Feds: Horse operation was a front for cartel cash
June 12, 2012
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.
Prosecutors asked that no bond be set for Trevino fearing he would either flee or intimidate witnesses. He declined to comment at the courthouse.
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 New Mexico, Oklahoma, California 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; another named Tempting Dash won the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas.
The New York Times (http://nyti.ms/KqFFiY) 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.
The Zetas are one of Mexico's two most powerful drug cartels, with a reputation for being its most ruthless and willing to commit atrocities. The cartel was blamed for the 2010 massacre of 72 Central American migrants in the Texas 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 currently under investigation by federal authorities in the U.S.
During the raids Tuesday, dozens of federal agents swarmed the New Mexico race track, wearing bulletproof vests and collecting evidence. At least two horses were taken away. The federal government seeks the seizure of several horses, claiming they were used to further a crime. Among those sought was Mr. Piloto.
A raid also was conducted at the ranch about 40 miles south of Oklahoma City. At least a half-dozen agents wearing fatigues and baseball caps emblazoned with FBI were still at the ranch early in the afternoon.
The director of the Oklahoma Quarter Horse Racing Association said Jose Trevino showed up a few years ago and quickly earned a reputation for always paying his bills and shelling out handsome prices for some of the top horses in the country.
"They were also recognized for taking care of their business. They paid their bills and didn't cause any trouble. You didn't have a food vendor or veterinarian calling to say they couldn't get these guys to pay their bills. They were good citizens in the horse industry," Debbie Schauf said.
She said it was common for buyers based out of the country to pay cash for horses, but that several transactions were noteworthy for their value.
"It didn't raise a lot of eyebrows when these guys came to the sales and started paying cash. What raised eyebrows was the quality of the horses they were buying and the amount of money these mares cost," Schauf said.
Shaun Hubbard, general manager of the Ruidoso Downs Race Track and Casino, said the track officials know little about the raid but they are cooperating with federal authorities.
Telephone messages left Tuesday at the ranch in Lexington were not immediately returned.