Just three years ago, Jose Trevino Morales was working as a bricklayer in Texas, and his wife, Zulema Flores Trevino, was an office clerk for a staffing company.
They lived in Balch Springs, Texas, outside Dallas. They raised four children and made less than $60,000 total in 2009 from those jobs. They often only had about $2,000 in their bank account.
In late 2009, that all changed.
That fall, Jose Trevino started up a racehorse operation. It was funded — the FBI says — by millions of dollars from the powerful and violent Los Zetas Mexican drug cartel run by his two younger brothers.
The FBI claims the two brothers, over the last two years, have funneled $1 million a month into the United States to purchase race horses.
Last year, Jose Trevino and his wife moved their operation to a sprawling quarter-horse ranch near Lexington, south of Oklahoma City. He named the ranch Zule Farms, after his wife. There they made improvements and cared for about 400 horses.
They were arrested at that ranch Tuesday after they and 13 others were indicted by a federal grand jury in Austin. The 15 defendants are accused in the indictment of a money-laundering conspiracy involving $20 million.
Jose Trevino, 45, and Zulema Trevino, 38, remain in federal custody. Federal authorities made six other arrests last week, in California, Texas and New Mexico.
Those indicted include Trevino's brothers. Miguel Angel Trevino Morales, also known as “40,” was identified as one of the top two leaders of the Zetas. Oscar Omar Trevino Morales, also known as “42,” was identified as also having a leadership role in the cartel.
Neither has been arrested. Both are believed to be in Mexico.
An FBI special agent reported last week in a request for a search warrant that “‘40' and ‘42' provided the resources and funds to establish their brother, Jose Trevino, as the frontman for their quarter-horse business in the United States.”
“To facilitate this money-laundering operation, Jose Trevino established Tremor Enterprises LLC, 66 Land LLC and Zule Farms LLC as some of the front businesses,” the FBI agent reported.
Bought by force
The agent reported the Trevino brothers used extortion to get people to sell them horses. The agent reported witnesses said “the threat of death by members of Los Zetas ... intimidates and coerces individuals to transfer horses to Jose Trevino or one of his companies for a price substantially less than the true value of the horses.”
The FBI agent reported one informant said Omar Trevino once stated that “with his own weapon, he had killed over 1,000 people and ‘40' had killed over 2,000 people.”
The FBI agent reported one horse owner, Ramiro Villarreal, 38, was found dead in his car in 2011 after he got upset over being forced to give up a winning horse, Tempting Dash, to the brothers.
The New York Times last week reported Villarreal's car was found incinerated on March 10, 2011, outside Nuevo Laredo, Mexico. The Times reported authorities took DNA samples from the ashes to identify his remains.
Jose Trevino listed Tempting Dash as his horse when he applied for a racehorse owner license in Oklahoma in January 2010. Jose Trevino reported to the Oklahoma Horse Racing Commission that he was born in Nuevo Laredo, Mexico, but was a U.S. citizen.
The grand jury reported the Trevino brothers also would use straw purchasers to buy the horse to disguise the true ownership.
The FBI began investigating after a source in Mexico reported the brothers in the Zetas drug cartel spent more than $1 million to purchase two quarter horses in January 2010 at the Heritage Place Auction House in Oklahoma City.
The FBI agent reported the Trevino brothers' most successful quarter horse is Mr. Piloto, which won $1 million in the All American Futurity at the racetrack in Ruidoso Downs, N.M., in 2010. Mr. Piloto was a long shot in the 440-yard race and won by a nose.
A second informant claimed Miguel and Omar Trevino watched the race on the Internet, the FBI agent reported in the court affidavit.
“At this race, ‘40' stated that he and his associates paid approximately $10,000 to the gatekeepers to hold back the horses competing against Mr. Piloto. When Mr. Piloto won, ‘40' stated that his brother Jose Trevino used to be a bricklayer and would wake up at 5 a.m. every day,” the agent reported.
The agent also reported that a third informant claimed Jose Trevino used pills that cost $1,000 each to dope his racehorses, including Mr. Piloto.
A judge has ordered employees of the defendants to continue to care for the more than 400 quarter horses. Prosecutors told the judge Friday that federal agents had to seize 12 horses Thursday in New Mexico after a horse trainer abandoned them.
Prosecutors told the judge the government is monitoring the situation at the ranch near Lexington.
“The vast majority of the horses ... are in Lexington,” prosecutors reported. “If federal agents believe that the well-being of the Oklahoma horses is in jeopardy, it will be seeking permission from the court to take the appropriate action to safeguard the horses.”