A prison-orchestrated criminal network used crypto to extort and launder money from small auto businesses.
Brazil’s Civil Police have revealed details of a protection racket and money laundering scheme that used cryptocurrency to disguise illicit gains, with more than $45,000 in cryptoassets seized during a sweeping raid.
The operation — known as Operation Timeo — targeted criminals believed to have operated a fraud ring from inside prisons, affecting small businesses in Rio Grande do Sul.
Crypto at the Heart of the Laundering Operation
Police allege the suspects used digital wallets and crypto assets to conceal extorted funds. Beyond the $45K in crypto seized, investigators also froze 13.3 million reais (~$2.3 million USD) across bank accounts tied to 11 suspects.
Officers said the gang focused on auto dealership and repair garage owners, demanding payments under threats of property damage or violence. One of the individuals apprehended also faces charges for unauthorized firearm possession.
Search Warrants Executed Across Southern Brazil
Authorities executed 11 warrants across six cities — including Imbé, Portão, and Cachoeirinha — and coordinated through the organized crime division in São Leopoldo. The operation involved more than 60 officers.
Police believe the suspects specifically targeted garages in Estância Velha, Ivoti, and Sapiranga, focusing on small-scale entrepreneurs.
Crypto Laundering Scheme Tied to Earlier Arrests
The investigation includes 10 individuals and one company, all believed to have ties to previously arrested inmates connected to the same scheme. Officers emphasized that more evidence could surface, pointing to a broader network using crypto and shell firms to launder illicit revenue.
Brazil Cracks Down on Digital Asset Abuse
This case aligns with recent developments in Brazil’s approach to crypto-related crime. Earlier this month, the country’s Superior Court granted judges explicit powers to seize crypto in cases involving financial misconduct — a move that appears to have directly empowered raids like Operation Timeo.
Authorities say they expect additional arrests and further asset seizures as the investigation unfolds.
