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Quarter horses in alleged money-laundering scheme to be sold

A major auction of American quarter horses in a racing operation which US authorities allege was used to launder Mexican drug money will be held early in November.

The Oklahoma City auction follows just weeks after another major quarter horse auction triggered by US authorities – the dispersal of the well-bred herd of alleged fraudster Rita Crundwell.

Crundwell’s horses were sold by the US Marshals Service in proceedings running alongside her criminal prosecution for wire fraud, in which it is alleged she siphoned about $US53 million from the coffers of the Illinois town of Dixon over a 22-year period while she worked as its financial controller. She has denied the charge.

Now, the Inland Revenue Service (IRS) is targeting hundreds of seized quarter horses allegedly at the center of a money-laundering operation for the Zetas cartel.

About 379 horses, allegedly bought with drug money by Zetas cartel leaders to mask their illegal activities, will go under the hammer from November 1-3.

The IRS has already sold 99 broodmares in the case, netting gross proceeds of $US32,175.

A judge has told the tax department to hold the proceeds, pending the outcome of the criminal case.

Money from the horses in the case is likely to be released to the government in the event of a successful prosecution. The trial is set down for March in Austin, Texas.

Selling assets before a successful criminal prosecution is unusual, but authorities were concerned about preserving the value of the horses. One estimate put the monthly cost of caring for the animals at $US200,000.

It is understood that five of the most valuable horses are being withheld from the sale in a deal between the parties.

Miguel Angel Trevino Morales

Miguel Angel Trevino -Morales

In all, more than 400 horses were involved in the alleged operation across several states.

A federal grand jury in the Western District of Texas returned an indictment on May 30 charging 14 people, including the leader of the syndicate in Mexico, Miguel Angel Trevino-Morales – also known as “40″ – and his brothers, Oscar Omar Trevino-Morales (“42″) and Jose Trevino-Morales.

The indictment alleges that, since 2008, Miguel and Oscar Trevino-Morales directed portions of the bulk cash generated from the sale of illegal narcotics through the Los Zetas cartel to Jose and Zulema Trevino for purchasing, training, breeding and racing quarter horses in the US.

The indictment identifies millions of dollars worth of transactions in New Mexico, Oklahoma, California and Texas involving the horses.

Jose Trevino, Zulema Trevino and others used “front” companies to conceal and disguise the true ownership of the quarter horses, it is alleged.

FBI Special Agent in Charge Armando Fernandez said at the time that the investigation revealed the varied attempts by Mexican drug cartels to further their criminal enterprises by any means necessary.

“The FBI and its partners stand ready to combat all efforts by transnational criminal organizations to undermine our national security wherever and whenever they may be uncovered.”

As well as the horses, the indictment also seeks the forfeiture of farm and ranch equipment, horse-racing equipment, real estate in Lexington, Oklahoma, and in Bastrop County, Texas; and funds in three bank accounts allegedly used in the defendants’ scheme.

The indictment also seeks $US20 million, representing the amount of money derived from the defendants’ scheme.

Auction details: www.treasury.gov/ or www.heritageplace.com.

 

 

Horsetalk.co.nz

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