“Exclusive: IRS manual detailed DEA’s use of hidden intel evidence”

August 8, 2013

Reuters on August 7, 2013 released the following:

By John Shiffman and David Ingram

“(Reuters) – Details of a U.S. Drug Enforcement Administration program that feeds tips to federal agents and then instructs them to alter the investigative trail were published in a manual used by agents of the Internal Revenue Service for two years.

The practice of recreating the investigative trail, highly criticized by former prosecutors and defense lawyers after Reuters reported it this week, is now under review by the Justice Department. Two high-profile Republicans have also raised questions about the procedure.

A 350-word entry in the Internal Revenue Manual instructed agents of the U.S. tax agency to omit any reference to tips supplied by the DEA’s Special Operations Division, especially from affidavits, court proceedings or investigative files. The entry was published and posted online in 2005 and 2006, and was removed in early 2007. The IRS is among two dozen arms of the government working with the Special Operations Division, including the Federal Bureau of Investigation, the National Security Agency and the Central Intelligence Agency.

An IRS spokesman had no comment on the entry or on why it was removed from the manual. Reuters recovered the previous editions from the archives of the Westlaw legal database, which is owned by Thomson Reuters Corp, the parent of this news agency.

As Reuters reported Monday, the Special Operations Division of the DEA funnels information from overseas NSA intercepts, domestic wiretaps, informants and a large DEA database of telephone records to authorities nationwide to help them launch criminal investigations of Americans. The DEA phone database is distinct from a NSA database disclosed by former NSA contractor Edward Snowden.

Monday’s Reuters report cited internal government documents that show that law enforcement agents have been trained to conceal how such investigations truly begin – to “recreate” the investigative trail to effectively cover up the original source of the information.

DEA officials said the practice is legal and has been in near-daily use since the 1990s. They have said that its purpose is to protect sources and methods, not to withhold evidence.

NEW DETAIL

Defense attorneys and some former judges and prosecutors say that systematically hiding potential evidence from defendants violates the U.S. Constitution. According to documents and interviews, agents use a procedure they call “parallel construction” to recreate the investigative trail, stating in affidavits or in court, for example, that an investigation began with a traffic infraction rather than an SOD tip.

The IRS document offers further detail on the parallel construction program.

“Special Operations Division has the ability to collect, collate, analyze, evaluate, and disseminate information and intelligence derived from worldwide multi-agency sources, including classified projects,” the IRS document says. “SOD converts extremely sensitive information into usable leads and tips which are then passed to the field offices for real-time enforcement activity against major international drug trafficking organizations.”

The 2005 IRS document focuses on SOD tips that are classified and notes that the Justice Department “closely guards the information provided by SOD with strict oversight.” While the IRS document says that SOD information may only be used for drug investigations, DEA officials said the SOD role has recently expanded to organized crime and money laundering.

According to the document, IRS agents are directed to use the tips to find new, “independent” evidence: “Usable information regarding these leads must be developed from such independent sources as investigative files, subscriber and toll requests, physical surveillance, wire intercepts, and confidential source information. Information obtained from SOD in response to a search or query request cannot be used directly in any investigation (i.e. cannot be used in affidavits, court proceedings or maintained in investigative files).”

The IRS document makes no reference to SOD’s sources of information, which include a large DEA telephone and Internet database.

CONCERN IN CONGRESS

House Intelligence Committee Chairman Mike Rogers, R-Michigan, expressed concern with the concept of parallel construction as a method to hide the origin of an investigation. His comments came on the Mike Huckabee Show radio program.

“If they’re recreating a trail, that’s wrong and we’re going to have to do something about it,” said Rogers, a former FBI agent. “We’re working with the DEA and intelligence organizations to try to find out exactly what that story is.”

Spokespeople for the DEA and the Department of Justice declined to comment.

Sen. Rand Paul, R-Kentucky, a member of the Homeland Security and Government Affairs Committee, said he was troubled that DEA agents have been “trying to cover up a program that investigates Americans.”

“National security is one of government’s most important functions. So is protecting individual liberty,” Paul said. “If the Constitution still has any sway, a government that is constantly overreaching on security while completely neglecting liberty is in grave violation of our founding doctrine.”

Officials have stressed that the NSA and DEA telephone databases are distinct. The NSA database, disclosed by Snowden, includes data about every telephone call placed inside the United States. An NSA official said that database is not used for domestic criminal law enforcement.

The DEA database, called DICE, consists largely of phone log and Internet data gathered legally by the DEA through subpoenas, arrests and search warrants nationwide. DICE includes about 1 billion records, and they are kept for about a year and then purged, DEA officials said.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


“DEA Makes Three More “Fake Pot” Drugs Temporarily Illegal Today”

May 16, 2013

The U.S. Drug Enforcement Administration (DEA) on May 16, 2013 released the following press release:

“MAY 16 (WASHINGTON) –Today the United States Drug Enforcement Administration (DEA) made the synthetic cannabinoids UR-144, XLR11, and AKB48 Schedule I, illegal drugs under the Controlled Substances Act (CSA) for the next two years. These cannabinoids are often seen in so-called “fake pot” products that are falsely marketed and sold as “herbal incense” or “potpourri” products on the Internet and by a variety of retail stores.

Synthetic cannabinoids refer to a family of substances that act on the brain similar to delta-9 THC, the main psychoactive constituent of cannabis. The actual chemical names of today’s controlled cannabinoids are:

  • (1-pentyl-1H-indol-3-yl)(2,2,3,3-tetramethylcyclopropyl)methanone (UR-144);
  • [1-(5-fluoro-pentyl)-1H- indol-3-yl](2,2,3,3-tetramethylcyclopropyl)methanone (5-fluoro-UR-144, XLR11); and
  • N-(1-adamantyl)-1-pentyl-1H-indazole-3-carboxamide (APINACA, AKB48).

This action is based on a finding by DEA’s Deputy Administrator Thomas Harrigan that the placement of these synthetic cannabinoids into Schedule I of the CSA is necessary to avoid an imminent hazard to the public safety. The DEA published a notice of its intent to do this and issued a press release about it on April 12, giving makers, sellers, and other possessors of these drugs a month to rid themselves of their current stocks and to cease making or buying more.

Over the past three years, smokable herbal blends containing synthetic cannabinoids have been marketed under the guise of being “legal” and have become increasingly popular, particularly among teens and young adults. These products consist of plant material that has been laced with these cannabinoids. These substances have not been approved by the FDA for human consumption or for medical use. The long-term physical and psychological effects of these substances and their associated products are unknown but are potentially severe, and psychotic and violent behavior has been observed in short-term users of these products.

During the next two years, DEA will work with the U.S. Department of Health and Human Services (DHHS) to determine if these chemicals should be made permanently illegal.

Click here for a copy of the Final Order and here for an explanation of the process under the CSA for temporarily and permanently scheduling drugs and chemicals.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


“West Hollywood Doctor Indicted on Federal Charges for Writing Prescriptions for Narcotics after being Ordered to Stop”

May 14, 2013

The Drug Enforcement Administration (DEA) on May 13, 2013 released the following:

“MAY 13 (LOS ANGELES) – A West Hollywood doctor surrendered to federal authorities this morning after being indicted last Friday on federal drug trafficking charges that allege he wrote more than 1,200 prescriptions for powerful painkillers after a federal order revoked his authority to prescribe those drugs.

James William Eisenberg, 72, who resides in the Venice district of Los Angeles, surrendered this morning at the United States Courthouse, where he is expected to be arraigned this afternoon.

Eisenberg is named in an indictment that charges him with four counts of using a revoked DEA registration number and three counts of distribution of hydrocodone, which is the generic drug found in brand-name products such as Vicodin and Norco.

Eisenberg allegedly wrote the prescriptions while he worked out of several medical offices in West Hollywood, including a Santa Monica Boulevard storefront he called Pacific Support Services. Eisenberg also issued “medical marijuana” recommendations from these West Hollywood locations, according to court documents and DEA administrative records.

In order to legally prescribe controlled substances such as hydrocodone, physicians must be registered with the United States Attorney General and have a valid DEA registration number. On December 14, 2011, a DEA administrative judge determined that Eisenberg acted as a “drug dealer” and suspended his registration number. The DEA issued an order permanently revoking Eisenberg’s registration on July 24, 2012.

The orders issued by the administrative judge were based on findings that Eisenberg, who at the time was working out of a “medical marijuana” club in Arizona, “lacked a legitimate medical purpose and acted outside of the usual course of professional practice” when he wrote prescriptions for oxycodone (the generic form of a drug often best known as the brand-name OxyContin) and Xanax in exchange for $150 cash payments. The DEA judge also found that Eisenberg wrote “medical marijuana” recommendations to undercover officers posing as patients, and that Eisenberg prescribed OxyContin to one of the undercover agents “before [Eisenberg] had even performed a physical examination.”

DEA investigators later learned that Eisenberg continued to prescribe controlled substances, including hydrocodone, in violation of the DEA’s orders. A review of a California Department of Justice database that can be used to track prescriptions showed that, following the suspension of Eisenberg’s registration number, patients filled more than 1,700 of his prescriptions for controlled substances, including more than 1,200 prescriptions for hydrocodone. As charged in the indictment, Eisenberg wrote one of those prescriptions on December 27, 2011, less than two weeks after his registration number was suspended.

DEA investigators executed a federal search warrant on one of Eisenberg’s West Hollywood offices on February 19, 2013. The affidavit in support of the search warrant outlines evidence, including surveillance and undercover operations, indicating that Eisenberg continued to write prescriptions for controlled substances in violation of the DEA’s revocation order. The evidence included an operation in which an undercover agent, posing as a patient, obtained a prescription from Eisenberg for hydrocodone and alprazolam (the generic form of a drug best known as Xanax). A receptionist at Eisenberg’s office asked the undercover agent if “he was looking for medical marijuana” as well, according to the search warrant affidavit. According to the affidavit, when a West Hollywood pharmacist refused to fill Eisenberg prescriptions for hydrocodone and alprazolam in June 2012, Eisenberg called the pharmacy and asked the pharmacist to make an “exception” and fill the prescription.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

If convicted of the seven counts in the indictment, Eisenberg faces a statutory maximum sentence of 46 years in federal prison.

The investigation into Eisenberg was conducted by the Drug Enforcement Administration.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Federal prosecutors charge 17 people with allegedly making, selling cocaine in West Tennessee

November 2, 2012

The Republic on November 1, 2012 released the following:

“THE ASSOCIATED PRESS

JACKSON, Tenn. — Seventeen people have been charged with selling cocaine in West Tennessee, federal prosecutors said Thursday.

The 17 drug suspects were arrested Thursday by agents and officers with the Drug Enforcement Administration, the FBI and state and local law enforcement agencies. The suspects were named in a federal indictment that alleges the drug ring made and sold cocaine and crack cocaine in West Tennessee beginning in February.

Undercover law enforcement officers made four purchases of crack cocaine during the investigation, the U.S. attorney’s office said.

If convicted, each suspect faces a minimum sentence of 10 years in prison.

Edward Stanton, the U.S. attorney for West Tennessee, announced the indictment in Jackson.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Plymouth Doctor Indicted on Charges Alleging Illegal Drug Distribution and Medicare Fraud

September 16, 2012

The Federal Bureau of Investigation (FBI) on September 14, 2012 released the following:

“An indictment was unsealed today charging Dr. Mikhayl Soliman, 59, of Plymouth, Michigan, with Medicare fraud and distribution of prescription drugs, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by the Special Agent in Charge Robert Corso, Drug Enforcement Administration, Detroit Division; Special Agent in Charge, Robert D. Foley, III, Federal Bureau of Investigation; Special Agent in Charge Lamont Pugh, Health and Human Services, Office of Inspector General; and Police Chief Jason Wright, City of Wayne, Michigan.

The 10-count indictment charges that between 2007 and 2012, Dr. Soliman billed Medicare for services not rendered and distributed controlled substances outside the course of usual medical practice and for no legitimate purpose. During that time frame, Dr. Soliman billed Medicare for approximately $4,155,565 in claims. The majority of the claims were for physician home visits that were purportedly provided when Dr. Soliman was not present in the home, as required by Medicare. Dr. Soliman is also charged with providing prescriptions for OxyContin, Vicodin, and other pharmaceutical narcotics in exchange for cash payments outside the course of usual medical practice and for no legitimate purpose.

“Medicare is intended to provide health care funds for our most vulnerable citizens,” U.S. Attorney McQuade said. “Doctors and other providers who steal taxpayer money by cheating the Medicare program will be prosecuted.”

Robert Corso, DEA Special Agent in Charge said, “Today’s arrest is another example of DEA’s determination to combat the troubling prescription drug abuse problem in this country. Dr. Soliman abused his position of trust and jeopardized the lives of many individuals by illegally distributing highly addictive opiate painkillers. Today’s arrest of Dr. Soliman makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”

Robert D. Foley, III, FBI Special Agent in Charge said, “These charges represent a serious abuse of the health care system. Those motivated by greed who unlawfully take from a system designed to care for patients, will be tirelessly pursued by the FBI and prosecuted for their crimes.”

“Today’s arrest sends a clear message that the unlawful distribution of controlled substances and the fraudulent billing of Medicare will not be tolerated” said Lamont Pugh III, Special Agent in Charge of the Chicago Region for the U.S. Department of Health and Human Services, Office of Inspector General. “The OIG, working with our federal, state, and local partners, will continue to fight to protect the safety of patients and taxpayer dollars.”

Soliman was arrested today and appeared in federal court this afternoon for his arraignment.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

The case was investigated by special agents of the DEA, FBI, HHS-OIG, and the City of Wayne Police Department. The case is being prosecuted by Special Assistant U.S. Attorney Justin Bidwell.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Mexican Cartel Hides Millions in Horse Races, U.S. Alleges

June 12, 2012

The New York Times on June 12, 2012 released the following:

“By GINGER THOMPSON

Newcomers rarely make it into the winner’s circle at the All American Futurity, considered the Kentucky Derby of quarter horse racing.

Yet in September 2010, a beaming band of men waving Mexican flags and miniature piñatas swept into Ruidoso, N.M., to claim the million-dollar prize with a long-shot colt named Mr. Piloto.

Leading the revelry at the track was Mr. Piloto’s owner, José Treviño Morales, 45, a self-described brick mason who had grown up poor in Mexico. Across the border, Ramiro Villarreal, an affable associate who had helped acquire the winning colt, celebrated at a bar with friends.

As for the man who made the whole day possible, Miguel Ángel Treviño Morales, he was living on the run, one of the most wanted drug traffickers in the world.

Mr. Treviño, a younger brother of José Treviño, is second in command of Mexico’s Zetas drug trafficking organization. Thin with a furrowed brow, he has become the organization’s lead enforcer — infamous for dismembering his victims while they are still alive.

The race was one of many victories for the Treviño brothers, who managed to establish a prominent horse breeding operation, Tremor Enterprises, in the United States that allowed them to launder millions of dollars in drug money, according to current and former federal law enforcement officials. The operation amounted to a foothold in the United States for one of Mexico’s most dangerous criminal networks, the officials said.

Using Miguel Ángel Treviño’s cash, José Treviño’s legal residency and Mr. Villarreal’s eye for a good horse, Tremor bought a sprawling ranch in Oklahoma and an estimated 300 stallions and mares. The Treviño brothers might have kept their operation quiet, given the criminal connection, but their passion for horses and winning apparently proved too tempting. In the short span of three years, Tremor won three of the industry’s biggest races, with prizes totaling some $2.5 million.

The business was “so far out there it’s hard to believe,” said Morris Panner, a former prosecutor who handled drug cases. “Maybe they were using some kind of perverse logic that told them they could hide in plain sight, precisely because people wouldn’t believe it or question it.”

The Justice Department moved against Tremor on Tuesday morning, dispatching several helicopters and hundreds of law enforcement agents to the company’s stables in Ruidoso and its ranch in Oklahoma. Jose Treviño and several associates were taken into custody and were charged later in the day, authorities said.

Miguel Angel Trevino and another brother, Omar, were also charged. The two remain at large in Mexico. Omar Trevino is also a high-ranking member of the Zetas and an F.B.I. affidavit filed in United States district court describes him as participating in the money laundering.

The affidavit said the Zetas funneled about $1 million a month into buying quarter horses in the United States. The authorities were tipped off to Tremor’s activities in January 2010, when the Zetas paid more than $1 million in a single day for two broodmares, the affidavit said.

The New York Times became aware of Tremor’s activities in December 2011 while reporting on the Zetas. The Times learned of the government’s investigation last month and agreed to hold this story until Tuesday morning’s arrests.

The brothers’ activities on either side of the border made for a stark contrast. One week in May began with the authorities pointing fingers at Miguel Ángel Treviño for dumping the bodies of 49 people — without heads, hands or feet — in garbage bags along a busy highway in northern Mexico. The week concluded with José Treviño fielding four Tremor horses in a prestigious race at Los Alamitos Race Course, near Los Angeles.

By then, Mr. Villarreal’s story had come to a fatal, fiery end. Not long after the 2010 victory at Ruidoso, he was detained by the Drug Enforcement Administration and reluctantly agreed to work as an informant. Five months later, his charred remains were found in a burnt-out car on the highway outside Nuevo Laredo.

The buzz around Tremor’s winnings and acquisitions began three years ago, when José Treviño bought an estimated $3 million in quarter horses, including one named Number One Cartel.

Since then he has worked with breeders, trainers and brokers considered pillars of the business. Tremor Enterprises did not always put its name on the horses it owned or the races they ran, presumably to avoid the attention of tax collectors and law enforcement authorities, according to federal agents.

But people inside the financially struggling industry do not need written records to tell them who is doing business with whom. And some of those insiders acknowledged that the subject of José Treviño’s identity, and where he got his money, was treated like so many taboos: people did not ask many questions, either because they did not care, or did not want to know.

“Everyone knows who José Treviño is,” one trainer said. “But all they cared about was whether his checks would clear.”

A Drug Organization Ascends

Made up of rogue members of the Mexican military and police, the Zetas were a protection force for the powerful Gulf Cartel before they set out on their own in 2010. Their ascendancy ignited a spate of massacres and assassinations of elected officials, police chiefs, journalists and others, which turned organized crime from a law enforcement problem to the No. 1 national security threat for Mexico’s fragile democracy.

Miguel Ángel Treviño, known as Zeta-40, or just 40, was never in the military. But he became useful to the Zetas for his experience moving contraband across the border.

Law enforcement authorities said the Zetas have been able to rapidly expand their reach beyond Mexico’s borders with the United States and Guatemala. And while other Mexican drug organizations prefer to keep themselves and their money close to home, the Zetas have established outposts as far as South America and West Africa.

“The Zetas are particularly adroit at spreading their tentacles across borders,” said Michael S. Vigil, a former senior official with the Drug Enforcement Administration. He added that the gang’s extensive intelligence and operational capabilities allow it to take control of new territory so quickly that it is difficult for law enforcement to keep up.

Their primary stronghold is Nuevo Laredo, one of North America’s busiest border-crossings and Mr. Trevino’s hometown.

He had grown up there in a large family with six brothers, including José, and six sisters, American authorities said. Like most local residents, the Treviño family treated the border as a kind of imaginary line.

Law enforcement authorities knowledgeable about the family said the siblings learned the tricks of moving easily between the United States and Mexico, using temporary visas and border-crossing cards to start families, buy properties and do business in both countries.

Court records lay out the nature of the brothers’ turn to crime, which dates back at least two decades. In 1995, an older brother, Juan Francisco Treviño, was sentenced on charges of conspiring to smuggle hundreds of pounds of marijuana into the United States.

On the witness stand, Juan Francisco described himself as a struggling entrepreneur who had tried to make a go of a small construction company, Treviño Masonry, but later went into trucking.

Prosecutors argued that those businesses were fronts for the Treviños’ smuggling activities, citing a raft of lapsed business licenses, false identification documents and suspicious wire transfers.

The defendant was sentenced to 22 years in prison, and remains incarcerated. José and Miguel Ángel Treviño were implicated in the case, but were never prosecuted for lack of evidence, said authorities involved in the investigation.

It is unclear whether the two brothers parted ways at that point or continued collaborating. Miguel Ángel Treviño’s rise through the ranks of the Zetas is well known. Jere Miles, an expert on the Zetas at the Department of Homeland Security, said that among the Mexican underworld, Mr. Treviño had gained the notoriety of a cult figure, one who has escaped unscathed from several gun battles against the law, makes deals with no one and seems unafraid to die. Dismembered bodies, dumped by the dozens, have become his calling card.

He also manages the organization’s money, according to George Grayson, a professor at the College of William and Mary who has written a book about the Zetas.

The trail of public information on José Treviño goes cold until 2009, when he began buying expensive racehorses.

“From all appearances, he looked like anyone else interested in quarter horses,” said one person in the industry who knows José Treviño. “But he had a massive amount of money, with no good explanation where it came from. And he had a family name that made a lot of people wonder.”

New Player at the Track

As much as Tremor was a money-laundering operation, the Treviño brothers’ quarter horse venture allowed them to mix business with pleasure. Horses have long been considered a status symbol in Latin America and drug traffickers have been among the region’s most avid collectors.

Law enforcement officials said quarter horse racing was one of Miguel Ángel Treviño’s favorite pastimes, and even while living on the run, he has managed to keep control of several ranches and racetracks in Mexico and Guatemala where he holds match races, known as parejeras.

But Mexican horse racing — like so much else in that country — has been battered by the violence of the drug war. Many Mexican breeders have moved their operations to the United States, where they could buy horses with better bloodlines and compete for bigger prizes, without fearing for their lives.

“Much of the growth in American quarter horse racing is due to those guys,” said one industry expert, referring to the influx of breeders and buyers from Mexico. “They have spent a lot of money. And it’s made a big, big difference.”

The races, centered in the Southwest, pit scrappier, less expensive horses than high-end thoroughbreds in contests that can be over in less than 20 seconds.

To get in on the action at American tracks, Miguel Ángel Treviño needed someone he could trust to pick a winner. For that, he turned to Mr. Villarreal.

Mr. Villarreal was an unlikely horseman, the socially awkward son of a bookkeeper and teacher known for his build and bottomless appetite as “El Gordo,” or “Fatso.” He began attending auctions as a child, and developed an uncanny ability to spot horses that may not have come from the best lineage, but whose stride or attitude suggested an exceptional capacity for speed.

Mr. Villarreal’s parents said he started buying horses as a teenager, mostly borrowing from relatives and friends. Still, he never seemed to have enough to purchase the kinds of horses that could compete for major prizes. Nor did the strikingly effeminate man ever develop the social skills needed to fit into the macho world of breeders and trainers.

In some ways, said one friend, he stopped trying. For awhile, he named his horses after runway models — like Campbell, as in Naomi, and Elle, as in Macpherson — because he was captivated by women’s fashion.

Mr. Villarreal got his big break in 2006, when he cobbled together $10,500 to buy a colt at an auction at Los Alamitos, records show. He took the horse to Mexico, named it “El Sicario” — which means “The Assassin” — and entered it in the parejera circuit, where it began to beat younger, better-rated competitors.

“That horse got 40’s attention,” said one of Mr. Villarreal’s friends. “He told Ramiro, ‘I want you to buy horses for me.’ ”

He did not hesitate, the friend said. “This was his chance to live his dream.”

Mr. Villarreal’s father, who is also named Ramiro, saw it slightly differently.

“If someone like that asks you to do something,” the elder Mr. Villarreal said, “Are you going to tell him no?”

Soon, the younger Mr. Villarreal’s name began appearing on the lists of the top buyers at auctions in California, Texas, New Mexico and Oklahoma. His first champion was Tempting Dash, which won more than $600,000 in 2009, set a track record during the Texas Classic Futurity and gave Tremor its first victory in a million-dollar race.

No matter how successful, Mr. Villarreal always showed deference to his boss, calling him “Papi.” When Miguel Ángel Treviño wanted to see Tempting Dash for himself, Mr. Villarreal drove the horse, along with dozens of others, to Mexico.

Getting back was more complicated. To avoid inspections, quarantines and other procedures required for bringing livestock into the United States, Mr. Villarreal had trainers sneak the horses back across the border, herding them just after dawn through the Rio Grande.

“My son used to tell me that his biggest blessing was also his curse,” said Mr. Villarreal’s father. “He would tell me, ‘My problem is that I am good at what I do, so a lot of people ask me to help them. Some of those people are good. Some of those people are bad.”

‘A Great Moment’

As much as Miguel Ángel Treviño relied on Mr. Villarreal, he needed his brother, José, to be the face of his fledgling American horse business.

José Treviño, the clean-cut father of three, with a small tattooed Tremor logo on his hand, almost always attended races with his family at his side. He often credited his success to a combination of divine intervention and dumb luck.

“After a win, he always says that he’s been blessed with an ability to pick the right horses and run them in the right races,” said one person who met him. “He’s always humble. He’s the kind of guy who knows what he doesn’t know, who seems eager to learn, and who isn’t shy about asking for advice.”

At the start, José Treviño seemed reticent in the spotlight, avoiding reporters by pretending he did not speak good English. But the more races he won, the more comfortable he seemed with cameras and microphones. People who knew him said he never sought out the media, but never refused to talk when they called.

And they called often.

“That was awesome, that was awesome,” José Treviño said, beaming before reporters in November 2009, after Tempting Dash won the Texas Classic Futurity. “We were expecting him to run big, but we weren’t expecting something like this, to break the track record like this.”

The following year, when the colt named Mr. Piloto won the All American Futurity in Ruidoso, N.M., racing writers called it the “biggest upset in All-American history,” and marveled at how Mr. Treviño, with a “green-as-grass” horse, could beat competitors with better qualifying times and world-class jockeys.

Then last year, a sorrel filly named Separate Fire swept the Ed Burke Futurity at Los Alamitos, Calif., delivering José Treviño his third race where the top prizes were worth $1 million — a record.

“We’re down-to-the-ground people,” he humbly told Track Magazine after the race last July. “This is a great moment, one we are going to enjoy for a long time. But I think you have to take it as it comes and don’t let it change your life.”

Still, his life did change. Tremor’s winning streak allowed him to hire the most respected jockeys, trainers and sales associates in the business. Last year, said people who know him, José Treviño moved his family from a modest suburban house in Mesquite, Tex., where he said he worked in the construction industry, to a large ranch outside Lexington, Okla.

The 70-acre ranch, Zule Farms, is named after his wife, Zulema, a former secretary who told people that she kept the books for Tremor. A person familiar with the ranch said that Mr. Treviño had converted a manure-filled cattle barn on the property into a breeding facility, with state-of-the-art labs and special stalls where mares are implanted with embryos.

Across the quarter horse industry, people started to whisper about where he was getting his money.

“There’s no way all the money he’s putting into that ranch came from being a brick mason. It’s just not logical,” said a person familiar with Zule Farms.

Nor were José Treviño’s operations always transparent. Records show that on at least a couple occasions, he had other people sign for the company’s major purchases. One deal was signed by a teenager who looked like he was not yet old enough to drive. The other was handled by the scion of a prominent quarter horse family, Tyler Graham, who stunned a packed auction house in Oklahoma by agreeing to pay a record $875,000 for a broodmare named Dashin Follies.

At the time of the sale, Mr. Graham said he was buying the horse on behalf of a client he would only identify as “a Mexico resident.” Shortly afterward, records show, he turned the horse over to Tremor. Mr. Graham has not been accused of any wrongdoing.

An industry expert who attended the auction said the sale prompted more rumors. But he said sketchy deals are not uncommon in an industry where payments are made in cash and records are notoriously — even deliberately — unreliable.

“If someone walks into an auction with hundreds of thousands of dollars, and refuses to give his name, no one is going turn him away,” the industry expert said. “What they’ll tell him is, ‘We’ll register the horse in any name you want.’ ”

A Mysterious Death

As José Treviño’s prominence grew in the quarter horse community, so did Miguel Ángel Treviño’s place in the drug trade. By the end of 2010, he had helped lead a brutal expansion so deep into Mexico that the Zetas became not only a priority for Mexico’s security forces, but also an enemy that inspired other drug organizations to join forces and fight.

Miguel Ángel Treviño’s control over drug warehouses and hit squads across the border also compelled United States authorities to offer a $5 million reward for information leading to his arrest.

At the same time, Mr. Villarreal was falling out of favor with Tremor. He was in debt because the Treviño brothers barely paid him enough to cover travel costs, friends said. Mr. Villarreal began padding his expenses, prompting Miguel Ángel Treviño to suspect him of skimming money from Tremor, the friends said.

In September 2010, Mr. Villarreal was traveling to a horse auction in Oklahoma when he was detained by D.E.A. agents during a layover at a Houston airport. A spokesman for the agency refused to comment on its relationship with Mr. Villarreal.

But several law enforcement officials familiar with the case said agents held him for up to six hours, questioning him about his ties to Miguel Ángel Treviño. Before releasing him, the agents confiscated Mr. Villarreal’s cellphone and computer, and ordered him to meet with them a few days later.

When Mr. Villarreal returned, the agents said he could either work for them as an informant or face being prosecuted himself, according to the officials. The D.E.A. wanted Mr. Villarreal to help track Miguel Ángel Treviño’s whereabouts and then lure him into the United States.

Mr. Villarreal pleaded that he was too nervous to pull off the ruse, adding that Miguel Ángel Treviño would never trust him enough to follow him across the border.

But the D.E.A. insisted and a beleaguered Mr. Villarreal relented, the officials said.

At least once, Mr. Villarreal tipped off his handlers when Miguel Ángel Treviño went to a racetrack in Nuevo Laredo.

“Mexican authorities took pictures of 40, but they didn’t try to arrest him,” said one of Mr. Villarreal’s friends. “They told Ramiro that they were afraid too many people might get killed. Ramiro told them if they waited any longer, he was going to get killed.”

Sometime around the end of that year, Miguel Ángel Treviño summoned Mr. Villarreal to a meeting. Mr. Villarreal’s friends recounted the following incident as he had described it to them.

A pickup point was arranged in Laredo, where Mr. Villarreal was blindfolded and then driven into the Mexican desert by gang members.

Minutes dragged as Mr. Villarreal waited for Miguel Ángel Treviño to arrive. He saw two vats filled with a liquid he presumed to be acid, one of the trafficker’s preferred methods for disposing of bodies.

“Where’s Papi?” he asked the men.

“Don’t worry,” they answered. “He’s coming.”

Miguel Ángel Treviño arrived about an hour later in a car with more lieutenants and an unknown man, who was also wearing a blindfold.

The trafficker hugged Mr. Villarreal and asked, “You’re not screwing me, are you, Gordo?”

“No, of course not, Papi,” Mr. Villarreal answered.

Saying he would be back “in a minute,” Miguel Ángel Treviño walked over to the unknown man, took off his blindfold, shot him in the head and ordered his men to dump the body in one of the vats of acid.

Mr. Villarreal passed out. He told his friends he did not know how long he was unconscious, but when he awoke Miguel Ángel Treviño was slapping him in the face and laughing.

“What’s wrong, Gordo?” he joked. “You can’t handle seeing me kill someone? Next time, I’m going to have you do it.”

“No Papi,” Mr. Villarreal said. “I don’t want there to be a next time.”

The drug trafficker got back into his car and drove away. Mr. Villarreal was taken back to Laredo and immediately got in touch with the D.E.A., imploring the agents to release him from their agreement.

“When I met him he was a complete mess; profusely sweating, gangrene in one leg, and barely able to walk,” said a former law enforcement official. “He was in between a rock and a hard place: either stay in the United States and risk going to prison, or go back to Mexico and risk getting killed.”

In the end, Mr. Villarreal, 38, continued informing for the D.E.A. and in March, Miguel Ángel Treviño summoned him to another meeting.

On March 10, 2011, Mr. Villarreal’s car was found incinerated outside Nuevo Laredo. There was so little left of him that authorities took DNA samples from the ashes to identify his remains.

One federal law enforcement official said some agents believed his death was an accident, but acknowledged that no investigation was conducted.

Mr. Villarreal’s father said he had little hope of ever finding the truth. Asked who he thought was behind Mr. Villarreal’s death, the round, balding man looked over at his wife, tears streaming down her cheeks, and echoed a refrain heard from so many Mexican crime victims. “If we ask questions, we could be the next ones to die, so for us, this is a closed chapter.”

Whispers of a “mob hit” spread across the quarter horse industry. In March, law enforcement agents even raided Tremor’s stables at Los Alamitos racetrack. But none of it seemed to slow down Tremor’s business.

Last weekend, at Los Alamitos, a Tremor colt named Mr. Ease Cartel ran the second-fastest qualifying time for a million-dollar race scheduled for June 24. When Jose Trevino’s daughter was married recently, guests included well-known figures in the industry and Track magazine covered the “big event” on its Web site.

“If he had been some thug, or the stereotypical person you’d expect to be in a drug cartel, then maybe people wouldn’t have accepted him and done business with him,” a former trainer said of José Treviño. “But he’s a really nice guy, so none of us wanted to believe he could have anything to do with the killing going on in Mexico.””

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


45 Indicted in Major DEA-Led Investigations of Alleged Drug Trafficking Operations at San Juan International Airport

June 6, 2012

U.S. Drug Enforcement Administration (DEA) on June 6, 2012 released the following:

“–Multi-Ton Quantities of Cocaine Shipped Aboard American Airlines Commercial Aircraft Destined for Continental United States–

June 6 (San Juan, PR) – On May 31, a federal grand jury indicted 25 individuals as a result of an investigation lead by the Drug Enforcement Administration, the Puerto Rico Police Department (PRPD), and the Puerto Rico Department of Justice, announced today United States Attorney Rosa Emilia Rodríguez-Vélez.

The defendants are charged in a 16 count indictment with violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and conspiracy to possess with intent to distribute cocaine.

The defendants were members and associates of a criminal organization whose members and associates engaged in narcotics distribution and criminal acts principally out of the Luis Muñoz Marin International Airport in Carolina, Puerto Rico. The leader of the organization is Maribel Rodríguez-Fragoso, aka “La Flaca.”

The indictment alleges that in or around 2010 until May 2012, members of the enterprise and their associates carried kilograms of cocaine in backpack/bags, or hidden on their person, or driving official work vehicles into the Airport through the employees secured entrance. Once in the secured area, they would transfer the kilograms of cocaine to couriers inside of a designated restroom, who would then board flights departing to the continental United States.

It is further alleged that members of the enterprise transported large sums of drug proceeds in the form of U.S. currency from the continental United States to Puerto Rico. Some of the drug proceeds were used to purchase items, such as vehicles, which were regularly used to further the enterprise.

DEA Deputy Administrator Thomas M. Harrigan today said, “Americans have a right to expect the highest integrity from those they entrust with their safety, and DEA is committed to protecting that trust. Today’s arrests at one of the nation’s busiest airports reflect our relentless commitment to working with our partners to aggressively fight drug trafficking, not only at our nation’s points of entry, but at source, transit, and arrival zones throughout the world.”

The case is being prosecuted by Assistant United States Attorneys Brian Kidd, Sean Torriente and Justin Martin from the Organized Crime and Racketeering Section. This unit operates under the Narcotics Unit, and it is supervised by the Chief of the Narcotics Unit, AUSA Timothy Henwood. This unit is yet another component of our new initiative against violent crime and illegal firearms.

A second indictment unsealed today charges 20 individuals for aiding and abetting each other, and conspiracy to possess with intent to distribute in excess of 9000 kilograms of cocaine, aboard American Airlines commercial aircrafts. At times pertinent to this indictment, convict Wilfredo Rodríguez-Rosado, aka “Mogoyo” recruited and organized a group of individuals to package, transport and deliver suitcases loaded with kilograms of cocaine to the American Airlines cargo area at the Luis Muñoz Marin International Airport. Moreover, he recruited and organized a group of American Airlines employees to ensure that those suitcases were smuggled into American Airlines aircrafts destined to Miami and Orlando, Florida and Newark, NJ.

The case was investigated by the DEA, the PRPD, and the FBI, with the collaboration of the San Juan Municipal Police, and prosecuted by Assistant United States Attorneys Olga Castellón, Mariana Bauzá and Maritza González.

“The defendants in this investigation not only utilized their positions and security access to smuggle large quantities of illegal narcotics, but they also compromised the safety and security at one of the Caribbean’s most vital airports,” said Acting Special Agent in Charge of the Caribbean Division, Pedro Janer. “DEA will continue to dismantle these organizations that think they can blatantly use legitimate entities to carry out their smuggling operations.”

“The United States Attorney’s Office, along with our state and federal law enforcement counterparts, will continue investigating and prosecuting drug trafficking organizations which use our island as a trans-shipment point for drugs to the U.S. mainland. The use of commercial aircraft to smuggle narcotics in and out of Puerto Rico, also creates a serious threat to our national security,” said Rosa Emilia Rodríguez-Vélez, U.S. Attorney for the District of Puerto Rico.

The defendants in both cases are facing a minimum term of imprisonment of 10 years up to life. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

The DEA Caribbean Division would also like to extend its gratitude to the DEA Divisions in New York, Miami, Newark and Dallas for their incredible support and assistance.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.