Mexican ex-governor tells U.S. judge he laundered drug money

The former governor of Quintana Roo state Mario Villanueva (C) is arrested by members of Mexico's Federal Investigative Agency (AFI) moments after he was released from the maximum security prison of El Altiplano, Mexico June 21, 2007.

NEW YORK (Reuters) - A former Mexican state governor pleaded guilty in a New York federal court on Thursday to conspiring to launder millions of dollars of cocaine trafficking proceeds.

Mario Villanueva,64, governor of Quintana Roo state from 1993 to 1999, was extradited to the United States in May 2010 after serving a six-year sentence in Mexico for money laundering. The state is home to the famous seaside resort city of Cancun.

The money transfers were administered by Consuelo Marquez, a Lehman Brothers investment representative who pleaded guilty to money laundering charges in 2005.

"The defendant received those proceeds and laundered them through various financial transactions," federal prosecutor Jason Smith said at Thursday's plea proceeding. "They were drug trafficking proceeds."

U.S. District Judge Victor Marrero in Manhattan accepted Villanueva's plea and set an October sentencing date.

As part of an agreement with prosecutors, Villanueva pleaded guilty to one count of money laundering conspiracy, which carries a potential maximum of 20 years in prison.

Prosecutors said the money received by Villanueva was funneled to and from a series of third-party accounts and offshore corporations, ultimately ending up in the accounts at Lehman Brothers.

Villanueva had been part of the Institutional Revolutionary Party's decades-long grip on Mexican politics. The PRI, which held the presidency from 1929 until 2000, was marked by endemic corruption but far less drug-related violence than the country has seen in the past six years.

President Enrique Pena Nieto, who returned the PRI to power this year, has promised to beef up work with U.S. agencies in fighting drug cartels but says he will fine-tune the strategy to reduce violent crime linked to the drug war.

The case is USA v. Mario Ernesto Villanueva Madrid, U.S. District Court for the Southern District of New York, No. 01-cr-021.

(Reporting By Basil Katz; Editing by Andrew Hay)