Brazil prepares operations against PCC and Comando Vermelho, targeting illegal cigarettes, irregular bets, fintechs and smaller banks

The Brazilian federal government is in the final stage of preparing new operations against the Primeiro Comando da Capital (PCC) and Comando Vermelho (CV), with illegal cigarette trade and irregular bets in the crosshairs. For PSPs, acquiring teams, and banks, the key detail is that authorities say smaller financial institutions and fintechs have been used to launder proceeds from contraband and illegal betting that continued operating after sector regulation.

1. A source with direct knowledge said the operations can happen “at any moment,” but no exact date has been set because the actions require coordination with police authorities, the Public Prosecutor’s Office, and the judiciary. The operations will take place in Brazilian territory.
2. Authorities have identified that criminal organizations use smaller financial institutions and fintechs for money laundering. According to VALOR with Reuters, the financial chain includes funds from cigarette smuggling and irregular cigarette sales, plus irregular bets that are still operating after regulation.
3. The government says the goal is to financially squeeze Brazil’s two largest criminal factions. The planned actions will also affect companies and financial institutions involved in the laundering chains, and the source stressed that the government’s biggest sector-specific concern is with financial institutions, which it sees as more exposed to US sanctions.
4. The new operations are presented as a continuation of the government’s financing crackdown strategy and will not change after the United States designated PCC and CV as international terrorist organizations. That US decision was announced last week and takes effect on 5 June.
5. The government also said the use of the fuel sector by organized crime is “very well diagnosed” after Operation Carbono Oculto, and reports from that operation were sent to the United States with a request for cooperation. Large banks are already reviewing policies and seeking legal input on risks tied to US sanctions.

For high-risk payments people, the practical takeaway is simple: Brazilian authorities are not treating illegal betting and illicit tobacco as isolated retail crime stories. They are describing them as part of a financing chain that runs through fintechs and smaller banks, which is exactly the part of the stack that tends to get attention when sanctions and correspondent-banking risk enter the room.