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A Mexican Cartel’s Day at the Races

By Robert Valencia

With the Preakness and Kentucky Derby, horse racing is back in the headlines—but not always in the way organizers would like. Not only were horses at these races stimulated with race-day injections, but money from the Mexican drug cartels is making its way into U.S. horse racing. It’s the first time Mexican drug money has been found infiltrating American sports. A series of documents from the U.S. District Court from the Northern District of Texas show that since 2008 the Zetas, Mexico’s most feared drug cartel, laundered nearly $1 million in drug money each month through horse racing. At the helm of this operation is Jose Treviño, Zetas’ leader, and his brothers, who launder money under various names, organizations, and business bank accounts.  

The court documents show that the Treviño Brothers managed to establish a thriving horse breeding operation in the United States under a company called Tremor Enterprises, allowing them to launder millions of dollars in drug money. Tremor bought nearly 300 stallions and mares. In less than three years, Tremor won three of the biggest races, whose prices amounted to over $2 million. They successfully kept the operation in secret for four years, even if they weren’t always inconspicuous. The Treviño Brothers’ horses had names like “Number One Cartel” or “Mr. Ease Cartel”—until the Justice Department sent a handful of law enforcement agents to the company’s stables in Ruidoso, New Mexico.

This case has become yet another example of Latin American drug money entering sports in the last few years. In Colombia, five soccer teams came under investigation after being accused of having connections with Colombian drug cartels. In 1995, América de Cali, one of Colombia’s most popular soccer teams, was placed under U.S. Executive Order 12978 (which freezes bank accounts connected with drug cartels), because of ties to the Cali cartel. The late Pablo Escobar had strong connections with Atlético Nacional while he was at the helm of the Medellín Cartel. One of the most emblematic images of the cartel-soccer connection in Colombia was famous goalkeeper René Higuita’s visit to Escobar when the latter was behind bars in the Medellin-based La Catedral “prison” (which was actually more like a hotel, designed with input from Escobar himself).

The cases of money laundering in businesses, including sports, led to the ratification of the Foreign Narcotics Kingpin Designation Act in 1999, or as it’s known in Latin America, “The Clinton List.” Passed under President Clinton, the Kingpin Act blocks all property and interest in property if organizations or persons—identified by the President, the CIA, FBI, or the Secretaries of State or Defense—are found to be materially assisting or providing financial support to international narcotics trafficking activities. Since 1950, the U.S. Office of Foreign Assets Control (OFAC) has been seizing foreign assets. Originally OFAC was intended to block all Chinese and North Korean assets subject to U.S. jurisdiction. Today, the majority of seized assets belong to Latin American crime groups like the FARC, the United Self-Defense Forces in Colombia, and Mexico’s Sinaloa Cartel and La Familia Michoacana.                                             

But despite OFAC and the Kingpin Act, drug cartel schemes have always found their way into the United States. The reluctance of the U.S. government to consider drug decriminalization or legalization exacerbates the cartel activities that rake in cash at the expense of thousands of lives south of the border. Security-oriented U.S. policy isn’t working. According to a recent United Nations report, there was a slight increase in the illegal cocaine crop in Colombia for the first time in five years—from 62,000 to 64,000 hectares. In the last three years, Peru has also seen a rise in coca crops, becoming one of the world’s top coca producers alongside Bolivia and Colombia.

As the supply grows, so does the demand in the United States. Hence, cartels like the Sinaloa Cartel led by the feared Joaquín “El Chapo” Guzmán will always find a way to get their product onto America's streets. Never has the issue of money laundering in sports been so blatant and hit so close to home. Hopefully, this will be a wake up call for the U.S. government to address the problem of drugs before drug money gets its tentacles into other businesses. It’s time to put the U.S. drug policy out to pasture.

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Robert Valencia is a Research Fellow at the Council on Hemispheric Affairs and is a contributing writer for Global Voices. He also has a personal blog called My Humble Opinion.

[Photo courtesy of Fiduz]

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