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A Brazilian prison gang that formed in the 1990s has steadily risen in influence across South America, according to analysts, and now embraces increasingly sophisticated money laundering techniques outside of jail.

Eight inmates of Taubate, a penitentiary in the state of Sao Paulo, formed Primeiro Comando da Capital, Portuguese for First Capital Command, nearly 30 years ago to protest poor living conditions and widespread violence in jail, then steadily grew in number and power over the following decades as Brazil’s prison population skyrocketed.

Fast forward to the present and PCC counts tens of thousands, perhaps hundreds of thousands, of members throughout Brazil, controls most of the nation’s $8 billion cocaine trade and runs affiliates from Argentina to Colombia, according to Ryan Berg, an analyst with the American Enterprise Institute in Washington, D.C., who authored a report on the group in March.

A second generation of members has emerged from under the old guard of PCC to devise more complex schemes to launder their proceeds, said Berg. PCC primarily raises money through membership fees inside prison, and through drug trafficking, dynamite attacks on ATMs and bank heists outside of it, particularly in the tri-border region of Argentina, Brazil and Paraguay.

In fact it was a bank robber by the name of Marcos Williams Herbas Camacho, also known by the nickname Marcola, that imbued the gang with a more profit-driven vision after joining its leadership in 1999.

Marcola continues to head PCC from jail, where he has spent much of the past two decades, serving a 233-year sentence for drug trafficking, murder and other offenses.

Under his leadership, PCC gradually mutated into a full-fledged cartel, with hands in the production of marijuana in Paraguay, smuggling of cigarettes, guns and ammunition in Brazil and the distribution of Bolivian cocaine, said Leonardo Coutinho, a Brazilian journalist and researcher currently based in Washington, D.C.

According to Coutinho, who profiled the group last year for Prism, a journal of the National Defense University, PCC has also built increasingly strong relationships with criminal organizations and extremist groups in Europe, Asia, Africa and the Middle East.

“PCC controls a lot of gas stations, illegal exchange houses and an enormous number of houses and apartments to rent,” Coutinho told ACAMS moneylaundering.com via email. “PCC uses the strong capacity to provide money in cash to offer ‘financial services’ to corrupt actors and other criminals.”

Victoria Herbas Camacho, daughter of Marcola’s brother and top lieutenant, runs the Brazilian branch of British currency exchange Astroforex, one of several money services businesses and other ostensibly legitimate firms controlled by younger PCC operatives.

“I .. believe that the PCC’s connections with the Italian and Serbian mafias … are an attempt to further ties for money laundering purposes in European banks,” said Berg, the AEI analyst. “For right now, the group relies a great deal on the under-policed free-trade zone of the tri-border area to launder its ill-gotten gains.”

A franchise system, whereby inmates can establish new cells in their prisons after adopting publicly available bylaws and paying a fee to PCC’s central leadership, has fueled the group’s expansion, while its decentralized structure and detailed recordkeeping gives it both a democratic appeal and tight grip on its members, Berg told ACAMS moneylaundering.com in an interview.

Leaders cultivate loyalty by covering funeral expenses, legal fees and prison visits for relatives, he said.

“Control is executed via various ‘sintonias’ [Portuguese for “getting in tune”] which are essentially control boards … broken down into various specialties, such as a sintonia for legal aspects, financial aspects, and even one for international expansion efforts,” said Berg. “These sintonias, in turn, are led/governed by the ‘sintonia geral final’, the group’s highest body.”

Gilberto Aparecido Dos Santos, or “Fuminho,” a high-profile associate who had been a fugitive since he escaped prison in 1999, was arrested April 3 in Maputo, the capital of Mozambique, as part of a joint operation involving the U.S. Drug Enforcement Administration, Brazil’s federal police and local authorities.

He is believed to have traveled through several countries in Africa to arrange new drug trafficking and money laundering partnerships for PCC.

Contact Valentina Pasquali at vpasquali@acams.org