By Tim Gaynor
(Reuters) - A federal jury in Texas convicted the brother of two alleged leaders of Mexico's Los Zetas drug cartel of setting up a racehorse enterprise to launder millions of dollars in illicit profits, authorities said on Thursday.
The jury found Jose Trevino Morales, 46, guilty of one count of conspiracy to commit money laundering, the U.S. Attorney's Office for the Western District of Texas said in a statement.
Prosecutors said Trevino Morales is the brother of alleged Zetas leaders Miguel and Oscar Omar Trevino Morales. Both men were named co-defendants in the case and are at large.
The jury also convicted Mexican businessman Francisco Colorado Cessa, 52, horse trainer and purchasing agent Fernando Solis Garcia, 30, and 49-year-old horse trainer Eusevio Maldonado Huitron.
The Zetas gang was formed in 1998 by 14 former Mexican soldiers. The cartel's multibillion dollar drug trafficking, kidnap and extortion empire reaches from Central America to the United States, authorities say.
"This trial documented the violence, brutality and corruption generated by Mexican drug cartels, in this case the particularly ruthless Los Zetas," U.S. Attorney Robert Pitman said in a statement.
"The government was able to show how the corrupting influence of drug cartels has extended into the United States with cartel bosses using an otherwise legitimate domestic industry to launder proceeds from drug trafficking and other crimes," Pitman added.
Trevino Morales and the other defendants were accused of setting up "Tremor," a horse breeding operation. Prosecutors said the defendants purchased a horse ranch in Oklahoma, bought several hundred horses, and managed to win several substantial races, including the All American Futurity, the major competition on the quarter horse circuit.
The Zetas' money was stashed in race horses, some of which were given not so subtle names like "Big Daddy Cartel" and "Morning Cartel," according to court documents.
An FBI affidavit claimed that at one point, Los Zetas was funneling $1 million a month into the horse operation.
The four defendants face up to 20 years in federal prison on sentencing.