Ecuador Arrests 43 in Los Choneros and Los Lobos Raids, Flags 127 Phantom Banks
ECUADOR · SECURITY
Key Facts
- —What happened: Ecuadorian police arrested 43 alleged members of Los Choneros and Los Lobos in two raids on 26 August.
- —The seizures: Officers found US$1 million in cash, about a tonne of cocaine and a drug-plane fuel depot.
- —The Mexico link: Three alleged Los Lobos leaders are tied to Mexico’s Jalisco New Generation Cartel, police said.
- —The money warning: The banking supervisor found 127 phantom entities illegally taking money from the public in 2025 and 2026.
- —The catch: Only 14 of the 43 arrested are in prison so far, and none has been convicted of anything.
- —What comes next: Prosecutors take over both cases, and one phantom entity alone allegedly defrauded clients of US$50 million.
Ecuador hit its two biggest drug gangs with coordinated dawn raids on 26 August, arresting 43 suspects and seizing cash, cocaine and a drug-plane fuel depot. The same day, the banking supervisor warned that 127 phantom entities had been illegally taking money from the public.
Two Raids Before Dawn
The operations, named Jericó and Factoría, began in the early hours of 26 August 2026. Police commander Pablo Dávila called them two major blows against two criminal structures.
Together they produced 43 arrests across four provinces. Twenty-four suspects fell in Factoría and nineteen in Jericó, and 14 of them are now held in prisons around the country.
The scale was substantial even by Ecuador’s recent standards. More than 300 officers and 20 prosecutors took part, with over 20 properties searched.
Ecuador has lived through its most violent years on record as gangs fight over cocaine routes. President Daniel Noboa’s government has made those gangs its central enemy.
Police did not publish the suspects’ names at this stage. Identifications typically follow the first court hearings.
Factoría: The Blow Against Los Lobos
Factoría targeted Los Lobos in the provinces of Guayas, Manabí and Los Ríos. Raids hit the La Aurora district of Daule, the road to Salitre and the canton of Durán, all in the Guayaquil orbit.
Three of the detainees are alleged leaders of Los Lobos, Dávila said. Police link them directly to Mexico’s Jalisco New Generation Cartel, one of the most powerful crime groups in the Americas.
The gang’s portfolio went well beyond drugs. Police accuse it of extortion, illegal mining, contract killings and trafficking alongside Los Choneros in the cocaine trade.
Los Lobos emerged from a split within Los Choneros and became its bitter rival. Their war has driven much of Ecuador’s prison and street bloodshed in recent years.
Cash, Cocaine and a Fuel Depot for Drug Planes
The searches turned up about US$1 million in cash, packed in a suitcase found in Durán. Five vehicles held roughly a tonne of cocaine that police say was ready for distribution.
The most telling find was on a rural property in Durán. There officers uncovered a fuel stockpile for light aircraft, plus a plane, used to move drugs towards Mexico.
That airstrip detail shows how industrial the trade has become. Ecuador is no longer just a transit corridor for Colombian cocaine but a logistics hub with its own aviation supply chain.
The raids had outside help. The United States Drug Enforcement Administration and the US Southern Command supported the operation, police confirmed.
The American role matters politically as well as operationally. Washington’s terrorist designations let it sanction anyone who finances or aids the gangs.
Jericó: The Los Choneros Marijuana Route
The second operation, Jericó, went after Los Choneros in Guayaquil, Esmeraldas and Manabí. This cell specialised in bringing marijuana across the northern border from Colombia.
The drugs entered through Esmeraldas province and moved south to Guayaquil. There the gang’s network of street dealers handled distribution to consumers.
The investigation behind Jericó ran for a full year. Over that period police tracked about a tonne and a half of marijuana moving along the route.
Both gangs carry the United States’ highest label for crime groups. Washington designated Los Choneros and Los Lobos as foreign terrorist organisations alongside the big cartels.
Los Choneros is the older of the two organisations, with roots in Manabí province. It once ran much of the cocaine traffic leaving Ecuador’s Pacific ports.
The 127 Phantom Banks
The same day brought a warning about where dirty money meets the public. The Superintendency of Banks reported finding 127 unauthorised entities taking deposits in 2025 and 2026.
These phantom outfits posed as banks through social media, websites and rented offices. They offered easy loans and rich investment returns, and the money that went in rarely came back.
Superintendent Roberto Romero said criminal groups were posing as banks outright. One single entity allegedly defrauded its clients of close to US$50 million.
The informal credit circuit around these schemes is vast. Romero estimates it may move more than US$10 billion a year, with some victims paying interest above 1,000 percent annually.
The detection curve is steepening. The supervisor’s list grew from 19 entities in May to 61 in July and now 127, and it is updated periodically online.
Victims span every income level, officials say. Retirees chasing yields and market vendors chasing loans have both lost money to the schemes.
Ecuador is fully dollarised, which makes deposit scams feel deceptively normal. Promised returns far above bank rates are the classic warning sign.
What It Means and What to Watch
For foreigners living in Ecuador, the practical lesson is simple. Check any financial company against the Superintendency’s official registry before handing over a dollar.
The wider financial picture shows strain. Suspicious transaction reports rose 86.79 percent between 2022 and 2026, covering US$1.2 billion to US$1.6 billion last year alone.
More than 23,000 entities, from notaries to law firms, must report suspicious movements. About 70 percent of the alerts come from the financial sector itself.
The raids also fit a security offensive that keeps widening. Congress this week passed a law letting the military support police without a state of emergency, and a tougher anti-gang bill is moving.
The real test comes in court, where Ecuador’s prosecutors have a mixed record. Only 14 of the 43 suspects are behind bars, and big raids have faded into weak cases before.
For investors, the supervisor’s transparency is itself a signal. Publishing the phantom-entity list regularly gives the market a defence it did not have before.
Frequently Asked Questions
Who was arrested in Ecuador on 26 August 2026?
Police arrested 43 alleged members of the Los Choneros and Los Lobos drug gangs in operations Jericó and Factoría across four provinces. Officers seized about US$1 million in cash, roughly a tonne of cocaine and a fuel depot for drug planes.
What are the 127 phantom entities in Ecuador?
They are unauthorised companies the Superintendency of Banks caught taking money from the public in 2025 and 2026. They posed as banks or lenders, and one alone allegedly defrauded clients of close to US$50 million.
How can you check if a financial entity is legal in Ecuador?
The Superintendency of Banks keeps an official registry of authorised institutions on its website. If a company does not appear there, handing it money risks total loss with little chance of recovery.
Connected Coverage
We covered the new security law on 26 August in Ecuador Approves Law Letting Military Aid Police Without Emergency, and the anti-gang legislation in Ecuador Gang Law Bill Would Jail Criminal Group Members Up to 22 Years.
Sources: Primicias (Quito), 26 and 27 August 2026; Ecuavisa; El Telégrafo; Ecuadorian National Police statements; Superintendency of Banks; The Rio Times archive.
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