Mexican drug cartel money laundering trial begins in Texas

Reuters News
Posted: Apr 15, 2013 4:57 PM

By Jim Forsyth

(Reuters) - The jury trial of a Mexican drug cartel leader that began on Monday in Austin, Texas, will provide a look at how the vicious gangs that make huge profits in drug and human smuggling go about laundering their illegal profits in the United States.

Jose Trevino Morales is charged with multiple counts of money laundering for his role in Los Zetas, a ruthless gang blamed for much of the brutal violence which has marred Mexico over the past several years.

According to documents in the case in District Court for the Western District of Texas, Attorney Robert Pitman seeks forfeiture of $60 million in assets from Trevino Morales and his two brothers, who allegedly ran a money laundering operation that stretched from Chicago to Venezuela.

"The testimony might lead us to an understanding of an organization that has been very successful at managing its operations," said Guadalupe Correa-Cabrera, an expert on Mexican criminal gangs at the University of Texas at Brownsville.

"We don't know anything about the Zetas' operations, and this will allow us to learn more about their operations," she added.

Miguel and Omar Trevino Morales, alleged gang leaders and the brothers of Trevino Morales, are also named as defendants in the case.

The pair are believed to be leaders of Los Zetas, a Nuevo Laredo-based cartel that was formed by a group of Mexican Army deserters and is named for the Spanish word for the letter "Z."

The two brothers remain among Mexico's most wanted fugitives. The arrest of Jose Trevino Morales in July 2012 prompted the U.S. embassy in Mexico City to issue a statement warning of potential retaliation and anti-American violence.'

Trevino Morales' lawyer was not available to comment about the case.

Trevino Morales, his brothers and 12 other defendants are accused of using "front" businesses in Texas, Oklahoma, New Mexico, and elsewhere to launder the drug gang's immense profits.

Trevino Morales and the other defendants are accused of setting up "Tremor," a horse breeding operation. Prosecutors claim the defendants purchased a horse ranch in Oklahoma, bought several hundred horses, and managed to win several substantial races, including the All American Futurity, the major competition on the quarter horse circuit.

The Zetas' money was stashed in race horses, some of which were given not so subtle names like "Big Daddy Cartel" and "Morning Cartel," according to court documents.

An FBI affidavit claims that at one point, Los Zetas was funneling $1 million a month into the horse operation.

Correa-Cabrera said the case will not provide much insight into the actual operations of the cartel in Mexico, because Trevino Morales and the co-defendants had a "limited" role in that part of the business.

She does believe, however, information learned during the case will be invaluable to prosecutors in both the United States and Mexico who are trying to dismantle the Zetas empire.

"We will know more about how they launder the money in the United States, we are going to know about the connection with some politicians maybe as well," Correa-Cabrera said.

Statements from several major American financial institutions, including Bank of America, J.P. Morgan Chase and Wells Fargo, are listed on court documents as potential evidence in the case, but prosecutors stress that the banks are cooperating and are not suspected of any wrongdoing.

Trevino-Morales' wife and daughter have pleaded guilty in the scheme. The race horses purchases by Tremor were seized by the government and many of them have been sold.

(Editing by Brendan O'Brien and Leslie Adler)