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.
Yet in September 2010, a beaming band of men waving Mexican flags and miniature piñatas swept into Ruidoso, N.M., to claim the million-dollar prize with a long-shot colt named Mr. Piloto. Leading the revelry at the track was Mr. Piloto’s owner, José Treviño Morales, 45, a self-described brick mason who had grown up poor in Mexico. Across the border, Ramiro Villarreal, an affable associate who had helped acquire the winning colt, celebrated at a bar with friends.
As for the man who made the whole day possible, Miguel Ángel Treviño Morales, he was living on the run, one of the most wanted drug traffickers in the world. Mr. Treviño, a younger brother of José Treviño, is second in command of Mexico’s Zetas drug trafficking organization. Thin with a furrowed brow, he has become the organization’s lead enforcer — infamous for dismembering his victims while they are still alive.
To get in on the action at American tracks, Miguel Ángel Treviño needed someone he could trust to pick a winner. For that, he turned to Mr. Villarreal.
Mr. Villarreal was an unlikely horseman, the socially awkward son of a bookkeeper and teacher known for his build and bottomless appetite as “El Gordo,” or “Fatso.” He began attending auctions as a child, and developed an uncanny ability to spot horses that may not have come from the best lineage, but whose stride or attitude suggested an exceptional capacity for speed.
Mr. Villarreal’s parents said he started buying horses as a teenager, mostly borrowing from relatives and friends. Still, he never seemed to have enough to purchase the kinds of horses that could compete for major prizes. Nor did the strikingly effeminate man ever develop the social skills needed to fit into the macho world of breeders and trainers.
In some ways, said one friend, he stopped trying. For a while, he named his horses after runway models — like Campbell, as in Naomi, and Elle, as in Macpherson — because he was captivated by women’s fashion.
Mr. Villarreal got his big break in 2006, when he cobbled together $10,500 to buy a colt at an auction at Los Alamitos, records show. He took the horse to Mexico, named it “El Sicario” — which means “The Assassin” — and entered it in the parejera circuit, where it began to beat younger, better-rated competitors.
“That horse got 40’s attention,” said one of Mr. Villarreal’s friends. “He told Ramiro, ‘I want you to buy horses for me.’ ”
Soon, the younger Mr. Villarreal’s name began appearing on the lists of the top buyers at auctions in California, Texas, New Mexico and Oklahoma. His first champion was Tempting Dash, which won more than $600,000 in 2009, set a track record during the Texas Classic Futurity and gave Tremor its first victory in a million-dollar race.
No matter how successful, Mr. Villarreal always showed deference to his boss, calling him “Papi.” When Miguel Ángel Treviño wanted to see Tempting Dash for himself, Mr. Villarreal drove the horse, along with dozens of others, to Mexico.
Getting back was more complicated. To avoid inspections, quarantines and other procedures required for bringing livestock into the United States, Mr. Villarreal had trainers sneak the horses back across the border, herding them just after dawn through the Rio Grande.
As much as Miguel Ángel Treviño relied on Mr. Villarreal, he needed his brother, José, to be the face of his fledgling American horse business.
José Treviño, the clean-cut father of three, with a small tattooed Tremor logo on his hand, almost always attended races with his family at his side. He often credited his success to a combination of divine intervention and dumb luck.
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| Jose Trevino Morales |
When the colt named Mr. Piloto won the All American Futurity in Ruidoso, N.M., racing writers called it the “biggest upset in All-American history,” and marvelled at how Mr. Treviño, with a “green-as-grass” horse, could beat competitors with better qualifying times and world-class jockeys.
Mr. Piloto may have had help. The F.B.I. affidavit said Miguel Ángel Treviño boasted to associates that he had paid some $10,000 to “gatekeepers to hold back the horses competing against Mr. Piloto.”Last year a sorrel filly named Separate Fire swept the Ed Burke Futurity at Los Alamitos, Calif., delivering José Treviño his third race where the top prizes were worth $1 million — a record.
Last year, said people who know him, José Treviño moved his family from a modest suburban house in Mesquite, Tex., where he said he worked in the construction industry, to a large ranch outside Lexington, Okla.
The 70-acre ranch, Zule Farms, is named after his wife, Zulema, a former secretary who told people that she kept the books for Tremor. A person familiar with the ranch said that Mr. Treviño had converted a cattle barn on the property into a breeding facility, with state-of-the-art labs and special stalls where mares are implanted with embryos.
“There’s no way all the money he’s putting into that ranch came from being a brick mason. It’s just not logical,” said a person familiar with Zule Farms.
Federal authorities said that José and Zulema Treviño earned less than $70,000 in 2008 and less than $60,000 in 2009.
Even so, he bought horses worth hundreds of thousands of dollars at a time, according to the affidavit. On at least a couple occasions, he had other people sign for the company’s major purchases, quarter horse industry records show. One deal was signed by a teenager who looked too young to drive. The other was handled by the scion of a prominent quarter horse family, Tyler Graham, who stunned a packed auction house in Oklahoma by agreeing to pay a record $875,000 for a broodmare named Dashin Follies.
At the time of the sale, Mr. Graham said he was buying the horse on behalf of a client he would only identify as “a Mexico resident.” Shortly afterwards records show, he turned the horse over to Tremor. Mr. Graham has not been accused of any wrongdoing.
An industry expert who attended the auction said the sale prompted more rumours But he said sketchy deals are not uncommon in an industry where payments are made in cash and records are notoriously — even deliberately — unreliable.
“If someone walks into an auction with hundreds of thousands of dollars, and refuses to give his name, no one is going turn him away,” the industry expert said. “What they’ll tell him is, ‘We’ll register the horse in any name you want.’ ”
As José Treviño’s prominence grew in the quarter horse community, so did Miguel Ángel Treviño’s place in the drug trade. By the end of 2010, he had helped lead a brutal expansion so deep into Mexico that the Zetas became not only a priority for Mexico’s security forces, but also an enemy that inspired other drug organizations to join forces and fight.
Miguel Ángel Treviño’s control over drug warehouses and hit squads across the border also compelled United States authorities to offer a $5 million reward for information leading to his arrest.
At the same time, Mr. Villarreal was falling out of favour with Tremor. He was openly upset that the Zetas had forced him to transfer ownership of one of his best racehorses to Tremor, according to the affidavit, which said the cartel used “the threat of death” to compel associates to sign over horses or help them move money.
Mr. Villarreal was also in debt because the Treviño brothers barely paid him enough to cover travel costs, friends said. Mr. Villarreal began padding his expenses, prompting Miguel Ángel Treviño to suspect him of skimming money from Tremor, the friends said.
In September 2010, Mr. Villarreal was travelling to a horse auction in Oklahoma when he was detained by D.E.A. agents during a layover at a Houston airport. A spokesman for the agency refused to comment on its relationship with Mr. Villarreal.
But several law enforcement officials familiar with the case said agents held him for up to six hours, questioning him about his ties to Miguel Ángel Treviño. Before releasing him, the agents confiscated Mr. Villarreal’s cellphone and computer, and ordered him to meet with them a few days later.
When Mr. Villarreal returned, the agents said he could either work for them as an informant or face being prosecuted himself, according to the officials. The D.E.A. wanted Mr. Villarreal to help track Miguel Ángel Treviño’s whereabouts and then lure him into the United States.
Mr. Villarreal pleaded that he was too nervous to pull off the ruse, adding that Miguel Ángel Treviño would never trust him enough to follow him across the border.
But the D.E.A. insisted and a beleaguered Mr. Villarreal relented, the officials said.
At least once, Mr. Villarreal tipped off his handlers when Miguel Ángel Treviño went to a racetrack in Nuevo Laredo.
“Mexican authorities took pictures of 40, but they didn't try to arrest him,” said one of Mr. Villarreal’s friends. “They told Ramiro that they were afraid too many people might get killed. Ramiro told them if they waited any longer, he was going to get killed.”
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| Villareals charred remains found in car |
Sometime around the end of that year, Miguel Ángel Treviño summoned Mr. Villarreal to a meeting. Mr. Villarreal’s friends recounted the following incident as he had described it to them.
A pickup point was arranged in Laredo, where Mr. Villarreal was blindfolded and then driven into the Mexican desert by gang members.
Minutes dragged as Mr. Villarreal waited for Miguel Ángel Treviño. He saw two vats filled with a liquid he presumed to be acid, one of the trafficker’s preferred methods for disposing of bodies.
Miguel Ángel Treviño arrived about an hour later in a car with more lieutenants and an unknown man, who was also wearing a blindfold.
The trafficker hugged Mr. Villarreal and asked, “You’re not screwing me, are you, Gordo?”
“No, of course not, Papi,” Mr. Villarreal answered.
Saying he would be back “in a minute,” Miguel Ángel Treviño walked over to the unknown man, took off his blindfold, shot him in the head and ordered his men to dump the body in one of the vats of acid.
Mr. Villarreal passed out. He told his friends he did not know how long he was unconscious, but when he awoke Miguel Ángel Treviño was slapping him in the face and laughing.
“What’s wrong, Gordo?” he joked. “You can’t handle seeing me kill someone? Next time, I'm going to have you do it.”
“No Papi,” Mr. Villarreal said. “I don’t want there to be a next time.”
The drug trafficker got back into his car and drove away. Mr. Villarreal was taken back to Laredo, where he immediately implored the D.E.A. to release him from their agreement.
“When I met him he was a complete mess; profusely sweating, gangrene in one leg, and barely able to walk,” said a former law enforcement official. “He was in between a rock and a hard place: either stay in the United States and risk going to prison, or go back to Mexico and risk getting killed.”
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| Miguel Ángel Treviño |
On March 10, 2011, Mr. Villarreal’s car was found incinerated outside Nuevo Laredo. There was so little left of him that authorities took DNA samples from the ashes to identify his remains. One federal law enforcement official said some agents believed his death was an accident, but acknowledged that no investigation was conducted.
Mr. Villarreal’s father said he had little hope of ever finding the truth. Asked who he thought was behind Mr. Villarreal’s death, the round, balding man looked over at his wife, tears streaming down her cheeks, and echoed a refrain heard from so many Mexican crime victims. “If we ask questions, we could be the next ones to die, so for us, this is a closed chapter.”
Whispers of a “mob hit” spread across the quarter horse industry. In March, law enforcement agents even raided Tremor’s stables at Los Alamitos racetrack after receiving tips that Omar Treviño had flown there to look at some new horses. But none of it seemed to slow down Tremor’s business.
Last weekend, at Los Alamitos, a Tremor colt named Mr. Ease Cartel ran the second-fastest qualifying time for a million-dollar race scheduled for June 24. When Jose Treviño’s daughter was married recently, guests included prominent figures in the industry, and Track magazine covered the “big event” online.
“If he had been some thug, or the stereotypical person you’d expect to be in a drug cartel, then maybe people wouldn’t have accepted him and done business with him,” a former trainer said of José Treviño. “But he’s a really nice guy, so none of us wanted to believe he could have anything to do with the killing going on in Mexico.”
The Grahams the prominent Texas family with connections to the state’s top officials is alleged to have purchased and boarded horses for a Mexican drug cartel engaged in money laundering, according to court records.
Federal indictments recently unsealed in Austin allege that 14 defendants with Spanish surnames used elite U.S. racehorses to launder millions of dollars of drug money for Mexico’s ruthless Los Zetas cartel. The indictments also implicate the renowned South-West Stallion Station breeding stables outside Austin, run by a veterinarian named Charles Graham and his grandson Tyler. Over the past decade, they have contributed almost $250,000 to federal and state politicians led by Texas’ top three officials. In 2008 Gov. Perry appointed Dr. Graham to the now-defunct Texas Department of Rural Affairs. The Grahams haven’t been charged with wrongdoing, and their names don’t appear in the indictments. But allegations made against their stables in the indictments suggest that the Zetas cartel paid the Grahams a small fortune in recent years. In all, Tyler Graham bought more than $1 million worth of horses that ended up in the hands of the Zetas cartel, which made at least $550,000 in payments to the Grahams’ stable, according to trade publications and the indictment. The Grahams didn’t respond to calls and emails seeking comment.
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| Charles Graham |
While never mentioning the Grahams, the money-laundering indictment alleges that the Zeta conspirators paid their South-West Stallion stables $550,000 last July to board and breed Zeta racehorses. One way the cartel laundered money, according to the indictment, was to let cartel flunkies hold title to a horse until it won a big race or became lucrative through the sale of breeding rights. Then backdated contracts were drawn up suggesting that Jose Treviño—one of three brothers at the centre of the conspiracy—presciently bought the champ on the relative cheap just before it hit the big leagues, according to the indictments. One Zeta horse was not-so-subtly christened Number One Cartel.
In 2010 Tyler Graham went to Oklahoma City to attend the horse auction at Heritage Place, a 40-acre facility co-owned by Charles Graham, according to TRACK Magazine. Amid a global economic crisis, average sales prices at the auction increased by 14 percent over the year before. Driving this inflation, Tyler Graham placed the winning bids on the event’s two most-expensive horses. He bid $250,000 for a young mare named Coronita Cartel and a record $875,000 for the breeding mare Dashin Follies. TRACK Magazine reported at the time that Graham shipped the mares home to South-West Stallion Stables—but not on his own account. The trade publication reported that Graham “was acting as an agent for an undisclosed buyer who reportedly is a Mexican resident.”
Describing that same auction, the recent indictments allege that defendant Jose Treviño “directed the purchase” of both horses “in a nominee name.” Then a company controlled by Mexican businessman Alejandro Barrandas allegedly wired more than $900,000 while defendant Luis Gerardo Aguirre allegedly supplied another $100,000 in cash, according to the indictments. Two other defendants allegedly then paid to board the horses for six weeks at the stables before the prize horse were shipped to Jose Treviño’s Oklahoma ranch, according to the indictment.
In August, Tyler Graham posted photos on Facebook of some of his yearlings, including Tahiti Cartel. Sired by Carona Cartel, the horse sold at Heritage Place in September 2011 for $50,000. Among Graham’s friends on Facebook: Ramiro Villarreal, a gifted Mexican horseman who Miguel Treviño, the second-highest ranking Zeta, recruited to help build his quarter-horse enterprise. At some point, Villarreal reluctantly became a DEA informant, according to The New York Times; in March 2011, his charred remains were found in a car outside Nuevo Laredo.
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| Tyler Graham |
Not in doubt are the Graham’s political connections. Since 2001, the Grahams have contributed $32,025 to Perry’s campaign account, accord to state records. They’ve also donated to Lt. Gov. David Dewhurst ($17,100), House Speaker Joe Straus ($15,500), a San Antonio Republican, and state Sen. Kirk Watson ($15,500), an Austin Democrat.
Miguel Ángel Treviño, known as Zeta-40, or just 40, was never in the military. But he became useful to the Zetas for his experience moving contraband across the border.
Law enforcement authorities say the Zetas have been able to rapidly expand their reach beyond Mexico’s borders with the United States and Guatemala. And while other Mexican drug organizations prefer to keep themselves and their money close to home, the Zetas have established outposts as far as South America and West Africa.
