FBI Says Cartel Used Bank of America to Launder Money

July 9, 2012

Bloomberg Business Week on July 9, 2012 released the following:

“By Joe Schneider

The brother of the alleged leader of a Mexican cocaine-trafficking cartel used Bank of America Corp. (BAC) accounts to invest the organization’s drug proceeds in U.S. racehorses, a FBI agent said.

Jose Trevino-Morales, one of 14 people indicted by a federal grand jury in Texas on June 12, used a personal account and a business account under the name of Tremor Enterprises LLC to buy and sell horses using money generated from cocaine trafficking, extortion and bribery, Jason Preece, a special agent with the Federal Bureau of Investigation, said in a June 11 sworn statement filed in federal court in Dallas.

“The ultimate goal of this money laundering operation was to provide Jose Trevino with apparent legitimate assets purchased and maintained by illegally obtained money,” Preece said. Bank of America isn’t accused of any wrongdoing in the agent’s statement.

Details of the transactions were revealed in a probe of the Los Zetas drug cartel, which according to the filing, funnels thousands of kilograms of cocaine into the U.S. each year. Los Zetas is the biggest drug cartel in Mexico, in geographical presence, and controls 11 states in the country, generating millions of dollars of revenue, Preece said in the statement filed in a bid to gain a search warrant for Trevino’s property.

Strong Procedures
“We have strong anti-money-laundering procedures and work closely with the authorities when suspicious activity is discovered,” Larry Di Rita, a spokesman at Charlotte, North Carolina-based Bank of America, said in a phone interview today.

The bank doesn’t comment on any specific legal and customer cases, he said.

Preece filed the statement to support his request for court permission to search Trevino’s property in Balch Springs, Texas, a Dallas suburb, where he said investigators were likely to find horse ownership records, bank statements and cellular phones used to communicate with Los Zetas.

Trevino, who earned $29,000 in 2009 from Texas Stone and Tile LLC, had expenses of $200,000 a month the following year to support his horses, according to an FBI informant who isn’t named in the filing. The drug cartel had bought at least $4.2 million worth of quarter horses, which are used in short- distance races, over a four-year period, according to the indictment.

The two most well-known horses Trevino had were Tempting Dash and Mr. Piloto, according to the filing.

Mr. Piloto won the All American Futurity race in 2010 at Ruidoso Downs Race Track, with Tremor Enterprises’ bank account being credited with $968,440 as a result, Preece said.

Miguel Angel Trevino Morales, 38, leader of the Los Zetas drug cartel, and his brother Oscar Omar Trevino Morales were also indicted by the grand jury.

The defendants are charged in the May 30 indictment with conspiracy to launder monetary instruments. The crime carries a maximum penalty of 20 years in prison.

The criminal case is U.S. v. Morales, A-12-cr-210-SS, U.S. District Court, Western District of Texas (San Antonio). The application and affidavit for search warrant is 3:12-mj-255, U.S. District Court, Northern District of Texas (Dallas.)”

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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.


US Indicts 14 In Alleged Drug and Money Laundering Scheme Involving Horses

June 13, 2012

The Wall Street Journal on June 12, 2012 released the following:

“By Samuel Rubenfeld

A federal grand jury in Texas voted to return an indictment against 14 defendants in connection with a conspiracy to launder Los Zetas drug money by buying, training, breeding and racing American quarter horses in the U.S.

Among those charged was Miguel Angel Trevino Morales, the leader of Los Zetas, along with his brothers, Oscar Omar Trevino Morales and Jose Trevino-Morales, the Justice Department said.

The indictment, unsealed Tuesday, charges the defendants with one count of conspiracy to launder monetary instruments. It accuses the Zetas of directing part of the cash generated from selling drugs to buy, train, breed and race quarter horses in the U.S.

Miguel and Oscar sent their brother Jose and his wife cash to operate Tremor Enterprises LLC, the business they created for the horse training, the indictment said.

“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 Rich Weber, chief of the Internal Revenue Service’s criminal investigation division, in a statement (pdf).

“This attack on one of the Zeta’s most profitable money laundering schemes is an essential front in the war on drugs and will financially disrupt and help dismantle this violent international criminal organization,” Weber said.

The indictment also seeks the forfeiture of several quarter horses, including Tempting Dash, winner of the Dash for Cash at Lone Star Park race track in Grand Prairie, Texas, on Oct. 24, 2009; Mr. Piloto, $1 million All American Futurity winner at Ruidoso Downs on Labor Day, 2010; Dashin Follies; Coronita Cartel; and Separate Fire.

It also seeks the forfeiture of farm and ranch equipment; horse racing equipment; property in Lexington, Okla. and Bastrop County, Texas; and money contained in bank accounts used in the scheme.

Earlier Tuesday, authorities arrested seven of the 14 defendants, including Jose Trevino-Morales and his wife, Zulema Trevino, in Lexington, Okla. Also arrested were Fernando Solis Garcia in Ruidoso, N.M.; Carlos Miguel Nayen Borbolla, Adrian Farias and Felipe Alejandro Quintero in Los Angeles; and Eusevio Maldonado Huitron in Austin, Texas. They remain in federal custody, the Justice Department said.

None of those arrested could be reached for comment.

The New York Times, in a blockbuster 4,000-word story, reported earlier Tuesday about the scheme. The Times reported that an FBI affidavit said the Zetas channeled about $1 million a month into buying quarter horses in the U.S, and that authorities were tipped off in January 2010, when the cartel paid more than $1 million in a single day for two broodmares.

In its report, the paper said it became aware of Tremor’s activity in December 2011 while reporting about the Zetas and learned of the U.S. government probe last month, but agreed to hold the story until Tuesday morning’s arrests.

Among those charged but not arrested is Francisco Antonio Colorado Cessa of Veracruz, Mexico. Colorado Cessa is accused in the indictment of acting as a straw buyer for various horses. In connection with the indictment, the Treasury’s Office of Foreign Assets Control slapped Kingpin Act sanctions [OFAC SDN Sanctions] on him that label Colorado Cessa as a narcotics trafficker.

“Our action cuts Colorado Cessa off from the U.S. financial system and it is yet another signal to Miguel and Omar Trevino Morales, and the Zetas, that OFAC will target their financial and business network wherever it is found,” said Adam Szubin, director of OFAC, in the statement.

The Zetas were designated under the Kingpin Act as a narcotics trafficker by the president in 2009. The group is notorious for its violence; officials blamed the Zetas for a dump of 49 headless and handless bodies in May along a Mexican highway. Since 2009, OFAC has designated several of its top leaders and dozens of its lieutenants.”

US v. Miguel Angel Trevino Morales, et al. – Federal Criminal Indictment

18 U.S.C. § 1956

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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.