Feds bust Los Zeta money washers in U.S.

Mexican drug cartel cleans its cash while racing the ponies in four states

*Criminal Indictment unsealed; see link below*

U.S. federal agents yesterday raided a ranch in Oklahoma and properties in three others states which they say were being used by Mexican nationals to launder profits for the Los Zetas (the "Zs") drug cartel, one of Mexico's most powerful and most feared criminal organizations.

The story was broken by the New York Times in its Tuesday’s (June 12) edition, and was widely reported today in Spanish by the Mexican press.

A shell corporation controlled by the Mexicans, Tremor Enterprises, is headquartered in Ruidoso, New Mexico. Tremor’s purported business is the breeding and raising of quarter horses destined for the racetrack. But the Justice Dept. says that it was a mere front for a massive money laundering operation run by Mexico's feared Los Zetas.

Hundreds of F.B.I. agents, backed by helicopters and aerial surveillance, simultaneously executed search and arrest warrants at the properties early yesterday. At the Oklahoma ranch they arrested José Treviño Morales, 45, who was in charge of Tremor. José Morales is the brother of Miguel Ángel Treviño Morales, who is alleged to be the number two man in the Zetas chain of command. The latter Morales, also known as Z-40, is presumed to be in Mexico, but his whereabouts are unknown. José Morales is a “green card” holder, with lawful permanent residency in the United States.

The federal investigation of Tremor began in September 2010. The Times said that it became aware of Tremor’s existence in December 2011, when it was investigating and reporting on other Los Zetas activities. It learned of the pending raid about a month ago, but agreed to withhold its story until the operation had been completed.

Mexican federal prosecutors said yesterday that they know nothing about José Treviño Morales. He has no criminal record in Mexico. Since there are no charges pending against him in this country, prosecutors here said they do not intend to seek extradition. There are outstanding Mexican warrants for his brother Miguel Morales, who is said to be notorious for his brutality in dealing with rival drug traffickers.

Tremor Enterprises enabled the Morales brothers and Los Zetas to launder millions of dollars of illicit drug profits annually, federal authorities said, by converting them into pricey real estate, horses, vehicles and everything else needed for what at first appeared to be a legitimate, large scale ranch and horse breeding operation. But the brothers shared much more than a desire to wash dirty money. Both are said to be horse racing aficionados, who quickly became addicted to winning. Tremor drew the attention of federal authorities in January 2010 when it purchased two mares in a single day for more than a million dollars. The company allegedly budgeted up to a million dollars a month to purchase new racing stock. News sources report that in just three years, Tremor horses earned $2.5 million in prize money.

During yesterday’s raid, agents also arrested José Morales’s wife, as well as five family members and employees of Tremor. Warrants for seven others remain outstanding, including Z-40 Miguel Morales, and another brother, Omar. All are being held without bail pending detention hearings, which will be conducted by U.S. magistrates at a later date.

The arrest and search warrants were based upon a sealed grand jury indictment returned in the U.S. District Court for the Western District of Texas on May 30. The indictment was unsealed and announced by the U.S. Attorney after the seven Mexicans were taken into custody. The grand jury alleged that the money laundering conspiracy commenced no later than 2008, and involved the use of an intricate chain of dozens of shell companies to acquire and hold title to real estate and horses.

Under American criminal statutes, all real estate, personal property and cash belonging to Tremor and the Morales family are subject to 100% forfeiture to the federal government. Besides the Oklahoma ranch, the corporation has racetracks or properties in California, New Mexico and Texas. F.B.I. agents yesterday seized a reported 70 prize race horses, and filed an application with the federal court to seize the ranch. The government filed a request for a cash judgment of $20 million against Tremor and Morales family members, allegedly representing their approximate profit from money laundering and other crimes.

As a result of yesterday's events, the U.S. State Dept. issued an alert for Americans throughout Mexico, warning of the possibility of "retaliation and/or anti-American violence." U.S. State Dept. issues Mexico-wide alert, warning of "anti-American violence." Although it was at least the fourth warning for U.S. nationals in Mexico this year, the alert was unusual in that it explicitly applied to persons anywhere in the country, rather than in just those regions accustomed to narco violence.

Mexican Marines arrest top financial aid to Z-40: http://mexicogulfreporter.blogspot.mx/2012/06/mexican-marines-arrest-z-40-2-zeta.html.
Treviño Morales Indictment Unsealed: http://mexicogulfreporter.blogspot.mx/2012/06/trevino-morales-indictment-unsealed.html.
Z-44, third in command of Los Zetas, arrested: http://mexicogulfreporter.blogspot.mx/2012/01/top-zeta-leader-arrested-linked-to-50.html.