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Drug cartel accused of laundering money through horse racing

June 12, 2012|By Richard A. Serrano
  • Grafitti reading "Z 100%" -- refering to the Mexican criminal gang Los Zetas -- was left behind along with 49 mutilated bodies on a highway in the state of Monterrey in northern Mexico.
Grafitti reading "Z 100%" -- refering to the Mexican criminal… (Miguel Sierra / European…)

WASHINGTON — The unlikeliest of marriages — the most violent Mexican drug cartel and the world of U.S. quarter horse racing — ended with the arrest Tuesday of one of the top men in the Los Zetas drug trafficking ring after U.S. officials began suspecting an uncanny run of good fortune at the track and the laundering of millions of dollars in drug proceeds.

Arrested were Jose Trevino Morales, his wife, and five associates. They were taken into U.S. custody after scores of FBI agents in all-terrain vehicles and helicopters raided horse stables and ranches near Ruidoso, N.M., and Lexington, Okla.

Working on a tip from more than two years ago, law enforcement officials learned that the Zetas were laundering up to $1 million a month through the quarter horse industry. In federal charges unsealed in Texas, Trevino and the others were indicted for laundering drug profits by “purchasing, training, breeding and racing American quarter horses.”

The two-state takedown, coming as cartel violence has spread across northern Mexico and, U.S. officials worry, is creeping over the border, marks the first time that a cartel has taken such a brazen step in not only secreting its funds in a U.S. enterprise, but more uniquely, investing in one of this country’s most storied traditions.

Robert Pitman, the U.S. attorney in West Texas, said the case showed “the corrupting influence of Mexican drug cartels within the United States, facilitated by the enormous profits generated by the illicit drug trade.”

Richard Weber, chief of the IRS Criminal Investigation unit, called it a “prime example of the ability of Mexican drug cartels to establish footholds in legitimate U.S. industries.”

While Trevino and other alleged Zetas leaders were fielding winners at the track — with many of their horses named after the cartel itself — their organization was carrying out some of the most violent murders in Mexico. Just last month the dismembered bodies of 49 people were discovered in bags there, and authorities saw it as the work of Trevino’s brother, Miguel Angel Trevino, the No. 2 leader of the Zetas and the world’s most wanted narcotics smuggler. He also was indicted in the alleged horse-racing scheme.

James Phelps, a Southwest border expert and assistant professor at Angelo State University in San Angelo, Texas, said a cartel and horse racing would seem a perfect match to hide funds.

“When you have hundreds of billions a year in your industry and you can’t ship the bulk of the cash back, it has to go somewhere,” he said. “They are buying huge ranches in locations across the Southwest and mountain states. It’s just a very viable way to launder the cash.”

ALSO:

Mexico drug war displaces families in Sinaloa highlands

Deaths in Arizona could signal spread of drug cartel violence

Sinaloa cartel, Zetas push Mexico's drug violence to new depths

richard.serrano@latimes.com

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