Zetas Cartel Money Laundering Trial Week Two Recap: Allende Piedras Negras massacre, California horse race connection, Pancho colorado

By Havana and Chivis for Borderland Beat

Monday through Thursday of week two below
Week one can be Linked Here

The two men worked directly for Zetas leaders, brothers Miguel Treviño and Omar Treviño. Moreno said he had his “own client”, “one José Vásquez Jr. of Dallas”, who purchased 800 kilos to a ton each month, which generated 4 million USD of revenue per two weeks.

Moreno arranged guns and money smuggling into Mexico while diverting a portion of drug funds for the horse racing operation. He denies giving 200k to Eusebio “Chevo” Huitrón (photo at left)to purchase a horse, although he did remember arranging undocumented migrants to work on the ranch.

He did admit to several payouts in Coahuila, including 10 thousand dollars to Chevo at the María’ Savelle’s Restaurant in Nava, Coahuila  to train Pancho's horse. as Chevo was meeting with Miguel Treviño. Moreno almost scoffed at the prosecutor when asked, "Of course I did not tell him it was drug money that would be stupid", Moreno said he and Cuéllar would see Miguel Treviño and Omar Treviño 2-3 times per month. However, that schedule would interrupt as the Zetas leaders would “disappear” for months and then reappearing.

He testified about a race they watched on a computer screen at Miguel’s ranch in Piedras Negras, about watching it with; Miguel, Omar, Lazcano, Comandante Carlitos and Cuéllar.

Héctor Moreno said he was familiar with money paid to fix the 2010 Labor Day Mr. Piloto race at Ruidoso Downs in New Mexico. He usually paid New Mexico horse expenses to Nayen from the sale of Miguel’s and Omar’s kilos sold in the States.

On Monday morning, the jury viewed the race tape. The courtroom watched and it definitely appeared Mr. Piloto was the horse left the gate late, not the other horses as everyone had been lead to believe from Poncho Cuéllar's and Gerardo Mata Morales' testimony last week. Mr. Piloto veered way over to the rail for some reason then ran an incredibly fast race, winning by a nose. Moreno said, "All I know money was given to gate keepers and people around the gate area."

Things were getting bad for Moreno beginning in 2010, There were huge losses of drugs in 2010-2011 seizures. They attributed blame onto Poncho Cuéllar and he had to pay a year's salary to make up for some losses. "Lots of people in Piedras Negras and around there were getting killed," Moreno said. “They started killing entire families  300 plus in Allende and Piedras Negras ,” Moreno testified. “The Zetas wanted to kill me and nobody was trusted not even Poncho Cuéllar at that time, nobody”.

One of scores of homes destroyed and hundreds killed during Zetas
rampage in Allende, Piedras Negras and other cities that Moreno testified to

People began crossing over, going to the U. S. government for protection. So in March 2011, I contacted José Vásquez and used his lawyer. “Within about ten days, I flew to El Paso and ended up in Dallas." He says he has talked to various agents about 50 times and signed so many papers that he can't keep it all straight.

Defense attorneys argued against the credibility of both Moreno and Cuéllar, after all they are both presently incarcerated on drug trafficking charges. Attorneys pointed out that the witness’s testimony should be called into question because it was made based on a plea agreement.

Cuéllar and Moreno testified wearing prison garb as they explained to jurors the operational structure used by the defendant José Treviño and his Zeta Leaders brothers to launder drug funds through the horse racing front. Zetas Trafficked drugs from Colombia and Venezuela to the United States, then transferring profits back to Mexico using wire transfers, cambios and various banking schemes. Additionally, the group utilized front companies such as the one that led to the downfall of José Treviño and his co-defendants, Tremor Enterprises, the Oklahoma operation that bred, raced and sold quarter horses.

Defense attorneys then presented to the court copies of Mexican warrants depicting the Moreno and Cuéllar are wanted in Mexico on murder and kidnapping charges. The warrants were dated July 25, 2012, and were initiated in Piedras Negras, Coahuila. Defense attorneys stated that the warrants were confirmed as to validity, and that a full report will be presented to the court next week. The warrants reveal a witness’ declaration in the case. In the witness’s account he states that Moreno and Cuéllar kidnapped him in a white van, duct taped his eyes, and tied his hands and feet. The captors began beating the victim accusing him of stealing jewelry. He continues the story by saying Moreno and Cuéllar then pick up three other men, who were beaten to death with mallets.

Defense attorneys contend that in light of Cuéllar and Moreno testifying they fled Mexico because Zetas were on the hunt for them to kill them, the warrants paint a much different picture of the truth behind the reason they fled. Defense attorney Williams stated, “I think it is important to know what agreement the men have with the US government. Alfonso Javier Del Rayo 46, he took the stand to give his personal account of the events that began in the wee hours of a December day in 2010.

Alfonso was a wealthy Veracruz real estate mogul who was on his way home from a bar in the early morning, when he was kidnapped by a group of 15-20 men. He was taken to a “safe house” where his nightmare began in earnest. While being held in the safe house he was brutally beaten by the rifle stocks of AK47’s, to the point he did not expect to survive. His captors identified themselves as Zetas, demanded 50 million pesos. Alfonso did not have that amount of money readily accessible, which he told to his captors. They continued to beat him so badly, his fingers were broken and his head reflected the many injuries from the AK47s. He would require plastic surgery to alleviate the damage.

Alfonso (above left) testified, “They beat me us pretty bad, I thought I would be killed”. After nine days of capture and torture, and without explanation, Alfonso was released without payment of ransom. While he was hospitalized, Carlos Nyan contacted the witness. Nayen, is a man central to Zetas money laundering schemes with close ties to the horse racing industry. Nayen told Alfonso he was bringing Guillermo Herrera, the state secretary of communication over for a chat about payback.....continues on next page... 

Herrera was at that time working for Veracruz governor Javier Duarte, but he had been given the position by former governor Fidel Herrera Beltrán.

In the first week installment of this trial series contains information about Fidel Herrera’s candidacy being funded by Zetas, with 12 Million dollars of organized crime funds being diverted towards the campaign when Zetas were with the Gulf Cartel. Many speculate that it was Fidel Herrera that facilitated the transaction, something he has denied.

After the meeting with Alfonso, it was explained to him that Herrera’s “Boss” saved his life, and as payback for that courtesy he would have to travel to Oklahoma in a couple of days and purchase a horse.

Alfonso did as instructed and traveled to Oklahoma meeting with, Carlos Nayen, Antonio Nayen, and horse aficionado/buyer, Fernando Solís García. They drove to meet with Tebow at Heritage place for the purchase, where he was under constant surveillance by the trio as they coached Alfonso on how to bid for the horse named “Blues Ferrari”.

Alfonso successfully bought the horse for 310k without knowing it was for José Treviño’s company, Tremor Enterprises.

Before Del Rayo could recover from the episode, Carlos was back within three months, saying things were bad and he needed 10 million pesos for horse related business. As Del Rayo was trying to figure out how to possibly accomplish the demand, threats kept coming. He sold property and ended up giving $150,000 in 3 checks of $50,000 in person to Tyler Graham, owner of horse care facility ranch named Southwest Stallion Station.  Graham is grandson of Dr. Charles Graham, co-owner of Heritage Place.

When things couldn't get much weirder, Carlos Nayen called and said he wanted to invite him to his wedding Dec. 3, 2011, the bride's father, whom Del Rayo had known for years, called, urging him to attend the wedding. "He (the father) didn't have any idea of the situation," the witness said. "I just went."

At the wedding, he saw Guillermo Herrera, who introduced him to Colorado Cessa.

Carlos called for more money, but this time Del Rayo told him he was flat broke and it was impossible. Strangely, Nayen lent him 2 million pesos, which was deposited into a Banamex account. The next time he called, Nayen was feeling political, and asked him to please use the money he lent him to donate to Guillermo Fidel Herrera's political campaign.

In 2012, both Nayen and Del Rayo were indicted in the money laundering trial. Carlos forced Del Rayo to turn over his keys to his house in San Antonio while Nayen sorts out his legal problem.

At no time did the witness ever feel he could say no. The case against Alfonso Javier Del Rayo was dropped as soon as he explained details of the story to authorities.

Jeff Tebow, the general manager of Heritage Place, “Where Champions are Sold”,  testified remembering José Ramiro (Gordo) Villarreal a purchasing agent of higher quality horses being replaced by Carlos Nayen. Ramiro is the man Miguel Treviño called Gordo and who was the original owner of Tempting Dash. Gordo turned DEA informant and was ordered executed by Miguel. What remained of his body was found outside Nuevo Laredo in his burned out vehicle in 2010.

Tebow testified he was at Heritage Place when “very beat up” man unknown to him paid for his purchase of “Blues Ferrari”. The purchaser was Alfonso Javier Del Rayo Mora. Tebow testified that he used his cellphone to take photos of the man, who was struggling to write two checks, primarily because he didn’t know him.

At time he was quoted as saying; 

"The International demand for the Racing American Quarter Horse is unbelievable,” Tebow said. Blues Ferrari, a 3-year-old full brother to World Champion Blues Girl Too, topped the sale late Saturday when Alfonso Del Rayo gave the final bid of $310,000. The 2010 Golden State Million Futurity (G1) finalist sired by Corona Cartel was consigned by Tyler Graham – Southwest Stallion Station, Agent.”

Adán Farías was a trainer at Los Alamitos Racetrack, which is about 1.5 hours’ drive from Del Mar California.  He is testifying, pleading for a lesser charge.  His company is LA Horses.  He knew of Fernando García as a horse expert, and also knew Ramiro Villareal.

Carlos Nayen called him to train some horses. Later he brought 10 horses for him to train. Among the horses he remembers is Jaguar, Blue Choice, and Number 1 Cartel, Jess Perry, Down Dash.

He notice Carlos paid in increments less than 10,000 breaking up payments, though it did not matter to him..

Carlos Nayen wanted him to meet his boss who he referred to once as "40."  On July 22 he flew to San Antonio where he was picked up by Nayens' friends and they crossed into Mexico.

The witness is not gun savvy and was clueless to who he had met. He went home to California; and immediately fell asleep after the long day.  The next day, he tells the jury, he googled Zeta 40....and discovered the man he met in Mexico called “40”, was one of the top leaders of Los Zetas cartel.

The witness was banned from racing for two years because his horses tested positive for a banned substance.

Witness Brian Schutt is an urban police officer Waco Treasure Task force for 20 years.

Brian works closely with multiple government agencies, by following the money in cases of government interest. He grew up on a quarter horse farm. He has worked for two years on José Treviño's money laundering trial investigation. His role was to investigate everything about the horses very closely. He procured search warrants for seven locations and issued more than 200 subpoenas.

His job was tracking the horses through ownership, boarding, races, vet care, training, insurances, and death certificates. It is tedious, painstaking work. He spent more than 1000 hours on these horses. Brian showed that when Blues Ferrari was bought, the horse was registered to Fast and Furious with another name “Blues Man Can” for $50,000. Then it was registered as Blues Ferrari with Carlos Nayen as owner.

From Oct. 2010 the horse was listed as Blue Ferrari with Tremor Enterprises as owner, until Mr. Alfonso Javier Del Rayo was forced to buy it for $310,000.

Witness Arian Jaff testified he is employed by a San Diego company that makes quick money loans.  Judge Sparks heard Jaff’s testimony to determine if it would be admissible.

Jaff said in  2012 he was present at a meeting with Pancho Colorado Cessa, the Mexican businessman that is a co-defendant in the Austin Texas trial. Jaff says the meeting was at the office of an executive of the Mexican state owned oil company, Pemex. At the meeting Jaff testified, Cessa discussed sending five million dollars to an account an Pemex executive agreed to set up in the US.

Jaff testified he did not know what the money was for.

In a blow against prosecutors, Judge Sparks ruled against allowing the jury to hear the testimony about the five million, primarily because Jaff testified he did not know what the money was for. Cessa made a fortune by gaining the majority of Pemex contracts awarded in Veracruz, Cessa acted as the liaison between one of the Zetas founders Efraín Teodoro (Z14) and the man that would become governor, Fidel Herrera Beltrán.

In his testimony Jaff spoke of Cessa being “one of the most important Pemex contractors”. Arian Jaff said he met Cessa at a Pemex convention, Jaff was invited to Colorado Cessa's golf tournament and a visit to his Veracruz ranch.

Jaff's testified that Colorado Cessa grew to be good friend and mentor , but also an important client , “He was the real deal, basically the person you wanted to meet if you wanted to do business in Pemex”.

Defense attorneys for Cessa in opening arguments, exhibited a chart revealing that Cessa received $465 million in Pemex contracts since the early 2000's. Arian Jaffe testified to three loans he secured for Colorado Cessa.

1.  Feb, 2011, $500,000 at 14% paid off early in Dec. 2011 so the interest went to 7% May, 2011, Cessa wanted $1,000,000 but received $850,000 at 15%

3. Nov. 2011 last loan was for 1.7 million

In November, 2011 Cessa called late in the evening, he seemed more desperate saying he urgently needed a one month loan because and was having liquidity problems and would give Jaff 10% interest.

When he saw Cessa that November he appeared unshaven, and was accompanied by heavy security including 5, though Jaff said, "isn't that unusual for Mexico." In conclusion Cessa was increasing worse financial shape after a second suspension from Pemex; he was no longer allowed to bid for Pemex contract. Before standing trial for conspiracy to launder money for Los Zetas, Cessa was living in Houston because he was having security issues.

Michael Fernald testified. Fernald is a Special investigator to the IRS, Ex- Army, CPA masters in accounting, specialist in wire fraud and criminal violations of code. He analyzed bank statements from Miguel Treviño Morales, Zule Farms, Tremor Enterprises, and Colorado Cessa’s ADT Petrolservicios and analyzed six bank accounts at UBS.

Requested information three times in 2012 from Mexico but they never complied.

The records for Cessa are incomplete because they lack the information from Mexico such as source material, i.e. real cancelled checks.

The investigator prepared a visual aid of the paper trail depicting highlights of Cessa's company ADT Petrolservicios from 2001-2010 including 18 million from Efraín Teodoro “Z-14” Torres, and two million for the payment of a rig in 2001. And a $50,000 deposit into the Frost Bank in Houston. This was the first of four deposits that showed his wife was living on that account in Houston.

Cessa was co-mingling accounts and didn't have enough money to sustain both his business and the horse racing business. The defense argued that it is not complete enough to depict an adequate representation.

The Treviño Morales financial analysis is based on 8 bank accounts, three personal accounts, two Tremor enterprise accounts, 2 Zule Farms, 1, 66 Land account.

The analysis was on Excel spread sheets tracking all deposits coming in and all expenses going out including all wages and social security statements.

From 1990-2009; there was $452,359 in earnings from both José Treviño and Zulema an average of $22,000 a year. From 2009-2012; there was 2.1 million dollars in average cash flow.

The next witness was Kyle Mori DEA Task Force, Orange County, California.

On March 27, 2012-Agent Mori was tipped off by Cypress, California (adjacent to Los Alamitos) officers that Miguel and Omar Treviño, were at Los Alamitos race track. 12 officers searched the stables and track attempting to capture the wanted men.

Agents sealed exits, and ultimately they did not apprehend the Treviño brothers but captured Carlos Nayen and Felipe Quintero together in one car and Luis Aguirre in another.

Witness Raúl Guadalajara Guía is a 39 year old drug trafficker and a Texas native, born in San Antonio.  

He worked for Poncho Cuéllar's (on left) crew since 1993 moving marijuana until he got busted and pleaded guilty to lesser drug charges. He was released and resumed working for Cuéllar bringing kilos of coke into the US for three or four years. Guadalajara trafficked drugs from Piedras Negras to either San Antonio or Dallas depending.  He was set up first with 5 kilos of coke and then 2 kilos of cocaine.  Guadalajara is once again cooperating witness hoping for a lesser sentence. Guadalajara has been talking to agents and providing testimony since late 2011.

With the money they received from selling drugs in the US, they first had to get rid of any bills with a mark because Cuna, 40's accountant, didn't want any bills with marks.  Then they separated them into denominations of 20s, 50s, and 100s.

While at Miguel Treviño’s ranch watching the streaming of the All American Futurity Race, the witness said Miguel told him they'd spent 4 million on horses and gave money to gate keepers for Tempting Dash to win the race. At seeing José in the winner's circle the witness told of Miguel remarking, "My brother who gets up at 5 AM, could never have imagined himself in this horse world." The witness testified Miguel said he put horses in the names of others, and used fake documents.  If horses do badly, they sell them cheaply to José because it was a way to clean money.

The witness said he knew Huitrón and Isabel Huitrón who also raced horses, but he did not know Jesús. He met Huitrón racing horses in Morelos.  He told of one time he had to bring Chevo Huitrón some money from drugs he sold to pay for training. At that time, he had a new driver who made a crack about a kilo of coke.

Chevo didn't like that at all. Within thirty minutes the witness said Cuéllar called saying Miguel wanted him to bring the driver to rough up.  Cuéllar explained the man "was new and would get spoken to".

Guadalajara never had met or talked to Colorado Cessa though he had seen him talking to Miguel at a race in Morelos.

At auctions, Carlos Nayen and Miguel would communicate using their Blackberries and Nayen would signal the bidder to go up or stay. Miguel studied pedigrees of horses and followed races on the internet by logging onto Cool Live and using Cessa's account and password. Guadalajara told the jury, "Yes, 40 (Miguel Treviño) got the information off his Blackberry. Yes, they communicated with each other on their Blackberries, he showed me naked pictures of 40 he had on there."

Without missing a beat, defense attorney Mike Magurin said, "I don't know about naked photos but you saw Colorado Cessa...?." He said, "No he was not there, I saw him at a couple races once at la Ilusion where he was watching horses run and guiding 40 to pick some horses." But the witness said he never spoke to him and is adamant that it wasn't the day they all watched the race on the internet.

When the witness was accused of being high up in Los Zetas the witness spat, "I sold drugs for them; I am not one of them.

IRS agent Billy Williams was the last witness to testify in week two. Williams testified that on the day Fernando Solís García inaugurated his quarter horse training company in 2008, he spent the day driving around from bank to bank making structuring deposits. Structuring deposits are those less than ten thousand dollars, which thereby avoid IRS reporting by financial institutions.

He made a total of 81,000 dollars by making nine deposits at different branches of the same bank. Agent Williams said in his investigation, García and several other people used structuring deposits to launder money for the Zetas. Structuring is a crime in of itself.

García, José Treviño, Miguel Treviño, Cessa, Jesús Huitrón, and his brother Eusebio  Huitrón, are co-defendants in the money laundering trial. Agent Williams, said structured deposits were used to deposit in the commercial bank account of Jesus Huitrón, an Austin home builder.

Testimony concluded on Thursday for the second week of the trial, Friday was a dark courtroom.

"Mamito" takes the stand in week 3.

Sources to write this article: Notes from the courtroom, and Stallion Search