Loan sharks hire organized crime as a muscle in Michoacan

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Another sign of the increasing use of violence and intimidation in Mexico: informal moneylenders in the embattled state of Michoacán are reaching out to local enforcers to get debtors to surrender their homes.

The Michoacan Attorney General has released details of a network of organized crime affiliates who have been hired by local moneylenders to kidnap debtors and then force them to surrender their homes and property in payment. reported by El Universal. Government agencies secured seven properties that were illegally stolen in 2011 as cash on behalf of loan sharks.

“These are properties that have been taken from their rightful owners, who have been kidnapped and forced to cede the properties in payment for a debt,” a attorney general told El Universal.

The authorities have not identified the organized crime groups responsible for carrying out the contractual kidnappings and property seizures, or whether there have been any arrests. The investigation continues.

El Universal noted in his report that authorities in other parts of the country are looking into similar cases, including the Yucatán, where there has been an increase in express kidnappings suspected to be linked to illicit lending in recent weeks.

InSight crime analysis

Security problems have plagued Michoacan for years and still suffer from widespread confrontations between those who call themselves “self-defense groups” and organized crime, a complicated mix of diverse non-state actors. At least some of these actors have turned to the loan shark, or at least worked as enforcers for loan sharks.

SEE ALSO: Mexico’s Security Dilemma: Michoacán’s Militias

This can, in part, be explained as a natural by-product of the organized crime fragmentation in Mexico. Mexico’s monolithic criminal organizations have been smashed in recent years. What remains is contract labor, a lively black market for weapons and criminal armaments that also include an understanding of violence and intimidation.

At the regional level, loan sharing has also become a popular way for organized crime networks to get illegal funds into circulation. Such operations often rely on violent enforcement tactics, which in turn leads to higher security concerns and higher homicide rates.

Authorities in Cali, Colombia, for example, recently estimated that up to 10 percent of the murders in the city could be linked to illegal moneylending operations.

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