Brazil has uncovered a money laundering operation linked to the Chinese Communist Party. The e-commerce platform had been collaborating with one of the most notorious crime groups in Latin America over the past seven months, laundering over 1 billion Brazilian reals (approximately 190 million USD). Prosecutors have accused the Chinese-operated distribution network of concealing income, evading taxes, and engaging in money laundering.
According to a report by the South China Morning Post on February 14th, a prison gang in Brazil known as the Primeiro Comando da Capital (PCC) used a Chinese e-commerce platform named “Knup Brasil” to sell imported consumer electronics products such as mobile phone chargers, electronic scales, and other accessories at low prices across Brazil.
The Sao Paulo police stated that customers placed orders through the platform and were instructed to transfer funds via Brazil’s instant payment system, Pix, to independent companies that did not have legitimate business activities. These third-party companies then issued receipts with significantly lower amounts compared to the actual payments, causing a severe mismatch between reported income and actual cash flow.
The investigation originated from a buyer who purchased USB motorcycle phone chargers and electronic scales from the e-commerce platform, reporting that not all goods were delivered and the receipt amount was only a fraction of the actual payment. This complaint led the authorities to a warehouse in Bras District in downtown Sao Paulo, unraveling a criminal network comprised of 14 registered companies and at least 18 individuals.
The case has drawn widespread attention due to allegations of Chinese businessmen operating in Brazil with links to Brazilian gangs. Local media reports identified a Chinese businessman named Yifeng Jang as the leader of the Chinese-funded e-commerce criminal network. It is believed that he is currently in China and was not arrested in Thursday’s operation.
Established in 1993, the Primeiro Comando da Capital, initially a prison gang, has evolved into a tightly organized criminal organization. Brazilian authorities have stated that the group controls cocaine smuggling routes connecting South America, Europe, and Africa.
Reports indicate that the gang controls vital border passages in Brazil and utilizes the country’s main ports for the overseas trafficking of drugs. In recent years, the gang has expanded into financial crime, including involvement in financial technology platforms, cryptocurrencies, and urban transportation companies.
Authorities have accused individuals with criminal records associated with the group of serving as nominal partners and beneficiaries of high-value assets within the electronic business structure. Prosecutors stated that this strategy aims to shield the true controllers of the group.
On Thursday, police arrested two individuals, one with a criminal record linked to the gang and another identified as a female coordinator of the Chinese-funded criminal network.
Authorities have yet to determine if the gang directly commanded the money laundering operations or if members of the Chinese-funded criminal network sought the gang’s assistance in transferring substantial funds. Investigations into their relationship are ongoing.
Fernando David, the chief of the Organized Crime Department of the Sao Paulo State Police, remarked that the case garnered particular attention due to the direct involvement of Brazilian gangs.
Prosecutors disclosed that the criminal network operated through a series of “transit accounts” responsible for receiving and redistributing funds, dispersing transactions to different “straw account” holders to increase tracking difficulty. Currently, the asset recovery department has obtained court orders to freeze related properties, bank deposits, and financial investments.
Ivan Agostinho, the state prosecutor involved in the case, stated that their primary goal is to sever the financial lifeline of the criminal organization. “Our main objective is to cut off their source of funds. This is the only way to combat criminal organizations,” he remarked.
This case is the latest in a series of incidents involving criminal groups linked to the Chinese Communist Party operating in Brazil.
In December 2024, local news outlet “Metropoles” reported the arrest of Chinese national Liu Bitong, who was accused of leading a gang known as Grupo Bitong. Investigators revealed that the organization was a branch of a Chinese gang active in the vast wholesale district of downtown Sao Paulo.
Brazilian police apprehended Liu Bitong near the Venezuela border. In preceding years, prosecutors charged Liu Bitong with orchestrating the murder of a Chinese businessman in 2015. The victim, a local seller of mobile phone accessories, was killed for refusing to pay protection money.
In early 2025, the same media outlet reported another case of a recent kidnapping and extortion targeting Chinese shop owners in the Bras and Marco Street areas. These two neighborhoods are renowned for housing a concentration of import retailers.
In a December incident, the victim’s relatives in China received a video showing the victim being kidnapped, pleading for ransom payment to the captors.