Their names he never knew, but their faces he could never forget. At the end of every month, men using aliases such as "Smelly Feet" and "Grandpa" casually slipped into the backseat of his unlicensed taxi, a rusting 1985 Chevette, to demand their payment.

For years, drivers of pirate cabs in the sprawling slum of Usme, on the southern outskirts of Bogota, had no choice but to pay up. Either that or risk watching extorters set ablaze their cars or hurt their loved ones.

"Whenever I left my house I looked behind my back," said the driver, who spoke on the condition of anonymity due to fear for his safety. Eventually, he mustered the courage to denounce the racket to police who, months later, launched an armed sweep.

"They were so sure of themselves," he said, recalling with fright the terror he lived with. "They never thought they'd be caught."

For many Colombians, the threat of such shakedowns remains.

A U.S.-backed military offensive has crushed leftist rebels and right-wing militias over the last decade, leading to a sharp decline in murder and kidnapping rates that once were among the highest in the world. But the crackdown has spurred less visible forms of violence, none more so than extortion, frequently carried out by gunmen who go freelance when their criminal organizations are broken up.

Protection rackets have become so entrenched that some estimate extortion has ballooned into a $1 billion-a-year industry, according to an investigation by the newspaper El Tiempo. In Medellin, Colombia's second-largest city, the chamber of commerce estimates 90 percent of small businesses are victims, paying anywhere from $60 to $100 a week to criminal gangs that terrorize entire business districts.

From the shantytowns of Rio de Janeiro to the cities of northern Mexico, Latin America is fertile ground for extortion thanks to corrupt police forces, drug cartels and a climate of lawlessness.

It's especially pervasive in Colombia where, guerrilla and paramilitary groups for decades funded their insurgency by charging "vaccines," a sort of war tax, on ranchers and multinational companies in rural areas where state authority is absent. Just last week, prosecutors announced they were investigating an Italian firm Sicim for allegedly paying millions to rebels of the National Liberation Army to prevent attacks against an oil pipeline it's building in the volatile northeastern border area of Colombia.

But as the country's 50-year-old civil conflict winds down, extortion increasingly is becoming an urban phenomenon affecting small businesses.

The government has launched a costly public-service campaign, "Don't pay, denounce," which is credited with a six-fold increase in reports of extortion since 2008, reaching nearly 4,900 last year. But officials believe the vast majority of cases still go unreported.

"Business owners are afraid to speak out because criminals don't retaliate with words, they do it with a bullet," said Guillermo Botero, head of FENALCO, the national chamber of commerce.

No target is too small. Colombian media are full of stories of gangs targeting street vendors hawking t-shirts or pirated DVDs and even pedestrians cornered while walking through makeshift roadblocks.

In Usme, some 30 unlicensed cabbies eke out a living shuttling residents up steep dirt roads where buses and regular taxis won't venture. For years, the drivers each were forced to fork over around $200 a month, about half their earnings, to appease the extortionists. The demands were underscored in the form of a pistol whip to the head or a menacing stare.

The criminal ring was dismantled last year after the desperate cabbie secretly went to Colombia's elite Gaula police unit. An undercover agent was dispatched. Armed with little more than a camera hidden in a stuffed monkey hanging from the rearview mirror, the agent spent four months filming the extorters as they'd board his vehicle demanding their cut.

Eventually seven people were arrested in a coordinated sting, including the gang's boss, Andres Caballero, a member of the local community council. The gang allegedly pocketed about $9,000 per month. Its members currently are on trial and, if convicted, face at least eight years in jail due to recently toughened sentencing guidelines.

Authorities are proud of the case because it spotlights how effective they can be in tracking down criminals when the wall of silence is broken. Gaula's top officer, Col. Fabio Lopez, said 90 percent of cases brought forward by victims lead to convictions.

"The best way to combat extortion is by denouncing it," he said.

But many Colombians say police often are in on the take. And the authorities who risk their lives fighting the criminals are easily disheartened.

Sergio Rodriguez is the prosecutor in the pirated taxi case. Last year, the organized crime unit he belongs to arrested nearly 1,000 individuals on charges of extortion. But even he acknowledges successful cases like his are a drop in the bucket compared to the size of the problem Colombia faces.

His tiny office, in the heavily secured gray bunker housing the nation's top prosecutors, is littered with piles of court filings.

"The business keeps going," he said, looking out from the stacks. "Unfortunately, extortion is a scourge that has become a way of life for too many people."


AP writer Cesar Garcia contributed to this report.

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