Latin America’s most powerful criminal groups have expanded their operations beyond drug trafficking—and, in doing so, have become more resilient. That is what my colleagues and I discovered while researching for a new study (external link) on the structural transformation of organized crime in Latin America and the Caribbean.
Today, criminal networks generate revenue from both illicit and legal sources. Many control entire neighborhoods and influence local politics. Others invest in legitimate businesses and exploit global transportation and financial systems, using shell companies and digital payment platforms to conceal the illicit origin of their money.
Their businesses extend into seemingly legitimate sectors, ranging from mining to the fuel industry. This diversification protects criminal groups against “enforcement shocks,” such as drug-trafficking crackdowns. It can also help them buy protection (external link) from corrupt officials and enable the organizations to root themselves more deeply in local and national economies. The contest is increasingly over who sets the rules and who can enforce them.
The criminal economy goes corporate
Brazil (external link) is one of the places where these trends are in evidence.
On August 28, 2025, more than 1,400 Brazilian law enforcement officers fanned out across eight states in what authorities called the largest operation (external link) against organized crime in the country’s history. Their targets included more than a thousand gas stations, four ethanol plants, a fleet of trucks, a port terminal, investment funds, and offices on Faria Lima Avenue, the heart of São Paulo’s financial district.
The investigation, dubbed Operation Hidden Carbon (external link), revealed an alleged money laundering scheme linked to Brazil’s most powerful criminal organization, the First Capital Command (PCC). Investigators allege that the criminal network (external link) used gas stations and other companies in the fuel sector to launder illicit proceeds, funneling them through payment processing companies and investment vehicles that concealed their origins and ultimate ownership.
The scheme reportedly moved billions of dollars (external link) through the automotive fuel sector and a network of payment firms and investment funds, with some fintechs allegedly operating as unlicensed banks. Authorities initially seized around R$ 1.2 billion, or approximately US$ 220 million, in assets.
Operation Hidden Carbon illustrates a broader shift in organized crime across the Americas. Several of the region’s largest organizations now combine drug trafficking with illegal gold mining (external link), fuel theft (external link), human trafficking, and the manipulation of digital payment systems. Others have also expanded into logistics, finance, real estate, and municipal services.
Many also assume roles (external link) typically associated with the government, from enforcing local rules to providing basic services. A 2025 survey conducted across 18 countries revealed that 13% of respondents—equivalent to nearly 80 million people—stated that local criminal groups (external link) provided order or reduced crime in their communities.
How criminal networks diversified
Criminal diversification did not occur all at once. Latin American groups formed international trafficking alliances in the 1980s and 1990s, but the shift toward multimarket networks became more pronounced in the mid-2010s. As drug trafficking became riskier, criminal groups moved into migrant smuggling and illegal mining.
Cybercrime opened new revenue streams (external link), while cryptocurrencies made it easier to conceal profits. The COVID-19 pandemic accelerated the trend (external link) by weakening state institutions and expanding informal economies.
Diversification increases profits and spreads risk, reducing reliance on any single commodity or specific corridor.
Cocaine remains highly lucrative, which is why few organizations abandon it. Instead, they layer new illegal activities onto the territories and logistical systems they already control. The same infrastructure and intermediaries can sustain multiple criminal markets simultaneously.
Organizational structures have also changed. Rigid hierarchies have given way to more flexible networks of transporters and financial specialists operating through shell companies. Money and personnel can move between activities as law enforcement pressure and market conditions shift. Real estate and commercial deals conceal proceeds, while digital assets facilitate transfers. This wealth can then be converted into political influence.
This adaptability complicates enforcement. Police and regulatory agencies are generally organized by crime type and national jurisdiction, while the networks they seek to dismantle operate across diverse markets and borders. Pressure on drug trafficking can prompt a group to pivot toward gold or extortion without destroying its finances. Police operations may temporarily remove leaders, but they leave corrupt relationships and financial structures intact, allowing the organization to regenerate.
Why force remains appealing
As we argue in the new study, political leaders across much of Latin America and the Caribbean are still judged primarily by how visibly they confront crime. People living with daily extortion and victimization want relief (external link) quickly. Soldiers on street corners and prisoners paraded before cameras offer immediate proof that a government is taking action.
Financial investigations and judicial reforms, on the other hand, yield slower results and offer fewer immediate political rewards.
These political incentives help explain the enduring appeal of “mano dura,” or iron-fist security policies. El Salvador’s state of exception became a regional benchmark after the official homicide rate dropped from about 105 per 100,000 inhabitants in 2015 to 1.3 in 2025. By June 2026, more than 92,000 people (external link) were imprisoned in El Salvador. But the crackdown also suspended constitutional guarantees, leading to mass detentions without due process and to hundreds of deaths in custody (external link).
Since El Salvador imposed its state of exception in 2022, the governments of Argentina, Belize, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Panama, Paraguay, and Trinidad and Tobago have adopted hardline security measures (external link) inspired by or similar to “mano dura.” Peru’s newly sworn-in president, Keiko Fujimori, for example, pledged a tougher security strategy (external link), including a larger role for the Armed Forces in areas under a state of emergency.
The limits of “mano dura”
Crackdown operations that neglect financial and corruption investigations can suppress some forms of violence without dismantling the economic structures or political protection that sustain criminal power.
Ecuador illustrates how quickly such gains can unravel. After declaring an internal armed conflict in January 2024, the government deployed troops (external link) to prisons and violent cities. Initially, homicides dropped, but then surged to over 9,000 in 2025 (external link), the highest level in the country’s modern history.
The gangs survived because their power extended far beyond the streets. They maintained control over prison networks and access to the ports through which cocaine moves in Guayaquil. Their ties with corrupt officials also endured. Military pressure disrupted the gangs (external link), but it also triggered fragmentation and heightened rivalry among the resulting factions.
Washington raises the stakes
Across Latin America, right-wing political candidates have gained ground (external link) by putting public order at the core of their campaigns. The subsequent shift toward more punitive security policies makes sustaining more gradual institutional reforms more difficult.
Washington is reinforcing this trend. The United States has expanded the use (external link) of foreign terrorist designations against criminal organizations. In May 2026, the State Department announced terrorist designations (external link) for the PCC and the Comando Vermelho (CV), another major Brazilian faction, as foreign terrorist organizations. The designations took effect on June 5.
By July 2026, US forces had carried out at least 67 strikes (external link) against vessels suspected of drug trafficking in the Caribbean and the Eastern Pacific, killing more than 220 people.
However, the campaign appears to have had little effect (external link) on curbing cocaine supply. Traffickers altered their routes in response to the strikes, and the available evidence (external link) does not suggest a meaningful tightening of the US drug market.
In August, Washington announced plans (external link) for a $1 billion security package for Colombia, as the country’s incoming administration prepares to wage a more militarized campaign against drug traffickers.
Military pressure, however, addresses only part of what makes criminal groups resilient. Their capacity to endure relies on relationships (external link) with public officials and access to financial systems. Controlling legitimate businesses allows them to conceal ownership and launder criminal proceeds.
US financial intelligence and asset recovery tools could help dismantle this infrastructure (external link), stripping these organizations of the resources they use to expand.
Following the money
Operation Hidden Carbon in Brazil points to a more effective response. Investigators tracked revenues from gas stations through fintechs and investment funds, exposing the corporate structures and intermediaries behind them. They treated organized crime as a system embedded in the economy, rather than merely an armed threat on the streets.
This type of work lacks the immediate public impact of an armed operation, but its effects can be far broader. Freezing assets can deprive criminal groups of the capital they use to buy political protection and expand into both legal and illegal markets. That is why investigators must target the money and the corporations, not just the gunmen.
This article, “Organizações criminosas diversificaram suas atividades na América Latina, tornando-se mais resistentes, mas não intocáveis,” by Robert Muggah, was originally published in The Conversation and is licensed under Creative Commons (CC BY-ND 4.0).