I refer today to this article in The Blood-Horse from March 9, the first anniversary of the arrests and federal indictments of 28 individuals, including Jason Servis and Jorge Navarro, for their alleged roles in a misbranding conspiracy to manufacture, distribute and administer illegal substances to racehorses.
The title of the article could not be clearer: One year after the indictments, cheaters still prosper.
At that time, not much seemed to have changed and some industry leaders were expressing concern about the serious need for change in running the cheaters out of the sport.
Until very recently, I shared the opinion that very little seems to have changed at U.S. racetracks as a result of the indictments. This summer, I was fortunate to have seen more than 25 days of live racing at Saratoga during the 40-day meet. In my view, there remain too many instances where certain trainers with first-time starters, first off the claim, first off the layoff etc, win at disproportionately higher percentage rates, in addition to trainers with winning percentages over 25 percent.
If it’s happening at Saratoga ...
If this is happening at Saratoga, you can bet that performance-enhancing drugs are in use at racetracks across the country.
Directly related to the issue of cheating, on September 2, Federal prosecutors released a 155-page response document in an ongoing dispute over substantial wiretap evidence against Servis, Navarro and a handful of other defendants. To get to the heart of the matter, you should read Natalie Voss’s September 7 Paulick Report article What we learned from new wiretap evidence in the Federal drug case, which includes a link to the entire report.
As you will see, there were seven different motions from the defendants to suppress all wiretaps that had been gathered by Federal prosecutors after the March 9, 2020, indictments. The Feds had reached the conclusion that ‘boots on the ground’ surveillance videos and post-race testing were not going to stop cheaters.
Note that in the September 2 report there is no mention of any wiretap activity from either Navarro or veterinarian Kristian Rhein. Presumably, this is because both Navarro and Rhein changed their pleas from not guilty to guilty on August 11 and August 3 respectively and both negotiated separate plea deal agreements with the Feds.
While I am not a lawyer, the fact that Navarro and Rhein reached plea agreements less than a month before the 155-page letter would suggest that attorneys for Navarro and Rhein agreed with the government’s opinions on the use of wiretap activity in their surveillance. In this letter, the prosecuting lawyers dispute the defendants’ assertions, citing legal standards regarding probable cause and existing evidence for each wiretap. This would seem to suggest that the Feds presume to have a strong belief that their case on the use of wiretaps on the Navarro and Rhein cases, as well as all cases reviewed in the September 2 letter.
Including Navarro and Rhein, there are now six indicted individuals who have changed their pleas to guilty. The first was Scott Robinson, a sales/marketing executive. He is a co-conspirator with pharmacist Scott Mangini. Their illegal products sold primarily on RacehorseMeds and Horse PreRace.
Robinson was sentenced in March 2021 to 18 months in prison and forced to forfeit $3.8 million in profits. Mangini pled guilty on April 23, 2021, after negotiating a plea agreement that charged him with just a single encompassing count of participating in a drug adulteration and misbranding conspiracy.
On September 10, Mangini received a jail sentence consistent with Scott Robinson’s 18 months in Federal prison.
Mangini had higher sales than Robinson and is required to pay a forfeiture order of $8,108,141. In addition, the attorneys revealed that, in the 20 months in question, their sales records solely from RacehorseMeds indicated that there were over 27,600 sales made by the company.
This level of sales activity for RacehorseMeds in such a period would seem to indicate sales that go far beyond the original 28 indicted racing industry participants. Similarly, forfeiture of profits by these two men only totaling $11.9 million would suggest a substantial market for performance-enhancing drugs.
‘Unconscionable animal abuse’
In June 2021, Sarah Izhaki was sentenced to time already served due to a medical condition. Izhaki was selling misbranded versions of Epogen.
Michael Kegley Jr, an independent contractor for Kentucky-based MediVet Equine, pled guilty in July to one count of drug adulteration and misbranding while admitting that one of the drugs was SGF-1000. He is to be sentenced November 22.
Audrey Strauss U.S. Attorney for the Southern District stated, “Michael Kegley promoted and sold unregulated performance-enhancing substances intended for use by those engaged in fraud and unconscionable animal abuse in the world of professional horseracing.”
Rhein, a suspended veterinarian formerly based at Belmont Park, pled guilty on August 3 to one count of drug adulteration and misbranding for use in the covert doping of Thoroughbreds. As part of a plea bargain, Rhein has agreed to forfeit $1.02 million in profits directly traceable to his offense, plus pay further restitution of $729,716.
Speaking during the open court, Rhein directly implicated five other indicted parties, including the now barred Jason Servis, who had been his regular client.
Navarro’s admission
Rhein said, “I, along with Jason Servis, concealed the administration of SGF-1000 and clenbuterol from the owners by billing for other services and dispensables to avoid scrutiny by the owners. I, along with Jason Servis, were leaders and organizers who performed allegedly criminal actions which included my associate, Dr Alexander Chan, Jason’s assistant Henry Argueta, my other associate Juliana Suarez, and Michael Kegley Jr.” Rhein is scheduled to be sentenced on December 2.
The sixth indicted Thoroughbred racing participant is the most recent, and one of the two most significant of the 28 indicted parties. Navarro admitted in Federal court in Manhattan to involvement in a conspiracy to administer performance-enhancing drugs to horses, in order to win prize money at racetracks.
“I was the organizer for a criminal activity that involved five or more participants. I coordinated the administration on non-FDA approved drugs that were misbranded or adulterated to horses under my care. I abused a position of trust as I was a licensed horse trainer, and the horses were in my custody at the time,” Navarro said in a statement to the court. He confided in Jason Servis regarding his own ‘doping’ practices and about a corrupt relationship he had with an unnamed racetrack official.
Navarro could be jailed for five years in his sentencing, scheduled for December 17. He has agreed to pay $25.9m in restitution, reflecting winnings tied to doping and he faces a $250,000 fine for the use of illegal drugs on his horses. It seems highly unlikely that Navarro will have the resources to pay even a small portion of the restitution payment.
“As he admitted today, Navarro, a licensed trainer and the purported ‘winner’ of major races across the world, was in fact a reckless fraudster whose veneer of success relied on the systematic abuse of animals under his control,” the U.S. Attorney said in a statement.
Sad truth
Three of the six people who to date have changed their pleas to guilty face serious time in jail as well as seven- or eight-figure payments for fines and/or restitution. The size of these payments and allotted jail time are unprecedented for the U.S. Thoroughbred racing industry. Given the plea agreements that have been reached over the last six months, it would seem highly likely that new deals will be reached in court and some people inevitably will try to win their cases, only to lose them because of powerful evidence that has been assembled.
The sad truth is that the amount of cheating via performance-enhancing drugs far exceeds the uninformed opinions of state government, regulators and racetrack operators, who have made minimal effort to identify and eliminate cheaters from the industry.
The one category that understands the breadth of cheating in racing is the bettor. Lack of confidence in the integrity of the racing product is the main reason that wagering in the U.S. peaked in 2003 at $15.062 billion and has declined to $10.930 billion since. For the first time ever, the industry will need to take aggressive efforts by racetracks and horsemen’s organizations working with HISA and USADA to ELIMINATE cheating in racing
It is imperative that the Federal government shares some of the higher-profile cases of cheating with HISA and USADA as they prepare a regulatory structure, including penalties, that will be launched by their deadline of July 1, 2022.
Essential early investigations
There is no question that there are a lot of lessons to be learned from the Federal indictments and prosecutions that are currently underway. Our current state-by-state regulation is an unmitigated disaster. Just look at how much money our individual states spend on drug testing, and give me one example where the money is well spent, deterring cheaters and ensuring the safety and health of our human and equine athletes.
When I worked at NYRA, we would test an average of five horses from each race, each day. As is the case at most racetracks, we were not stopping cheaters, we were not doing much to improve human and equine safety, and New York State was spending millions of dollars on testing programs that could not identify the cheaters who were draining the racing industry.
The efforts of the Jockey Club and Jeff Gural hiring 5 Stones Intelligence (5Si) to do the original investigative work on racetrack cheaters was essential to getting the FBI engaged in this investigation. USADA CEO Travis Tygart also played a role in getting the Feds on board. In fact, the Jockey Club invited Tygart to speak at the 2012 RoundTable, which indicates how long this integrity strategy has been in the making.
I wrote in an earlier column regarding presentations at the Jockey Club Round Table in August by HISA chair Charles Scheeler and USADA Director of Equine Science Dr Tessa Muir. I was very impressed with the vision and the amount of work that is already underway at USADA and HISA.
Serious overlap
I would like to present a few paragraphs, first from Dr Muir, who will briefly present some aspirations and goals:
“Many of you will be familiar with USADA and the work they do in human sports, but you’re probably wondering what USADA brings to horseracing. USADA’s mission is a really clear one: To stand with athletes to champion their right to clean sport; to inspire true and healthy sport; and to promote the integrity of sport.
“Their unwavering support of clean athletes is something I’ve always been really inspired by. And, as we look forward to USADA’s vision for building a successful equine anti-doping and medication control program, the principles of its mission absolutely stand true.
“Our aspiration is to establish and maintain a uniformed and harmonized program that is centered on promoting and safeguarding the health and welfare of horses and protects the rights of all participants to race clean and win fairly.
“Their equine-specific expertise will be critical in achieving this. Combining expertise and experience is a really fantastic opportunity on both the equine and the human side, to integrate knowledge and leverage best practices and standards for the benefits and welfare of clean athletes, whether those athletes be equine or human.
“As we look to that future, I’m sure many of you will have considered the possibility of USADA’s role in testing horses under HISA, but there are also other elements such as education, research, results management, and investigations that are all important building blocks of a successful program.
“Education is the foundation and backbone of establishing the program, and it will be important and critical to give racing industry the tools and empower those within the industry to champion and live by the ethos of clean racing and, importantly, to continue to demonstrate racing’s social license to exist as a sport in an ever-evolving world.”
I believe Dr Muir makes some excellent points. Certainly, there are differences between developing an integrity program for an equine athlete versus a human athlete. However, once you start looking at performance-enhancing drugs in detail, you will discover there are many illegal drugs that seriously overlap between horseracing and the human sports of swimming, track and field and cycling.
Empowering remarks
I encourage you to go to the Jockey Club Round Table for 2021 on the website and listen to Dr Scheeler’s remarks, which you should find challenging, empowering and encouraging.
Here is his excellent strategic summary:
“There are four main components to what we are building. The first is the anti-doping and medications program. We have a committee led by Adolpho Birch, who coordinated the NFL’s drug policy prior to becoming general counsel of the Tennessee Titans in his hometown of Nashville. We’re working with USADA. We’ve had a number of multi-day meetings, and we’re putting together a program, and we’re trying to work towards a contract.
“Second, we’re working on a safety program, which is chaired by Susan Stover, one of the world’s leading researchers in equine safety from the University of California at Davis. They too have been very busy assembling and reviewing work products of others who have come before them who have looked at safety issues and [are] trying to fashion a best in practice program.
“Third, we’re working on constituency outreach. Notwithstanding the powers granted to HISA by Congress, this will only work if we get broad industry buy-in. Our goal is to work with the state racing commissions to enhance safety and integrity, not to displace those commissions.
“So we will be reaching out, and we already have started this process, reaching out to the state racing commissions, to the industry groups, to be very inclusive in this process. We understand that culture eats strategy for lunch every day. So we need a culture in this industry which buys into this new program.
“We have to make a convincing case that cooperation and compliance with this new initiative will make the sport more popular and safer by making it more sustainable in the future. We want to encourage compliance with everyone. We want to bring people into compliance. We don’t want to play games of gotcha.
“Number four, then, is data. We’re proceeding as economically as possible, accumulating data from TJC and other trusted sources. I assure you that we have no intention of reinventing any wheels. But data will be key to this enterprise. We have the right to obtain appropriate data from all covered persons.”
I truly believe that the legislation creating HISA working with USADA is the best thing that has happened in the racing industry since the first day I went to a race on June 1, 1980, the 75th anniversary of Belmont Park.
I have optimism that there is some serious work being done on cheating in U.S. racing. However, please understand that there is a lot of work to be done and it is definitely going to involve jail time and steep fines for some racing participants.
One final issue that needs to be addressed is the Feds’ notion about forfeiture of purses from trainers. As we all know in racing, the major beneficiary of a horse winning a race is the owner(s). The standard distribution of the winning purse is ten percent to the jockey, ten percent to the trainer and 80 percent to the owner. Unfortunately, today, some owners seek out trainers who have a reputation for high win percentages or significant form reversals. If we are going to eliminate cheating in racing, we need for the owners to have financial liability if or when it becomes apparent that their trainer is cheating.
March 9, 2020 was a huge day in the start of a serious effort to punish the cheaters, catch them and ban them from the sport. Yes, 28 indicted racing participants is a decent start if the appropriate number of indictments end up with convictions. However, I think many of us would be shocked to learn the number of people in the industry that are ‘taking an edge’, which in English means CHEATING.
There is a lot of work to be done and we need to do it deliberately and together.