came in letters delivered to the teachers, on signs hung outside the schools and, in a few cases, from men who burst into schools. Much of the school system was paralyzed for months, until the federal government sent troops into the region.

"As a crime, extortion has become totally indiscriminate," Seoane, of Pinkerton, said. "In a country like Mexico, it's easy to trade on fear."

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18 Borderland Beat Comments:

Anonymous said...

The author works to lay extortion at the feet of the war on drugs, another journalist,more BS. The message is if Calderon had never challenged the Drug Empire all would have been OK, So NOW leave the narcos alone and all will be OK in the future. VOTE PRI. Those nasty Fed Troops they need to go away! If Mexico does not keep the momentum of reform going it may never happen again.

Anonymous said...

How many countrys have large groups of poor people? Are they all as lawless as Mexico? If not then why is Mexico such a hard core Criminal State?

Siskiyou_Kid said...

While president Calderón has played lip service to going after drug traffickers and corrupt politicians, he's left the criminals a wide berth with which to kidnap, rob, and extort Mexico's middle-class with impunity.

As long as there are no opportunities for young people, they will continue to aspire to be criminals. The PAN has done nothing to offer education or jobs to Mexico's poor, and this is a major factor in the huge recruitment pool available to organized criminals.

The PRI may have allowed the cartel's rise to power, but at this point Calderón is an abject failure, and Peña Nieto couldn't possible be worse for Mexico.

Texcoco said...

March 19, 2012 6:02 PM Is funny the way you are saying things, like if it was Calderon the one who created all the problems. Way before Calderon became a president, kidnappings and extortion was a common way to make money, as far as I know, Calderon was already tier of the power of organized crime and the way they will conduct their busyness.

Organized Crime got to point that they will say, I can do anything I want, every police institution gets pay by us, so what can they do? Thats when the military came, they came to let Organized Crime that they can also shot back and kill criminals here and there.

Mexican people if you want to give more power to Organized Crime vote for the PRI.

Mexican people if you want to give a ticket to hell to Organized Crime vote PAN.

Anonymous said...

The country is governed by thugs. The government is denying its population access to well paying jobs. What do they expect these people to do? Look up Mexico's minimum wage...
Then they wonder why people kill for 100 dollars. U.S minimum wage is 7.25 an hour. BIG DIFFERENCE...

http://online.wsj.com/article/SB10001424052970203413304577091050495760194.html

Siskiyou_Kid said...

Texcoco, I know that the PRI has historically been the party of organized crime, but it's been 12 years since they lost the presidency, and in 12 years the new guys have done a good job of picking up where the PRI left off.

It's amazing how rapidly absolute power corrupts absolutely.

Anonymous said...

DO NOT think that if you leave the narcos alone, the extortion will suddenly stop. Now that they've tasted that money it will only continue to get worse until the government can pose a threat and hold people responsible for their actions, including corrupt officials.

Anonymous said...

Mexico is a narco-state and a narco-society. Most of the economy revolves around drugs and related activity. So it's no surprise that most citizens are involved at some level as well as the politicians and LE. It's corrupt from top to bottom.

Anonymous said...

Only the people of Mexico know when they have had enough. Arm your self Mexico because it's only going to get worse.

Anonymous said...

Why don't we just forget about mexico.and close the border cause not even the goverment doing anything over there.andlet them kill each other off oh an send more guns

































borders

Anonymous said...

Poverty and crime go hand in hand.
What is a young man supposed to do,to earn money?
There is nothing he can turn to.Instead of spreading the wealth,they concentrate wealth in certain sectors of society,and we wonder what is going wrong.If there is absolutely no other way to make money,what would you do?

Anonymous said...

There are Good people in Mexico,they are being overrun by the half assed Govt. that allows criminals such a ruling role in the country.

Anonymous said...

23 year old daughter of friend kidnapped yesterday in Ciudad Juarez. $50,000 ransom demanded by today from relatives who can't even begin to raise $5000.

Anonymous said...

My cousin's daughter was kidnapped off a bus last week- equivalent $30,000 dollars was demanded cause her father is a mechanic (?) (as if he owned a bank!), a mechanic barely scraping by. There is no way in the world, they can raise $2,000. This is impossible. She is 20 years old and a student. I should get used to saying, "was a student". It is so terrible.

Anonymous said...

The Time Has Come for the Mexican Majority To Grow some "BALLS" instead of just the Minority
of Mexicans having the Balls to say No and getting murdered or Run Out of Their Own Country for Fear of their Families being murdered and Knowing that the Government will
not stand behind them But In Front Of Them simply because the Police and elected Officials
are too scared to move on these piece's of shit!
I myself think that private business should hire
mercenary companies like "Blackwater,Dyncorp,Aegis,skylink,Omega and
after Blackwater the most famous "Executive Outcome" which only took 3 mos. to bring the RDF
in Sierra Leone to their knees after the U.N and the Army had fought them for 3 years to a standstill. In other words these companies can
bring these Mexican Gangster Punks in check and
make them obsolete within a year! Then and Only then do you hand power back to a completely New
State,Local and Municipal Police Departments. I'm not talking thru a paper ass; I've seen what they can do with my own eyes. Sure it's a
little "Unconventional" but presently Mexico and all it's citizens are on the balls of their
Ass. If someone has a better idea; Impliment it..!

Anonymous said...

All the politicians are the same there is no such thing as the working class party no more, all of them piss in the same pot. But why did the PRI allow it to grow out of control Calderon had no option forget it if he's PAN or PRI what he's started needed doing. Sure jobs are needed and training for young people, a better minimum wage also, BUT don't for one minute think that it's the governments fault that people can just kill like it is nothing, you would have to be a pure evil cold hearted person to do something like that. There's lots of poor people in Mexico but not all of them are involved with drugs, it's not like stealing from a 7-11, we're talking killing, shootings, decapitations etc does this sound normal, the problem is the society, culture problem, it's easy to just blame the politicians, politicians are the same no matter what party, no matter the country, Mexico, UK, USA, France, no matter the continent, Asia, Africa, Europe, North America, they're all liars and getting paid for it. Greetings from Europe

Anonymous said...

Last year there was a shop owner in Chihuahua that told the extortionists he would pay them the money as requested when they returned. Instead, he shot them both dead and wounded a third as he drove away. Anybody know what happened to him?

It was in the local paper in Juarez I think. No follow-up by the media that I can find online.

Anonymous said...

This happened to me last week somebody texted me from my boyfriend's(who is in Mexico) cell phone, they said they wanted $2,000 dollars that if I did'nt sent them the money they were going to kill him. I called his house and he answered the phone and told me he had lost his phone. The sad part of this story is that I think it was him who was sending me the messages

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