This article describes it fairly succinctly:
Peruvian Police: Gang Killed People for Their Fat
Peruvian police says gang killed people for their fat,allegedly for use in cosmetics
By ANDREW WHALEN Associated Press Writer
LIMA, Peru November 20, 2009 (AP)
Police say a gang in the Peruvian jungle has been killing people and draining fat from the corpses to sell on the black market for use in cosmetics, although medical experts say they doubt a major market for fat exists.
Three suspects confessed to killing five people, but the gang may have been involved in dozens more, said Col. Jorge Mejia, chief of Peru's anti-kidnapping police. He said one suspect claimed the gang wasn't the only one doing such killings.
Mejia said two of the suspects were arrested carrying bottles of liquid human fat and told police it was worth $60,000 a gallon ($15,000 a liter). The fat was sold to intermediaries in Peru's capital, Lima, and police suspect it was then sold to cosmetic companies in Europe, Mejia said Thursday, but he could not confirm any sales.