Opinion ID: 2799450
Heading Depth: 2
Heading Rank: 1

Heading: Overview of the Conspiracy

Text: According to trial testimony, Los Zetas are a “cartel” that controls geographic areas within Mexico. The original group of Zetas was formed by the Mexican government as an armed special-forces unit to combat drug-cartel operations in Mexico, and the group was designated with the radio call sign “Zeta.” A group of thirty Zetas deserted from the Mexican military under their then-commander, known as “Zeta 1,” to work for the Gulf drug cartel as enforcers. In that role, they committed acts of domestic terrorism, bribed public officials and law enforcement, and fought other cartels, among other activities. In about 2007 or 2008, Los Zetas split from the Gulf cartel. Los Zetas now control several Mexican cities and border-crossing points between Mexico and the United States. Los Zetas produce marijuana and methamphetamine in Mexico, import cocaine and methamphetamine precursor chemicals into Mexico, and export narcotics into the United States. Los Zetas make hundreds of millions of dollars annually from the import and sale of illegal drugs. 1 Members of Los Zetas are assigned numbers in accordance with the order in which they joined the armed group, e.g., the seventh member was known as “Zeta 7.” At the time of the trial, the leader of Los Zetas was Miguel Angel 1 Jesus Rejon–Aguilar, also known as Zeta 7, was the former national supervisor of Los Zetas, and he estimated that the cartel took in about $350 million per year. 3 Case: 13-50849 Document: 00513035268 Page: 4 Date Filed: 05/07/2015 No. 13-50849; cons. w/ No. 13-51003 Trevino Morales, also known as “Zeta 40.” His brother Oscar Omar Trevino Morales, also known as “Zeta 42,” was second-in-command.
Miguel and Omar Trevino used the proceeds of cocaine sales to purchase quarter horses 2 in the United States through legitimate-appearing intermediaries. They did so in part because the quarter-horse business “was a good business . . . to get clean money” from the proceeds of drug sales in the United States back into Mexico. Los Zetas generated “clean money” by repeatedly “selling” horses to individuals or shell companies controlled by coconspirators. For instance, one horse, Blue Girls Choice, was initially purchased by Ramiro Villareal for $15,000 cash. The horse was then repurchased by Villareal at a different horse sale—this time for $135,000. Later, the horse was purchased for $30,000, and then repurchased again for $135,000. This same horse was bought and sold several times over between members of the conspiracy. Each transaction generated the appearance of legitimate cash proceeds. The horses were held in the names of multiple individuals and companies to conceal the true identity of their actual owner: Zeta 40, Miguel Trevino. 3 Los Zetas paid for horse training, breeding, veterinary bills, and racing expenses with the proceeds of illegal drug sales. Miguel Trevino directed subordinates Mario Cuellar and Jose Vasquez to deliver cash payments for these expenses. Cuellar and Vasquez sold cocaine in the United States, and, 2 The American quarter horse is a breed of horse bred to sprint short distances, and the breed is named for its success in races of a “quarter” of a mile or less. 3 As one witness testified, “The pattern was these horses would change claims of ownership quite rapidly. Some of the companies are alias companies. The people’s names on the AQHA [the American Quarter Horse Association] records are alias names. Some of them are real names. But th[ose] people did not purchase the horses or have anything to do with the horses.” 4 Case: 13-50849 Document: 00513035268 Page: 5 Date Filed: 05/07/2015 No. 13-50849; cons. w/ No. 13-51003 rather than delivering all of the profits from these sales back to Mexico, they would deliver cash to the horse operation. 4 Horse expenses also generated “clean cash.” For instance, Tyler Graham, a manager at a quarter-horse-breeding farm, testified that members of the conspiracy would pay each other stud fees for Los Zetas’ horses to inseminate other horses that Los Zetas already owned, generating “[s]everal hundred thousand” dollars in “clean money” in one year alone.
Miguel Trevino ordered the killing of at least two individuals who either refused to cooperate in the money-laundering scheme or were cooperating with the authorities. Los Zetas purchased quarter horses through intermediaries. These intermediaries were often wealthy businessmen who were not under IRS investigation, so that law enforcement would not ask questions “about where the money [for the horses] was coming from.” These individuals included Alejandro Barradas and Ramiro Villarreal. The government alleges that Appellant Colorado Cessa was among those who purchased horses on Los Zetas’ behalf; this is discussed in greater detail below. A former leader of Los Zetas testified that Miguel Trevino ordered the murder of Ramiro Villarreal “because [Los Zetas’ leaders] realized that he was cooperating with the U.S. authorities” after his arrest in Houston. 5 Miguel Trevino ordered the murder of Alejandro Barradas because he refused to allow the organization to register horses under his name as the owner. 4 One witness described how Vasquez would ordinarily receive “a thousand kilos of cocaine a month” that he would then sell in the Dallas area, such that he would “send back maybe [$]3 or $4 million a week” to the cartel; however, he would pay horse expenses “out of whatever [he] was going to be sending . . . [s]o it was never [his] money. It was always their money.” 5 A DEA agent’s testimony separately confirmed that Villarreal had indeed been cooperating with officials before his body was found at the scene of a “fiery” car crash. 5 Case: 13-50849 Document: 00513035268 Page: 6 Date Filed: 05/07/2015 No. 13-50849; cons. w/ No. 13-51003 A wealthy Mexican businessman, Alfonso Del Rayo, testified that members of Los Zetas kidnapped and extorted him, using the horse operation essentially to launder the ransom money. Several Zetas kidnapped and tortured Del Rayo and demanded a ransom of the equivalent of $4.5 million. Del Rayo was released nine days later, after sustaining severe injuries. Soon thereafter, a Veracruz government official and Carlos Nayen (a coconspirator) approached Del Rayo “about [his] kidnapping.” They instructed Del Rayo to travel to Oklahoma City to buy a horse, insisting this was for his own safety and that of his wife and children. Del Rayo flew to Oklahoma City, where he was met by Appellant Fernando Garcia–Solis and instructed to make the winning bid on a horse named Blues Ferrari, a horse purchased for $15,000 as part of the conspiracy. Del Rayo complied, purchasing the horse for $310,000. The manager of the Oklahoma City auction house testified that Del Rayo “looked like he had been in an accident.” Indeed, the auction manager was so struck by Del Rayo’s appearance that he took a photo on his cell phone (which was shown to the jury). He explained: “I’d never seen this person before and [he was] buying a very expensive horse, and I was just very concerned with the transaction at the time.” Carlos Nayen later asked that Del Rayo send between $600,000 and $700,000 in checks to the operation’s horse-breeding facility, and after Nayen’s indictment, Nayen demanded the keys to Del Rayo’s house in San Antonio and money to pay attorney’s fees. Del Rayo understandably said he felt he could not refuse demands from Nayen or from other members of Los Zetas.
Members of Los Zetas paid bribes to give Miguel Trevino’s horse an unfair advantage at the 2010 All American Futurity Race—the Kentucky Derby of quarter-horse races. Mario Cuellar, a Los Zetas subordinate, testified that Miguel Trevino instructed him to pay $110,000 in bribes to gate starters— 6 Case: 13-50849 Document: 00513035268 Page: 7 Date Filed: 05/07/2015 No. 13-50849; cons. w/ No. 13-51003 $10,000 each—to give Trevino’s horse, Mr. Piloto, an advantage in the race. With Miguel and Omar Trevino and other Los Zetas leaders watching the race via an internet connection, Mr. Piloto won the race by a nose—even though he had the slowest qualifying time. As a reward for having successfully paid off all the starters, Miguel Trevino rewarded Carlos Nayen with 10 kilograms of cocaine. B. The Appellants’ Roles in the Money-Laundering Conspiracy Two of the Appellants were allegedly key players in the horse-racing and money-laundering operation. Jose Trevino Morales (Jose Trevino) is Miguel and Omar Trevino’s brother, and he operated a horse ranch and related companies. With money from Los Zetas, he helped his brothers acquire as many as 500 horses. Francisco “Pancho” Colorado Cessa (Colorado) is a wealthy businessman who, the government alleges, acted as an intermediary through whom Los Zetas purchased horses. Colorado’s relationship with Los Zetas began with Efrain Torres, also known as “Zeta 14,” a now-deceased leader of Los Zetas. Torres gave Colorado $6 million in startup capital for Colorado’s oil-services company, ADT Petro Servicios (ADT). The other two Appellants, Eusevio Huitron and Fernando Garcia–Solis, had comparatively minor roles. Garcia–Solis translated for a Los Zetas subordinate, Carlos Nayen, and assisted Nayen with cash deliveries, auctions, and other aspects of the horse operations. Eusevio Huitron worked as a horse trainer for Miguel Trevino for nearly two years. He accepted significant cash payments from Los Zetas for his horse-training services—$505,007 in total. Each Appellant’s specific involvement in the conspiracy is discussed in greater detail below.