In the stables at a prominent Quarter Horse racetrack in New Mexico, workers quietly nicknamed Jose Trevino Morales's stables as the "Zetas' stables" and say they often saw people show up with bags of cash to buy the horses.
On June 12 authorities raided those stables and a horse ranch in Oklahoma accusing Trevino and others of running a sophisticated money-laundering operation connected to one of Mexico's most powerful and ruthless drug cartels.
Federal authorities accuse Trevino's older brother, Miguel Angel Trevino Morales, a key figure in the Zetas drug operation, of setting up the horse operation that the younger brother ran from the sprawling 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 at Ruidoso Downs in New Mexico.
Jose Trevino, his wife and five others were arrested and charged with one count each of money laundering. Seven others, including another Trevino brother, were charged but remain at large. They could face up to 20 years in prison if convicted.
"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.
The indictment, unsealed June 12, 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 California, New Mexico, Oklahoma, and Texas, prosecutors said. The New York Times first reported the raids and the alleged connection to the Zetas cartel, citing a months-long investigation and several anonymous sources.
The operation, Tremor Enterprises LLC, started small but worked in plain sight. Some horses carried names with drug references, like Number One Cartel and 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 race at Ruidoso Downs on Labor Day 2010, going off at odds of 22-1. His trainer, Felipe Quintero, 28, was one of the seven arrested.
The Zetas are one of Mexico's most powerful drug cartels, with a reputation for being willing to commit atrocities including kidnapping, decapitating and dismembering enemies. The elder Trevino is the second-in-command and one of the U.S. and Mexican governments' most wanted men.