Cartel using horse racing to launder money?

Belmont Stakes hopeful Paynter gets a bath after training at Belmont Park in Elmont, N.Y.

Belmont Stakes hopeful Paynter gets a bath after training at Belmont Park in Elmont, N.Y.

Published Jun 13, 2012

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Mcallen - US authorities said they arrested seven members of one of Mexico's largest drug cartels on Tuesday and accused them of laundering money in the United States by buying, breeding and racing American racehorses.

The case points to the increasing corrupting influence in the United States of the billion-dollar illegal drug trade across the border in Mexico, a US official said.

The leader of Mexico's brutal Zetas drug cartel, Miguel Angel Trevino Morales, and 13 others, including his brothers, used false businesses to conceal the true owners of the horses, according to charges in an indictment unsealed in US District Court in Austin on Tuesday.

Federal authorities arrested seven of the 14 defendants in California, New Mexico, Texas and Oklahoma. They include one of the drug lord's brothers, Jose Trevino Morales and his wife, Zulema Trevino, the Justice Department said in a statement.

Miguel Angel Trevino Morales, known as “Z-40”, and another brother, Oscar Omar Trevino Morales, known as “Z-42”, are believed to be at large in Mexico, authorities said.

The Zetas have fought their way to become one of Mexico's two largest drug cartels and have thousands of members across Mexico and into Central America, a vast trafficking network with a stronghold in Nuevo Laredo, across the Rio Grande from Texas.

Its key business is smuggling cocaine, heroin, marijuana and crystal meth into the United States, but the cartel is also involved in extortion, kidnapping, oil theft and other crimes.

Court papers said the Zetas poured millions of dollars in proceeds from drug trafficking into the purchase, training and racing of American quarter horses in New Mexico, Oklahoma, California and Texas since 2008. Quarter horses are a special breed trained to sprint short distances.

“The allegations in this indictment, if proven, would document yet another example of the corrupting influence of Mexican drug cartels within the United States, facilitated by the enormous profits generated by the illicit drug trade,” said US Attorney Robert Pitman, who leads the Western District of Texas.

US authorities have moved to seize $20 million in property and horse racing equipment allegedly purchased though the money laundering scheme, including several of the quarter horses that won races in the United States, the indictment states.

“This case is a prime example of the ability of Mexican drug cartels to establish footholds in legitimate US industries and highlights the serious threat money laundering causes to our financial system,” said Richard Weber, chief of the Internal Revenue Service criminal investigation division.

If convicted, each defendant faces up to 20 years in federal prison. The seven arrested people remained in federal custody Tuesday afternoon. Court records listed no defence lawyers retained in the case.

The US Embassy in Mexico on Tuesday warned Americans in Mexico to remain alert for possible retaliation or anti-American violence. - Reuters

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