Mexican Drug Cartel Linked to Money Laundering through Horse Racing

[zerosum79]

Would love to see how horse racing proponents view this, especially in light of the fact that Poker online is vilified as a haven of potential money launderers.

Seven arrested in alleged Mexican cartel scheme to launder money in horse racing

http://www.cnn.com/2012/06/12/justic...html?hpt=hp_t2

(CNN) -- Seven members of Mexico's Zetas cartel were arrested Tuesday after a U.S. indictment accused a total of 14 cartel members of laundering drug money through the breeding and racing of American quarter horses in the United States, authorities said.

Los Zetas leader Miguel Angel Trevino Morales, 38, and his two brothers were named in the federal indictment, and brother Jose Trevino Morales, 45, and his wife, 38-year-old Zulema Trevino, were among the seven arrested, federal authorities said.

The 14 defendants were charged with a conspiracy using horse racing and breeding to launder the cartel's drug money, authorities said.

.......

zero

[Grasshopp3r]

There is some fact to the meme that online poker has been used for money laundering. However, it is moot amongst all of the forms of money laundering methods in the world.

Horse racing is dead due to its high operating costs, lack of betting and overall lack of interest. Nothing will revive horse racing to its prior glory.

[lawdude]

I really DON'T believe that online poker has been used for any serious money laundering (other than to the extent one defines online poker as illegal and its proceeds as ill gotten gains).

But I don't think that some people here get the point of the money laundering argument.

The money laundering thing was a response to people who swore that the only reason the DOJ went after online poker was because they were a bunch of moralistic bluenoses in thrall to the religious right, and that if we just had some more reasonable people in the department, online poker in its pre-BF state (i.e., offshore, unregulated international poker sites) would have survived indefinitely.

That is not correct, and one reason it is not correct was because of the CONCERN about money laundering that resulted from so much money belonging to ordinary middle and working class people who never had access to the international financial system before flowing offshore and being banked by unregulated poker sites.

It wasn't that poker sites WERE money laundering; it's that they presented an opportunity for it.

This was one of the reasons (along with underage play and protecting the power of states to enforce prohibitions on gambling) why the DOJ was going to shut down the pre-BF status quo no matter who ran it.

[Doc T River]

Shameful, just shameful. We should just shoot the horses so they'll learn the lesson of not taking part in an activity where someone could be doing something illegal.

[jackaaron2012]

Also, I think it would be hypocritical of any poker player to hope that the same things happen to horse racing online as happened to poker.

[TeflonDawg]

Originally Posted by lawdude

But I don't think that some people here get the point of the money laundering argument.

The money laundering thing was a response to people who swore that the only reason the DOJ went after online poker was because they were a bunch of moralistic bluenoses in thrall to the religious right, and that if we just had some more reasonable people in the department, online poker in its pre-BF state (i.e., offshore, unregulated international poker sites) would have survived indefinitely.

Everyone gets it, strawdude. We understand that if there's an exposable loophole in the financial system it must be sealed before non-harmless activity begins.

On top of that, you keep regurgitating the same tired straw man argument as if you know something we don't when every single one of us knew BF was going to happen in some form or another.

We all know the UIGEA and it's aftermath had nothing to do with morality or tax evasion. They're merely ancillary talking points to the real issue.

There's really not much to discuss anymore. The gov't is being either dumb or deliberately obtuse in favor or special interests, and the DOJ is merely an extension of that, as they are being either dumb or deliberately obtuse in the manner in which they "uphold the law".

[lawdude]

Originally Posted by TeflonDawg

Everyone gets it, strawdude. We understand that if there's an exposable loophole in the financial system it must be sealed before non-harmless activity begins.

On top of that, you keep regurgitating the same tired straw man argument as if you know something we don't when every single one of us knew BF was going to happen in some form or another.

We all know the UIGEA and it's aftermath had nothing to do with morality or tax evasion. They're merely ancillary talking points to the real issue.

There's really not much to discuss anymore. The gov't is being either dumb or deliberately obtuse in favor or special interests, and the DOJ is merely an extension of that, as they are being either dumb or deliberately obtuse in the manner in which they "uphold the law".

1. A LOT of posters on 2+2 (you were not one of them, to be sure) DID basically deny that there was a problem with the status quo pre-BF. These were the people basically trashing the PPA for pushing for a poker bill.

2. A LOT of posters on 2+2, pre- and post-BF (and even to this day), continue to believe that the attack on online poker was a result of moralistic condemnation of poker.

3. The current situation has SOMETHING to do with special interests (definitely there's a lot of lobbying on both whether there is going to be a poker bill at all and the shape of it), but special interests ARE NOT the reason we are in the situation we are in. We are in that situation because the DOJ was not going to continue allow offshore unregulated online poker, because of the issues of money laundering, underage play, tax evasion, and the circumvention of state gambling laws.

4. I don't really think that every possible route of money laundering should or even can be plugged. The reality is that the same way that the internet made obscenity laws more difficult to enforce, and gambling laws, and sales tax laws, and various other laws, it also just by its very nature increases opportunities for money laundering. There's nothing that can really be done about that fundamental problem.

But as a descriptive matter, the DOJ is going to respond to this by trying to make as many international financial transactions as possible run through authorized channels. And the process we are now going through will ensure that online poker funding transactions move through those channels.

5. I would put my knowledge of the legal situation that poker faced and faces up against anyone here. My record here has been extremely good and many ostensible legal experts here have been wrong on issues I turned out to be right about.

[PokerXanadu]

Originally Posted by lawdude

1. A LOT of posters on 2+2 (you were not one of them, to be sure) DID basically deny that there was a problem with the status quo pre-BF. These were the people basically trashing the PPA for pushing for a poker bill.

2. A LOT of posters on 2+2, pre- and post-BF (and even to this day), continue to believe that the attack on online poker was a result of moralistic condemnation of poker.

3. The current situation has SOMETHING to do with special interests (definitely there's a lot of lobbying on both whether there is going to be a poker bill at all and the shape of it), but special interests ARE NOT the reason we are in the situation we are in. We are in that situation because the DOJ was not going to continue allow offshore unregulated online poker, because of the issues of money laundering, underage play, tax evasion, and the circumvention of state gambling laws.

4. I don't really think that every possible route of money laundering should or even can be plugged. The reality is that the same way that the internet made obscenity laws more difficult to enforce, and gambling laws, and sales tax laws, and various other laws, it also just by its very nature increases opportunities for money laundering. There's nothing that can really be done about that fundamental problem.

But as a descriptive matter, the DOJ is going to respond to this by trying to make as many international financial transactions as possible run through authorized channels. And the process we are now going through will ensure that online poker funding transactions move through those channels.

5. I would put my knowledge of the legal situation that poker faced and faces up against anyone here. My record here has been extremely good and many ostensible legal experts here have been wrong on issues I turned out to be right about.

Kudos to your points. However, don't discount the "moralistic condemnation of poker" factor. This is a key factor in the Republican plank and in the anti-Internet gambling sentiment on Capitol Hill, where it exists. And there is definitely a block of votes in Congress which will always vote the anti-gambling line based almost solely on the "moral issue". Hopefully that block will never grow enough to pass a complete prohibition of Internet gambling in the U.S.

[lawdude]

Xan:

I agree that there's a base of support for anti-poker efforts from the morals crowd. That makes it harder to pass poker bills and helped pass UIGEA. I've never denied this, and it means we have to fashion a majority out of the rest of the country.

It's not the reason the DOJ went after offshore online poker, but it's nonetheless a big obstacle.

[TeflonDawg]

Originally Posted by lawdude

1. A LOT of posters on 2+2 (you were not one of them, to be sure) DID basically deny that there was a problem with the status quo pre-BF. These were the people basically trashing the PPA for pushing for a poker bill.

2. A LOT of posters on 2+2, pre- and post-BF (and even to this day), continue to believe that the attack on online poker was a result of moralistic condemnation of poker.

Another straw man. My post states in its first sentence that we all understand that the DOJ has to do their job. You keep espousing this point as though the readership of the PL forum = NVG.

Originally Posted by lawdude

3. The current situation has SOMETHING to do with special interests (definitely there's a lot of lobbying on both whether there is going to be a poker bill at all and the shape of it), but special interests ARE NOT the reason we are in the situation we are in. We are in that situation because the DOJ was not going to continue allow offshore unregulated online poker, because of the issues of money laundering, underage play, tax evasion, and the circumvention of state gambling laws.

The current situation has EVERYTHING to do with the UIGEA, and the UIGEA was a direct result of special interests. Yes, the DOJ did their job. Yes, FT, PS, and Cereus circumvented laws, effectively asking the DOJ to do their job. You bet the symptom, I raise the source.

Originally Posted by lawdude

4. I don't really think that every possible route of money laundering should or even can be plugged. The reality is that the same way that the internet made obscenity laws more difficult to enforce, and gambling laws, and sales tax laws, and various other laws, it also just by its very nature increases opportunities for money laundering. There's nothing that can really be done about that fundamental problem.

Regardless, what the DOJ is complicit in and the gov't has already done is effectively analogous to shutting down an entire city of streets just because a few intersections have malfunctioning lights, when all you had to do was maintain and/or upgrade the lights, without shutting down the whole city.

Originally Posted by lawdude

But as a descriptive matter, the DOJ is going to respond to this by trying to make as many international financial transactions as possible run through authorized channels. And the process we are now going through will ensure that online poker funding transactions move through those channels.

You mean, they might actually finally ask Congress to regulate the industry so all these international financial transactions operate 100% above-board like they were pre-UIGEA? Nice, it only took them ten years and hundreds of billions in tax-payer money and tax-payer-funded manpower!

It's probably not what you mean, but I'm sure you see my point.

Originally Posted by lawdude

5. I would put my knowledge of the legal situation that poker faced and faces up against anyone here. My record here has been extremely good and many ostensible legal experts here have been wrong on issues I turned out to be right about.

cool story bro

[CountingMyOuts]

Originally Posted by lawdude

3. The current situation has SOMETHING to do with special interests (definitely there's a lot of lobbying on both whether there is going to be a poker bill at all and the shape of it), but special interests ARE NOT the reason we are in the situation we are in. We are in that situation because the DOJ was not going to continue allow offshore unregulated online poker, because of the issues of money laundering, underage play, tax evasion, and the circumvention of state gambling laws.

The current situation has EVERYTHING to do with the special interests. The DOJ played their part, just like Senator Frist and his cohorts who put the UIGEA in the Safe Ports Act at the last minute. The DOJ was not driving the bus on this.

[lilwhaldo]

The only reason any of this happened was to clear the way for our own American companies to own the poker industry in America. They missed the boat, and when they finally figured it out, they made all of this happen. The only reason this flew in this country was because of all the moralists that they could use to back it. I don't think it's a coincidence that it's legal in almost every single other country in the world, but illegal here. The main difference between us and a lot of other countries? We have tons of bible thumpers who still think it's 1850.

As far as the money laundering thing goes, the justification politicians used for the UIGEA was that terrorists were using poker sites to launder money. If this was the 1980s they would have switched the word terrorists with communists. Did they ever come up with any actual evidence to back those claims up?

[Skallagrim]

Originally Posted by lilwhaldo

The only reason any of this happened was to clear the way for our own American companies to own the poker industry in America.

That was ONE of the reasons for the way things played out. It was hardly the only reason. It is almost always a mistake to think that, in the course of human events, ONE thing caused another.

Did they ever come up with any actual evidence to back those claims up?

Of course not. There isn't any.

As the horse-racing/Mexican-cartel shows, and all the savvy people at the DOJ know, most real money laundering involves hiding the source of substantial amounts of CASH. Online poker is really not an efficient means of hiding CASH. You can't send cash to PokerStars, so a would be money-launderer needs to get his cash into an account where he can electronically transfer it if he wants to move it through a poker site to somewhere else.

To be simple about it, a poker site is a very poor way to launder money unless the poker site is in on the laundering scheme (or unless you consider poker profits 'illegal proceeds' themselves).

Fear of there being a lot of illegal money being laundered through online poker is a fear of a very remote possibility.

But, this is America. And in America the fear of the very remote possibility that you may end up on a plane with a terrorist has lead to most Americans being quite complacent about government agents groping their private parts before allowing them to board a plane.

Skallagrim

[TeflonDawg]

That last paragraph in Skallagrim's post is exactly what I'm talking about in my city street lights analogy.

And the painfully ironic thing about countering terrorist-funding (lol) is the government passed the UIGEA which blatantly made the effort to do so exponentially harder. And we pay for that **** via taxes in addition to any aggravation we've suffered over the years and from Black Friday and currently. And the opportunity cost to society is off the ****ing charts. There's still a multi-billion-dollar industry yet to be borne, the boost said industry would give to other markets, and oh yeah all these idiots concerned about pathological gambling are busy arguing for prohibition when they should be for consumer protection, personal responsibility, EDUCATION, and REHABILITATION. They're either incredibly dumb or they aren't, in which case they passed it because some people with a lot of money told them to, well-being of their constituents be damned.

ETA: Forgot to add all the tax revenue they'd collect from new businesses and jobs created in the U.S. and the additional income taxes they'll collect from winning players. They'll make hundreds of thousands just from the payouts for the winner of what could be a Sunday Ten Million every freaking week.

Keep in mind this industry could've originated ten years ago. That's ten years worth of all that money I just gave examples of and instead we paid the DOJ/DHS to eradicate any possiblility. Dumb ****ing country. or corrupt, pick one.

[CountingMyOuts]

^^^ Great post.