Brazil’s Federal Police cracked down on a criminal network trafficking fake Paraguayan cigarette brands in Minas Gerais state, according to the Organized Crime and Corruption Reporting Project (OCCRP). Law enforcement agents reportedly issued multiple arrest warrants and froze more than $4 million in assets.
The suspects face charges of smuggling, counterfeiting, human trafficking, slave labor, forgery, misuse of machinery, crime against consumer relations, crime against trademark registrations and money laundering.
Led by a businessman from Sao Paulo, the organization forced Paraguayan nationals to make the cigarettes in hidden factories. The group reportedly picked up workers in Paraguay, blindfolded them, and drove them east across the border into Brazil, where they were held under surveillance inside the factories for several months. Their telephones were confiscated and they had no contact with the outside world.
The workers produced counterfeit versions of Paraguayan brands, such as the Tabesa’s TE, Eight and Palermo. Once finished, the cigarettes were transported in trucks, hidden behind shoes.
Paraguay is a major contraband hub in South America. More than 97 percent of cigarettes produced in Paraguay end up in countries such as Brazil. The business is also entangled with money laundering, political corruption and criminal gang activities.
In March of this year, the OCCRP reported on the rescue of 19 Paraguayans trapped in an illegal cigarette factory in Rio de Janeiro. Brazil rescued 918 people working as slaves in the first three months of this year.