The Rookie and the Zetas: How the Feds Took Down a Drug Cartel's Horse-Racing Empire

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Lawson moved out of his extended-stay hotel and into a house in Laredo, not far from some of the Treviños' extended family, he says. He came to appreciate the camaraderie of working the border, a destination so low on agents' wish lists that the bureau lets them transfer wherever they want after five years. Most of the agents were young and single, since no one with any seniority lasts, and the bosses nurtured a culture that felt more like a cop shop than a federal bureau, with a loose dress code and looser language. They played poker and went to happy hour when they could.

The FBI agents felt some kinship with those from the other federal agencies in Laredo, which all share an office. There was also competitiveness, though. They were all chasing Zetas, whose fight with the Gulf Cartel had grown so violent that agents sometimes went to the border to listen to gunfights.

The Drug Enforcement Administration had even done some digging into the horse-racing business, hoping it would lead to Miguel Treviño. They'd developed a great source of their own: Ramiro Villarreal, the Zeta associate who'd discovered Tempting Dash, among other horses. The DEA had detained him at the airport in Houston and he'd agreed, reluctantly, to cooperate. But soon after, he stopped showing up at auctions and races. According to his friends, who spoke with The New York Times, he was summoned to a Mexican safe house, where Miguel Treviño asked if he was snitching and threatened to kill him. His body was eventually found by the side of a road in Mexico, inside a burned-up car. (The DEA declined to make agents with ties to the case available for interviews.)

Without Villarreal, Lawson figured, the DEA wouldn't have much interest in horse racing. He liked it that way. Without another agency turning up the heat, he had more time to work sources (like Graham) and targets (like José Treviño). But in February 2011, word came of something Lawson knew would rightfully ignite the DEA's interest in the Treviño family.

Two Homeland Security agents from Laredo, Jaime Zapata and Víctor Ávila, had been driving a black SUV down a highway that cuts through the heart of Mexico. A truck full of Zetas sped alongside them and forced them off the road. Zapata and Ávila tried to tell them they were U.S. diplomats, but the gunmen forced their way into the car and opened fire. Zapata died, the first U.S. law enforcement agent to die in Mexico's drug wars in 25 years.

Zapata's death sent agents across Texas hunting for anyone with Zeta ties, a parade of door-knocks and who-do-you-knows. Lawson, who'd occasionally seen Zapata in the office gym, understood the need to send the Zetas a message, but he worried the DEA's tree-shaking might interfere with his case. He craved the status quo.

He didn't get it. Shortly after Zapata's death, a DEA task force knocked on the door of José Treviño's tidy red-brick home outside Dallas, its windows barred and its perimeter ringed by a simple chain-link fence. The agents wore protective vests, ready for a fight, but found instead a portrait of domesticity: A teenage son answered. The agents shuffled the family into the kitchen while they searched the house. They were there for 45 minutes and found nothing — no money, no guns, no drugs. Off they went to shake another tree.

Every few weeks, Lawson would meet up with Graham. They would slip into hotel rooms, restaurants and bars around Austin — safer than Lawson being seen at the ranch — and compare notes. Lawson, at least, recalls the meetings fondly, especially the one when they caught each other mouthing lyrics to an old-school rap song, two country boys embracing their dudes-of-the-90s roots.

Graham stood out from Lawson's other sources in one important way: He was still part of the conspiracy. To prove money laundering, the feds would have to show that the money used to buy and care for the horses was drug money, and that everyone knew it was drug money. Other informants could help make the link, but they came bearing caveats. One was a high-ranking and murderous Zeta, nickname El Mamito, who the feds had extradited (but later cleared) in connection with Zapata's killing. The others were former traffickers who'd worked the Zetas' supply chain between Piedras Negras and Dallas. They were all looking for a deal — a reduction of sentence, usually, though one trafficker, who admitted moving five tons of cocaine a year, avoided prosecution altogether.

Together, their stories helped connect drug money to the horse operation. The supplier in Mexico was a close associate of Miguel Treviño. Usually he would call and tell the Dallas boss when to expect a shipment of coke. Sometimes, though, he called with different instructions: Take $80,000 to Retama Park, the race track in San Antonio. Take $100,000 to Lone Star Park. Take $100,000 to the Walmart in Balch Springs and drop it with 40's brother José.

It was great intelligence, but it was jailhouse intelligence from guys looking for a few years off the top. So Lawson leaned on Graham, and Graham delivered.

At the agent's urging, Graham eventually convinced José Treviño to breed Tempting Dash at his grandpa's ranch. Lawson knew Graham's participation meant he got to keep boarding and breeding valuable horses and taking Treviño's money, as well as breed some of his own mares with Tempting Dash. But he believed Graham was doing it for other reasons — to keep the feds on his good side, and to make things right. Eventually, Lawson even asked Graham to let the FBI listen in on his calls. He had been hesitant to ask, wary about chasing Graham away. But Graham quickly agreed. Shit, Lawson thought, I should have thought of this a long time ago.

Later, Treviño fell behind on some payments — farm fees, boarding fees, things like that. Graham was pushing him to pay up. Then, one day, he got a call. If you want the money, the caller said, you can pick it up in Laredo. I'll send someone, Graham said.

The day of the exchange, Lawson and a dozen other agents set up shop around a verdant plaza in front of the La Posada Hotel, not far from the bridge to Mexico. An undercover agent, posing as one of Graham's laborers, waited in a truck for the money, a recording device stuffed in his pocket. When the delivery didn't come, he called back the number: Hey, where's that money?

There was a problem, the guy said. He'd strapped the cash to some female money mules, but one of them was detained at the border. She'd be fine, the guy said — he'd only given them $9,900 each, so they weren't legally required to declare it. But it might be a while.

An agent rushed to the bridge and urged the guys at checkpoint to let the woman go, Lawson says. They did, and soon enough Lawson watched as a guy, dressed in a red jacket as promised, appeared on foot and then handed the undercover agent $55,000 in cash. Lawson met Graham in a parking lot and delivered the cash. There were horses to feed.

The feds identified the courier as a Zeta associate and kept tabs on him. Once, they tracked him as he took a cab from the border to Graham's ranch near Austin, to pick up vials of Tempting Dash's semen. Another time, agents noticed that he planned to fly to Oklahoma City, so they tailed him to a parking deck, where he met up with José Treviño. Then they stopped Treviño and found $5,000 in cash. According to Lawson's sources, the courier dutifully reported all of this to Miguel Treviño. Soon after that, the courier was killed.

Through it all, Tempting Dash kept breeding, and Graham kept trying to collect his fees, complaining in call after call to Zeta associates that they were behind on their bills. Graham had to bills to cover himself, he said, like for the $70,000 he'd just paid for ten 18-wheelers' worth of alfalfa.

"Damn," one of the Zetas' horsemen said. "That must be a shitload of alfalfa."

"It is, but hell, you got this many horses around here and it's so dry — I gotta have it."

Sometime in 2011, though, Graham started to tell Lawson about a development even more troubling to both of them: José Treviño wanted to start his own breeding farm.

What had started with one horse had evolved into an operation that by the feds' count included as many as 500, spread across stables in Texas, New Mexico, California and Oklahoma. (By coincidence, many of their names included the word "cartel," which is common in horse racing.) IRS investigators, working among towers of boxes out of a war room in Austin, had subpoenaed thousands of records from auction houses, race tracks and other sources. They traced the money through the horse-racing industry and into several front-companies operated by José Treviño, ultimately following it into his checking account. In 2010, the year after he got Tempting Dash, he deposited $1 million into his account. The next year he deposited $2 million.

As the operation grew, it became more brazen. When one horse wasn't performing, Zetas kidnapped a rich real estate developer in Mexico and forced him to fly to Oklahoma to buy it from them. They'd beat him up good, so everyone noticed when the man with the busted face kept bidding on the horse with the mangy coat, eventually paying $330,000 for a horse everyone agreed wasn't worth $75,000. When Tempting Dash was diagnosed with a blood disease and briefly quarantined by the Texas Animal Health Commission, José Treviño asked Graham whether they could send the commission a couple hundred thousand dollars to get the horse back.

Treviño was also becoming a more confident horseman. Once a breeding novice with endless questions, he was now prone to debating Graham on the finer points of mating horses, Lawson says. And now he wanted to start a ranch of his own. He was eying property in Oklahoma, with plans to hire breeding experts and erect a state-of-the-art facility, complete with industrial lighting that would trick the horses into thinking it was breeding season. He still had to build it out, but eventually he could move hundreds of horses there. On the one hand, this development proved to Lawson how central Treviño was to the operation. But it could also cut off Lawson's best source of intelligence: Graham.

I thought we had something good going, Graham told Treviño.

I want to prove I can do this on my own, Treviño replied.

Not long after that, the first horse trailers showed up.

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Joe Tone
Contact: Joe Tone