The bird was present when police conducted an undercover raid in Barranquilla early on Wednesday.
"This parrot was sending out alerts," The Telegraph
quoted police officer Hollman Oliveira, as saying. "You could say he was some sort of watch bird."
Demonstrating his talents after his capture, Lorenzo spent much of the morning repeating Spanish words which translated as: "Run! Run! Youâ€™re going to get caught!"
Despite warnings from the bird, two men were arrested by police.
Officers also seized more than two-hundred weapons, a stolen motorcycle, a large quantity of marijuana, and two other birds.
Lorenzo has been handed over to environmental authorities, who claim he is one of about 1700 parrots seized after being trained to act as lookouts for drug traffickers.