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

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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.


Four Charged in Connection with Alleged Mortgage Fraud Scheme

January 12, 2012

The Federal Bureau of Investigation (FBI) on January 11, 2012 released the following:

“An indictment has been filed against David R. Sharrock, Richard W. Balliett, Rhonda J. McElroy, and Ronald L. Kightlinger charging them with multiple counts of bank and wire fraud in connection with a mortgage fraud scheme which caused approximately $1.3 million in losses to Geauga Savings Bank, J.P. Morgan Chase Bank, Washington Mutual Bank, and Suntrust Mortgage, Inc, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

Sharrock is also charged with making false statements to the FBI relative to the scheme.

David R. Sharrock, age 69, currently resides in Mansfield, Ohio. Richard W. Balliet, age 44, currently resides in Bucyrus, Ohio. Rhonda J. McElroy, age 49, currently resides in Bellville, Ohio. Ronald L Kightlinger, age 51, currently resides in Crestline, Ohio.

The indictment alleges that Sharrock, Balliett, and McElroy (“the sellers”) sold homes in the cities of Mansfied, Marion, Galion, Plymouth, Shelby, and Bucyrus, Ohio. The sellers made fraudulent misrepresentations to the mortgage lenders by providing undisclosed down payment assistance to the buyers and by submitting fictitious purchase agreements and verifications of deposits. As a result, the sellers signed false settlement statements at closing.

The indictment also alleges that Ronald L. Kightlinger acted as a straw buyer in purchasing a commercial building from David R. Sharrock in Mansfield, Ohio. Sharrock subsequently lied to FBI agents relative to whether he provided down payment assistance in the scheme.

If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ roles in the offense, and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant United States Attorney Vasile C. Katsaros, following an investigation by the Federal Bureau of Investigation.

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

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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 Crimes Watch 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 and OFAC SDN Sanctions Removal.

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