June 13, 2012 in Nation/World

Feds allege cartels use horses to launder cash

Operation worked in plain sight, won a few known races
Tim Talley And Associated Press
 

Jose Trevino Morales
(Full-size photo)

Key figure indicted

Among those named in Tuesday’s indictment was Miguel Angel Trevino Morales, a key figure in the Zetas drug operation. The Zetas are one of Mexico’s two most powerful drug cartels, with a reputation for being ruthless and willing to commit atrocities. The cartel was blamed for the 2010 massacre of 72 Central American migrants in the border state of Tamaulipas, the dumping of 49 mutilated bodies on a Texas-bound highway in the state of Nuevo Leon, and a series of smaller group killings. The cartel is also accused of funneling millions of dollars to politicians and law-enforcement officials in Tamaulipas in a case under investigation by U.S. authorities.

OKLAHOMA CITY – Federal agents raided a sprawling ranch in Oklahoma and a prominent quarter horse track in New Mexico on Tuesday, alleging the brother of a high-ranking official in a Mexican drug cartel used a horse-breeding operation to launder money.

An indictment unsealed Tuesday accused Miguel Angel Trevino Morales, a key figure in the Zetas drug operation, of setting up a horse operation that a younger brother operated from a ranch near Lexington, Okla., south of Oklahoma City. Millions of dollars went through the operation, which bought, trained, bred and raced quarter horses throughout the southwest United States, including the famed Ruidoso Downs track in New Mexico.

“This case is a prime example of the ability of Mexican drug cartels to establish footholds in legitimate U.S. industries and highlights the serious threat money laundering causes to our financial system,” said Richard Weber, the chief of the IRS’ criminal investigation unit.

Seven of the 14 people indicted were arrested, including Jose Trevino Morales and his wife, Zulema. Another Trevino brother was also charged.

The indictment describes how the Trevino brothers and a network quietly arranged to purchase quarter horses with drug money at auction and disguise the source of the funds used to buy them so that the Zetas’ involvement would be masked. They would often pay in cash, or use fake names, which helped keep the owners and the money a secret.

Since 2008, the operation racked up millions of dollars in transactions in California, New Mexico, Oklahoma and Texas, prosecutors said.

The operation, Tremor Enterprises LLC, started small, but worked in plain sight. Some horses carried names with drug references, like Coronita Cartel. Over time, the horses and the operation earned a place on some of the most elite stages in the industry. One horse named Mr. Piloto won a $1 million prize at Ruidoso Downs on Labor Day 2010, going off at odds of 22-1. Another named Tempting Dash won the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas.

The New York Times first reported the raids and the alleged connection to the Zetas cartel on its website earlier Tuesday, citing a months-long investigation and several anonymous sources.

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