Horse track money laundering trial begins in Texas

Farm Forum

AUSTIN, Texas (AP) – A multimillion-dollar horse racing and breeding operation run from an Oklahoma ranch was actually a front for a notorious Mexican cartel to launder millions of dollars in drug money, prosecutors alleged at the beginning of a trial for five defendants charged in the scheme.

Jose Trevino Morales, the younger brother of the suspected leader of the Zetas drug cartel, is charged with money laundering conspiracy. His trial along with four co-defendants facing the same charge began on April 16 in Austin, Texas.

Prosecutor Douglas Gardner told jurors that Trevino had been put in charge of the scheme by his brothers, who are alleged to be at the top of one of the biggest, most versatile and violent criminal organizations in the world. The scheme went through $16 million in horse-related expenses in 30 months, Gardner said.

Gardner painted a picture of a conspiracy in which horse owners, trainers and others crafted bank deposits to hide the true source of the operation’s funding. He said they created companies that bought horses with the cartel’s money and even fixed the outcome of horse races.

”The Zetas make money by drugs, extortion, bribery and send the money to the U.S. to buy racehorses,” he said.

Gardner alleged Trevino, 46, ran the operation for his brothers – Miguel Angel Trevino Morales and Oscar Omar Trevino Morales. He alleged a Mexican businessman, Francisco Antonio Colorado Cessa, bought horses for the Zetas through his oil services company, which authorities say was also a front for the drug cartel.

The three other defendants on trial- Fernando Solis Garcia, Eusevio Maldonado Huitron and his older brother Jesus Maldonado Huitron – are accused of buying horses for the cartel or laundering money through personal accounts.

But David Finn, Morales’ attorney, called his client a ”legitimate horseman” who is being targeted by prosecutors due to his brothers’ alleged crimes.

”This isn’t some front,” Finn said. ”It’s a legitimate, real business… built on the sweat of my client and his wife.”

Mario Cuellar, a government witness and former Zetas member, said he was responsible for funneling drug money from Mexico into the United States for buying horses. He described Miguel Angel Trevino Morales as an active participant who kept a listing of the horses’ names and prices on his cellphone. Jose Trevino Morales initially didn’t want to get involved but eventually did in 2009 when he purchased a horse called ”Tempting Dash,” said Cuellar, who is serving a lengthy prison sentence on a drug charge.

Cuellar said Cessa would buy the horses in his name, then travel to Mexico to be reimbursed. Cessa, who owned a company in Mexico, and other horse buyers were often chosen because they had legitimate ways to come up with the money, Cuellar said.

”Horses were bought through people who could not be questioned about where the money came from, people who had big businesses,” Cuellar said in Spanish through an interpreter.

Mike DeGeurin, Colorado’s attorney, said his client’s company in Mexico, ADT Petroservicios, has no ties to the Zetas. DeGeurin said Cessa invested some of his money in buying and breeding horses and that his client also runs a horse ranch in Mexico for use by autistic children.

Attorneys for Solis and Eusevio Maldonado Huitron told jurors their clients were hard-working, honest horse trainers and that there is no evidence they knew the horses they bought or trained allegedly belonged to the drug cartel. Jesus Maldonado Huitron’s attorney said he would make his opening statement after the prosecution’s case.

The first witness for prosecutors was Jose Garza, a former Texas state trooper and intelligence analyst with the FBI, who gave jurors a history lesson of the Zetas and how they operate.

The trial was expected to last several weeks.

Morales’ wife and daughter have pleaded guilty to lesser charges.

The horse operation Morales ran from a sprawling ranch near Lexington, Okla., spent millions of dollars buying horses in California, New Mexico and Texas, prosecutors said.

Workers at the Ruidoso Downs Race Track and Casino in New Mexico said his stables were known as the ”Zetas’ stables,” and some of his horses were named Number One Cartel and Mr. Ease Cartel.

Miguel Angel Trevino Morales, one of Jose’s brothers, is believed to now be the leader of the Zetas cartel, which split off from the Gulf Cartel in 2010 and is known for its brutality – beheading rivals and staging mass killings.

Miguel Angel Trevino Morales and Oscar Omar Trevino Morales are also charged in the scheme, though they remain at large.