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

Wednesday, June 13, 2012

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

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

(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.

"The allegations in this indictment, if proven, would document yet another example of the corrupting influence of Mexican drug cartels within the United States, facilitated by the enormous profits generated by the illicit drug trade," U.S. Attorney Robert Pitman of the Western District of Texas said in a statement.

Opinion: Illicit funds from Mexico find haven in U.S.

Since 2008, cartel leader Miguel Angel Trevino Morales and brother Oscar Omar Trevino Morales directed millions of dollars in drug money to brother Jose and his wife for buying, training, breeding and racing quarter horses in New Mexico, Oklahoma, California and Texas, authorities said. Jose Trevino, his wife and others disguised the ownership of the horses through the use of "front" companies, authorities said.

Among the horses that were part of the alleged laundering operations were Tempting Dash, winner of the Dash for Cash at Lone Star Park racetrack in Grand Prairie, Texas, on October 24, 2009, and Mr. Piloto, winner of the $1 million All American Futurity at Ruidoso Downs on Labor Day 2010 in Ruidoso, New Mexico, authorities said.

Federal authorities are seeking forfeiture of those race horses and others named Dashin Follies, Coronita Cartel and Separate Fire -- as well as property in Lexington, Oklahoma, and Bastrop County, Texas, and money in three bank accounts, officials said.

The indictment alleges the horse racing and breeding conspiracy raised $20 million, and authorities are seeking a monetary judgment in that amount, officials said.

The Los Zetas cartel, headquartered in Nuevo Laredo, Mexico, directly across the border from Laredo, Texas, is Mexico's largest drug cartel in terms of territory and has operations in 11 Mexican states, the indictment said.

The cartel sends thousands of kilograms of cocaine and other drugs annually to the United States, generating many millions of dollars, the indictment said.

"This case is a prime example of the ability of Mexican drug cartels to establish footholds in legitimate U.S. industries and highlights the serious threat money laundering causes to our financial system," Richard Weber, chief of IRS Criminal Investigation, said in a statement.

The five other people arrested Tuesday are Fernando Solis Garcia, 29, in Ruidoso; 26-year-old Carlos Miguel Nayen Borbolla, 32-year-old Adan Farias and 28-year-old Felipe Alejandro Quintero in Los Angeles; and Eusevio Maldonado Huitron, 48, in Austin, Texas, authorities said.

Cartel leader Miguel Angel Trevino Morales and brother Oscar Omar Trevino Morales, 36, are believed to be in Mexico, authorities said.

The five others indicted who haven't been arrested as of Tuesday are Raul Ramirez, 20, of El Paso, Texas; Francisco Antonio Colorado Cessa, 51, of Veracruz, Mexico; Victor Manuel Lopez, 31, of Nuevo Laredo; and Sergio Rogelio Guerrero Rincon, 40, and Luis Gerardo Aguirre, 35, both of Mexico, authorities said.

In small-town USA, business as usual for Mexican cartels

JP Morgan's Jamie Dimon apologises for $2bn losses - BBC News

JP Morgan Chase chairman and chief executive Jamie Dimon has apologised for the bank's $2bn (£1.3bn) losses on high-risk trades.

"We have let a lot of people down, and we are sorry," he said, testifying to the US Senate Banking Committee.

He said the losses occurred because traders were poorly managed and did not understand what they were doing.

Protesters disrupted the start of proceedings, with one man shouting, "Jamie Dimon is a crook."

Others chanted, "Stop foreclosures now," before being escorted out of the hearing room.

JP Morgan accumulated the losses when a hedging strategy, normally used by banks and investors to reduce the risk of losses, went wrong.

His testimony did not give an update on whether the bank's losses had risen beyond last month's $2bn estimate.

Volcker rule

Mr Dimon was apologetic, but said the bank remained in sound financial shape, and that the loss was an isolated incident.

"Our fortress balance sheet remains intact."

Much of the hearing is expected to focus on whether bank executives and financial regulators can spot risks before they grow to the point of damaging a bank or the banking system.

Senators are likely to ask Mr Dimon whether he believes new trading restrictions - the so-called Volcker rule - would have prevented the losses.

The Volcker rule aims to limit a bank's trading activity in order to prevent the need for any further government bailouts.

Free money fattens the Swiss bankroll - Sydney Morning Herald

Who said there was no such thing as free money?

The flight of capital in global markets has become so extreme that you actually have to pay to park your money in Switzerland, in Swiss sovereign bonds that is.

While bonds around the world offer a yield, a return on investment, the picturesque tax haven in the middle of Europe now boasts a ''negative yield'' on its sovereign debt.

Putting this in perspective, the yield on a Greek bond is 30 per cent - compared with below zero. And it still looks pricey.

The countdown is on for the Greek elections this Sunday. And as the world contemplates a possible Hellenic exit from the eurozone, or a ''Grexit'', as market parlance would have it, the region's bond markets have hit their tipping point once again.

Sharemarkets, having briefly and perversely rallied on news of the €100 billion ($125.6 billion) bailout of Spain's banks early this week - something that should have been bad news as Spain had been consistently denying its banks needed help - fell on Tuesday but recovered last night.

When the sharemarket and the bond market start telling you different things, though, it is usually the bond market which has it right. Equities are plodding along yet bonds are warning of danger ahead.

It may be that the strength in equities is precisely due to the fact that bond yields in what are deemed the safer countries are so low (about 1.65 per cent in both the US and Britain and 1.2 per cent in Germany).

And it may also be that investors are simply fed up with super-low yields. At least quality industrial shares carry a decent dividend yield, albeit with less security and greater exposure to economic downturns than bonds.

The third point in favour of shares is, as many see it, the inevitability of further radical central bank stimulus: money printing, QE3, LTRO, assorted programs to appease equity markets and ''kick the can down the road''.

This latest pricing in credit markets indicates a law of diminishing returns, though, when it comes to stimulus, and kicking that old can down that old road.

Switzerland, which has retained its currency though the 20-year euro experiment, this week for the first time ever, boasts a negative yield curve on its six-month to five-year paper.

No yield at all in other words - just the ''sleep at night'' factor; that if things turned really pear shaped in the impending contagion from a Greek exit and further wobbles in Spain, your money could be parked in Swiss francs until it was safe to bring it out.

However, the amusing paradox is that the Swiss franc protects an investor against a fall in the euro, or a default in a southern European bond, but it also allows the Swiss to pay their own sovereign debt by … you guessed it … issuing more sovereign debt.

There is a catch. Last September, as Europeans were fleeing the euro in the last holus-bolus flight to safety, the Swiss National Bank was forced to peg its currency.

The franc was running so hot that it was threatening to demolish the country's high-quality export sector and its tourism. After all, why go skiing in Switzerland when to do so next door in Italy, Austria and France was half the price?

The currency fix didn't entirely quell the tide of capital, though. Hence the negative yield. This week, two-year rates are costing investors 36 basis points.

Meanwhile, below the Pyrenees, Spain's 10-year debt sank to its lowest price, which means its highest yield, in 15 years at 6.83 per cent.

At that rate, it is too expensive for the embattled government in Madrid to issue bonds and refinance. The cost of Italy's debt, likewise, became prohibitive, hitting six-month highs above 6 per cent.

The spectre of contagion once again haunts Europe and there is still another $1 trillion to borrow and refinance this year. Italy, the second-largest debtor in the eurozone, has more than €9 billion to raise in the next couple of days.

And as the calls go out from banks and markets for QE3, for another round of free money to prop up stockmarkets, it is ever apparent the benign effects of central bank stimulus diminishes with each program.

More and more people are questioning the Keynesian logic of splashing the cash around. The more compelling logic would be that splashing the cash about has failed. The result has been to pile debt upon debt.

Perhaps when they let Greece go - and it might take Spain and the rest of the periphery to be cleaned out, too - nature and markets can take their course.

In the meantime, if there is another enormous stimulus, it will provide at least short-term relief for the sharemarkets. And for Australia it might turn out to be fleetingly positive, putting a floor under commodity prices as markets opt, however briefly, to park their money in hard assets.

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Financial crisis erases two decades of accumulated prosperity of US families - Economic Times

This vast loss of wealth was compounded by a loss of income, as the earnings of the median family fell by 7.7 percent over the same period.

The new data come from the Fed's release Monday of its triennial Survey of Consumer Finance, one of the broadest and deepest sources of information about the financial health of U.S. families. The latest survey is based on data collected in 2010. Figures are reported in 2010 dollars.

Unsurprisingly, the report is full of grim news, and although it is news from 18 months ago, fresher sources of economic data make clear that most households have since seen only modest increases, at best, in wealth and income.

Despite these setbacks, consumers have continued to spend surprising amounts of money in recent years, helping to keep the economy growing at a modest pace. The survey underscores where the money is coming from: Americans are saving less for future needs and making little progress in repaying debts.

The share of families saving anything over the previous year fell to 52 percent in 2010 from 56.4 percent in 2007. Other government statistics show that total savings have increased since 2007, suggesting that a smaller group of families are saving more money, while a growing number manage to save nothing.

The survey also found a shift in the reasons that families set aside money, illustrating the lack of confidence that is weighing on the pace of economic growth. More families said they were saving as a precautionary measure, to make sure they had sufficient liquidity to meet short-term needs. Fewer said they were saving for retirement, education or for a down payment on a home.

And the report highlighted the fact that households have made limited progress in reducing the amount that they owe to lenders. The share of households reporting any debt declined by 2.1 percentage points over the past three years, but 74.9 percent of households still owe something and the median amount of the debt did not change.

The drop in reported incomes could have increased the weight of those debts, requiring families to devote a larger share of income to debt payments. But one of the rare benefits of the crisis, lower interest rates, has helped to offset that effect. Families also have been able to reduce debt payments by refinancing into mortgages with longer terms and deferring repayment of student loans.

The survey also confirmed that Americans are shifting the kinds of debts that they carry. The share of families with credit card debt declined by 6.7 percentage points to 39.4 percent, and the median balance of that debt fell 16.1 percent to $2,600.   Families also reduced the number of credit cards that they carried, and 32 percent of families said they now had no cards, up from 27 percent in 2007.

Morning business round-up: World Bank warning - BBC News

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Economic concerns continued to dominate headlines, with problems in the eurozone threatening to have an impact on economies outside the bloc.

Developing nations should brace themselves for weak growth and "tougher times", the World Bank has warned.

It said that there may be "a long period of volatility in the global economy" as the eurozone debt crisis escalates.

The bank forecast that developing economies would grow by 5.3% this year, down from 6.1% in 2011.

There was, however, some good news for the eurozone, with new data showing that inflation for the larger economies has eased.

And although the Spanish economy continues to suffer, not all the country's companies are struggling. Retailer Inditex, whose brands include Zara, posted a surge in profits and sales, sending the company's share price up 8%.

In Japan, there was a boost for machinery orders in April, a key indicator of capital expenditure.

In what was a positive sign for the economy, orders rose 5.7% from a month earlier. Most analysts had projected 1.5% growth.

Failed carmaker Saab has found a buyer, with the identity of the new owner due to be announced later on Wednesday. However, media in Sweden reported that the buyer was a Swedish-Chinese investment group.

Also being announced later is the result of a shareholder vote on remuneration at advertising group WPP. Chief executive Martin Sorrell is facing a backlash over his £6.8m package.

In the UK, the chief executive of the financial regulator has been speaking about one of the defining moments of the financial crisis.

Hector Sants disclosed to the BBC that the crisis that forced the nationalisation of Northern Rock bank might have been avoided if his advice had been heeded.

Also in the UK, one of the leading supermarkets, Sainsbury's, has seen a rise in sales due to the opening of smaller stores.

The figures come two days after the UK's largest supermarket group Tesco reported a fall in UK sales.

In the latest Business Daily podcast, the team examines how Europe is starting to think the unthinkable - what happens if the eurozone splits. The BBC's Chris Bowlby runs through some of the possible scenarios.

'Diablo 3' real-money auction house European launch date confirmed - Digital Spy

Exclusive: Syria prints new money as deficit grows: bankers - Reuters

AMMAN | Wed Jun 13, 2012 9:04am EDT

AMMAN (Reuters) - Syria has released new cash into circulation to finance its fiscal deficit, flirting with inflation after violence and sanctions wiped out revenues and led to a severe economic contraction, bankers in Damascus say.

Four Damascus-based bankers told Reuters that new banknotes printed in Russia were circulating in trial amounts in the capital and Aleppo, the first such step since a popular revolt against President Bashar al-Assad began in 2011.

The four bankers said the new notes were being used not just to replace worn out currency but to ensure that salaries and other government expenses were paid, a step economists say could increase inflation and worsen the economic crisis.

The United Nations says Assad's forces have killed at least 10,000 people in a crackdown, and the government says more than 2,600 members of its security forces have died.

The four bankers, along with one business leader in touch with officials, said the new money had been printed in Russia, although they were not able to give the name of the firm that printed it. Two of the bankers said they had spoken to officials recently returned from Moscow where the issue was discussed.

"(The Russians) sent sample new banknotes that were approved and the first order has been delivered. I understand some new banknotes have been injected into the market," said one of the bankers. All requested anonymity.

Two other senior bankers in Damascus said they had heard from officials that a first order of an undisclosed amount of new currency had arrived in Syria from Russia, although they were unable to confirm whether it had entered circulation.

Outgoing Finance Minister Mohammad al-Jleilati said last week that Syria had discussed printing banknotes with Russian officials during economic talks at the end of May in Moscow. He said such a deal was "almost done", without going into details.

However, the central bank later denied through state media that any new currency had been circulated.

Goznak, the state firm that operates Russia's mint and has exclusive rights to secure printing technology, regularly prints money for other countries. It declined to comment.


Russia is one of Syria's major political backers and a close trading and economic partner. There are no sanctions in place that would bar a Russian firm from printing money for Syria.

Syrian money was previously printed in Austria by Oesterreichische Banknoten- und Sicherheitsdruck GmbH, a subsidiary of the Austrian central bank. That order was suspended last year because of European Union sanctions, an Austrian central bank spokesman said.

One of the four bankers described the decision to use newly printed money from Russia to pay the deficit as a "last resort" after several months of consideration.

Syria's deficit has swollen because of declining government revenues and loss of oil exports hit by sanctions. The government is loathe to impose unpopular measures to fight the deficit, like cutting subsidies or raising taxes.

"The deficit is there and it is already increasing and increasing quickly. And to finance it they have decided to print currency," said the senior businessman, who is familiar with the subject and in touch with monetary officials.

Bankers say a priority has been to continue salary payments for over 2 million state employees among a workforce of 4.5 million in a country of more than 21 million people.

"You cannot allow the public sector to collapse," said one of the bankers."

"People are getting their wages and there are no complaints if they are paid at the end of every month. If we reach a stage where they are not paid there will be a crisis."

Syria's $27 billion 2012 budget was the biggest in its history, taking many by surprise. Bankers say the spending surge was motivated by a desire to create more state jobs and maintain subsidies to help ward off wider discontent.

The private sector has suffered large scale layoffs, but workers in the public sector have kept their jobs and had steady wages despite a salary freeze.

Financing the spending has proven difficult. The central bank has exceeded borrowing limits from public banks, and private banks are reluctant to buy government bonds, one of the bankers said.

Inflation is already running at 30 percent, although the central bank considers it manageable.

Authorities have spent state funds on subsidies to keep the prices for household utilities and petrol unchanged, and have announced planned price controls on basic commodities. However, electricity prices for big industries have risen by 60 percent and the price of subsidised diesel fuel has also risen.

The authorities plan to inject only a small amount of new currency to prevent runaway inflation, said one of the bankers.

"But there is a limit to how much fresh money could be injected into the economy in such highly uncertain times. Reckless printing of money as a way of buying short term reprieve could be economic suicide," the banker added.

(Additional reporting by Fredrik Dahl in Vienna; Editing by Oliver Holmes and Peter Graff)

Apple Maps Could Launch With More Business Listings Than Google -

apple-maps-local-searchIf the two companies’ self-reported numbers are accurate, and if nothing changes between now and then, Apple’s new Maps product will launch later this year with more local business listings than Google.

As Bloomberg points out, during Apple’s announcement on Monday, the company said it has “ingested” more than 100 million business listings around the world via its various data partnerships. As our Greg Sterling has pointed out on his own blog, Apple’s primary local business data providers appear to be Localeze, Acxiom and TomTom. (What appears to be a full list of Apple’s sources is listed here.)

Meanwhile, when Google announced its new Google+ Local Pages a couple weeks ago, Marissa Mayer said — and a Google spokesperson confirmed to Bloomberg — that Google has 80 million local business listings. That’s 20 percent less than the number that Apple claims it’ll have when iOS6 arrives later this year.

Of course, Google could do something to narrow or eliminate the difference between now and then.

Back in the first half of last decade, Google and Yahoo used to regularly try to one-up the other with grand proclamations about who had the bigger index of web pages/documents. Don’t be surprised if, much like those days, Google and Apple race to have the most local business listings and trade claims over whose local search index is biggest.

Related Topics: Apple: Maps | Google: Maps & Local

About The Author: Matt McGee is Search Engine Land's Executive News Editor, responsible for overseeing our daily news coverage. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He blogs at Small Business Search Marketing and can be found on Twitter at @MattMcGee and/or on Google Plus. See more articles by Matt McGee

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