World

In Brazil, Your Internet Service Provider May Be A Pest, Police Says

TIM, a unit of Telecom Italia SpA, declined to comment, referring inquiries to the Brazilian telecom industry

RIO DE JANEIRO:

When Rio de Janeiro residents took shelter at home last year during the deadliest phase of Brazil’s COVID-19 outbreak, police detective Gabriel Ferrando said he got a hint that something suspicious had disrupted local internet services.

Access has been lost across the vast area of ​​Morro da Formiga, or Ant Hill, a difficult neighborhood to the north of the city. When Ferrando questioned a technician from broadband provider TIM SA tasked with fixing the disruption, the employee, who declined to be named, said gunmen had chased him away with a warning not to return.

Apparently a new internet provider has claimed the area: a company whose investors at one time included accused drug and weapons traffickers allegedly had links to Brazil’s notorious Red Command criminal syndicate, according to Ferrando, court documents filed by authorities and business registration records seen by Reuters. Using stolen equipment, some of which was confiscated from TIM, newcomers soon had their own internet service up and running, Ferrando said. Residents can sign up with the new firm, he said – or not.

TIM, a unit of Telecom Italia SpA, declined to comment, referring all inquiries to Brazilian telecommunications industry association Conexis. In a statement, the group urged state law enforcement to act to protect legitimate operators.

Ferrando, a veteran of Rio’s leading organized crime unit, tried to do just that. In a closed report documenting a months-long investigation, he asked Rio state prosecutors in February to pursue charges against the alleged pirates. The prosecutor’s office did not respond to a request for comment. No charges have been filed.

Morro da Formiga is not the only community reporting problems. Reuters interviewed nearly two dozen telecommunications industry executives, law enforcement officers, technicians, academics and internet customers in Brazil, and reviewed thousands of pages of court filings submitted by police.

The public and documents describe the bold takeover of internet services in dozens of neighborhoods in major Brazilian cities by companies linked to criminals who are allegedly not afraid to use force and intimidation to push competitors away. The result, these sources say, is that tens of thousands of Brazilians now rely on unreliable second-class broadband networks estimated by industry and law enforcement officials to generate millions of dollars each year for alleged criminals.

Bootleg providers can become unresponsive when services crash and impatient when bills are missed, some customers told Reuters. In Rio’s working -class Campo Grande neighborhood, a resident describes how someone knocks on his door every month to collect 35 reais ($ 6.80) – in cash.

There was “pressure to pay on the day they chose without delay,” said the customer, who did not want his name published for fear of retaliation.

It’s the reliable revenue stream that is made even more lucrative by the COVID-19 pandemic, which is forcing families online for school, work and shopping. In 2020 alone, the proportion of Brazilian households with an internet connection increased by more than 12 percentage points to 83%, according to the latest data available from Cetic.br, an information technology organization.

Pirates also looted equipment and infrastructure, mostly reused for their temporary networks, authorities and telecom executives said. Theft and destruction of telecommunications equipment increased 34% in 2020 from 2019, representing about 1 billion reais ($ 194 million) in direct annual losses, according to Feninfra, an industry group whose members include installers and repair workers. It said the figure rose another 16% in the first half of 2021.

PROSECUTION SCHEME

The Brazilian telecommunications industry is not alone in its struggle. Criminal groups have for years controlled the distribution of cooking gas, drinking water jugs and other bases in many low-income urban neighborhoods.

But by building their own broadband networks, Brazilian criminals are increasing their sophistication, according to more than 20 technicians, industry representatives and law enforcement officials interviewed by Reuters. They said the scheme usually works like this:

First, thieves steal or damage equipment belonging to traditional broadband operators. When the repair team arrived, they were threatened by gunmen who warned them not to return. Last year in Rio alone, the restricted zone increased to 105 locations for Oi SA, one of Brazil’s largest internet providers. The figure has quadrupled since 2019, according to data supplied by the company.

Shortly after service was disrupted, telcos linked to organized crime groups set up their own networks, piggybacking on existing infrastructure. In some cases, these outfits are operated directly by members of drug trafficking groups including Red Command or Pure Third Command, one of its main rivals.

Others are run by militias – a type of criminal outfit made up of retired and off -duty police. In other cases, they are run by businessmen who pay bribes to thugs to eliminate competition.

Often intruders receive help from crooked employees of major suppliers who sell them stolen expertise and equipment, according to Rio state prosecutor Antonio Pessanha. He told Reuters he was investigating criminal activity in the telecommunications sector in and around the city of Rio, the state capital.

In one recent case, an employee of Claro, America Movil SAB de CV’s local unit in Mexico, offered to sell the company’s equipment to an organized crime partner, according to a recorded phone call that Pessanha said his office was obtained through a court-approved wiretap . He did not specify the criminal organization allegedly affiliated with the person in the call, nor did he identify Claro employees or other participants. An investigation is ongoing, and Reuters has not been given access to the footage.

Claro declined to comment on the alleged incident.

NEW PLAYERS IN BUKIT SEMUT

In Morro da Formiga, detective Ferrando said he began receiving anonymous tips from some of its approximately 5,000 residents in the first half of 2021 who said broadband services provided by major operators had stopped working.

One company dominates there now, said Ferrando, a firm called JPConnect Servicos de Telecomunicacoes. It was established in 2019, according to corporate registration documents filed with the Rio government and seen by Reuters.

The records show that until late last year JPConnect was partially owned by an individual named Paulo Cesar Souza dos Santos Jr., whom authorities alleged was a member of Comando Vermelho, or Red Command, Rio’s largest organized crime group. In 2011, Rio state prosecutors indicted dos Santos for drug and weapons trafficking, according to court records seen by Reuters. He was later released.

Dos Santos transferred its 50% stake in JPConnect in September 2021 to another investor, Alexandre Rodrigues de Almeida, according to registration documents.

In January, police officers searched JPConnect’s headquarters in Morro da Formiga, according to Ferrando. He said police found equipment belonging to TIM, Oi, Claro and Telefonica Brasil SA, a local unit of Telefonica SA Spain. All of the companies declined to comment on Ferrando’s allegations.

The JPConnect investigation has never been reported before. Authorities have not yet filed charges in the case. Reuters was unable to contact officials at JPConnect. The company’s registered phone number does not work.

Dos Santos and Almeida declined to comment through their attorneys. Their lawyer, Eberthe Vieira de Souza Gomes, said JPConnect operates legally and has gained market share by offering quality products. He said dos Santos had nothing to do with any criminal organization, indicating that his client had been acquitted of all charges related to his indictment in 2011. Reuters confirmed dos Santos’ release through Rio state court documents. The document does not state the year of his release.

TIM, Oi, Claro and Telefonica Brasil referred the question to Conexis, a telecommunications trade association. In an interview, Marcos Ferrari, president of the group, described various problems faced by the Brazilian industry in general, including vandalism, theft, threats to workers and seizure of service areas by players suspected of having ties to the underground world.

Authorities must “prevent this type of criminal action,” Ferrari said.

In greater Rio there are several other broadband operators under investigation for allegedly rude tactics and links to criminals, authorities said.

Among them was Net & Com, which made headlines in March 2021 when Rio police raided its downtown headquarters as part of a broader investigation into the alleged drug group. Police have publicly stated that they are investigating the firm for allegedly paying criminals linked to the Red Order to help them take over the telecommunications market in impoverished neighborhoods across metropolitan Rio.

More than three dozen people, including alleged members of the Red Command, last year were charged with drug and weapons smuggling as well as conspiracy, according to court documents filed by Rio prosecutors and seen by Reuters. They are currently on trial and have maintained their innocence.

In a document presenting the government’s case, authorities claimed the ring also profited by accepting bribes from Net & Com to drive telecom competitors out of the neighborhoods where the company now operates. Net & Com and its executives have not been charged.

Pedro Santiago, an attorney for Net & Com, said the company is a leading operator that has been a “victim of witch hunts.” Santiago said he had checked several hours of police footage and this showed no connection between the firm and any criminal elements.

Police disputed the characterization in court documents seen by Reuters, citing evidence of alleged theft of equipment and conversations among conspirators citing Net & Com’s alleged role.

Pessanha, Rio state prosecutor, said the investigation is continuing.

“The new gold for the criminal world,” he said, “is the internet.”

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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