Drug cartel tied to horse racing

Agents said a quarter horse operation was used to launder millions in cash from Mexico.

Posted: June 13, 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 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 alleges the Trevino brothers and a network quietly arranged to purchase quarter horses with drug money at auction and disguised the source of the funds used to buy them so that the Zetas' involvement would be masked.

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

The operation, Tremor Enterprises L.L.C., 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, Mr. Piloto, won a $1 million prize at Ruidoso Downs in 2010.

The Zetas are one of Mexico's two most powerful drug cartels, with a reputation for being ruthless. 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.

During the raids Tuesday, dozens of federal agents swarmed the New Mexico racetrack. At least two horses were taken away. Shaun Hubbard, general manager of the Ruidoso Downs, said track officials knew little about the raid but were cooperating with authorities.

Seizure warrants were issued for 41 horses deemed the operation's most valuable, to prevent their being taken to Mexico. Among those was Mr. Piloto. The government sought an order to ensure the care of 384 other horses at the ranch.

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