Audrey Strauss, the United States Attorney for the Southern District of New York, announced that Jose Morley Chocron pled guilty today before U.S. District Judge Jed S. Rakoff to one count of money laundering. Chocron laundered more than $500,000 in funds that had been represented to him to be the proceeds of a scheme to bribe Brazilian political officials, using a network and bank accounts to which he had access by virtue of his operation of an unlicensed money transmitting business.
U.S. Attorney Audrey Strauss said: “Jose Chocron's black-market banking was designed to facilitate tax evasion, and was used to facilitate what he thought was the bribery of a foreign official. Unbeknownst to Chocron, the FBI had identified his network and worked quickly to dismantle it. This Office will continue to ensure the integrity of the U.S. financial system by identifying and prosecuting shadow banking operations like Chocron's.”
According to the Complaint, the Indictment, and other filings in this case:
Between May 2019 and October 2019, Chocron, working with his co-conspirators, utilized his network of contacts and bank accounts to launder funds that had been provided to him by individuals who – unbeknownst to Chocron – were working for the Federal Bureau of Investigation (“FBI”). Those individuals informed Chocron that the funds were the proceeds of bribes that had been paid to Brazilian public officials in order to obtain licenses and permits. On four occasions, Chocron accepted cash from individuals who were working for the FBI or arranged to have the cash delivered to his associates. He then arranged for the funds to be transferred to bank accounts specified by the FBI, minus a commission payment.
Chocron explained that he was able to receive large amounts of cash in the United States and arrange for those funds to be transferred to bank accounts because Chocron “ha[d] . . . people here that need cash. They will transfer to you, because they don't want to pay taxes . . . What do I do? I give them the money and they make a transfer to me.” He also requested a higher commission for his services than initially offered, stating “Let's be clear, that's laundering money.”
Chocron, 61, of Spain and Venezuela, pled guilty to one count of money laundering, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. In connection with his guilty plea, Chocron also admitted that he operated an unlicensed money transmitting business, in violation of Title 18, United States Code, Section 1960.
Chocron is scheduled to be sentenced by Judge Rakoff on July 16, 2021, at 4:00 p.m.
Ms. Strauss praised the outstanding work of FBI New York's Eurasian Organized Crime Task Force.
The prosecution of this case is being overseen by the Office's Money Laundering and Transitional Criminal Enterprises Unit. Assistant U.S. Attorneys Andrew C. Adams, Benet J. Kearney, and Sarah Mortazavi are in charge of the case.
Editor's note: The preceding press release was distributed by the United States Attorney for the Southern District of New York. Chocron was named a March 2020 indictment alongside Florida trainer Alfredo Lichoa and several others. A superseding indictment named only Lichoa, Chocron, and Schachtel. Read about that case here. Lichoa has since entered a guilty plea to a charge of money laundering conspiracy.
The post Chocron Enters Guilty Plea In Case That Tied Horsemen’s Accounts To Money Laundering appeared first on Horse Racing News | Paulick Report.
Ahmed Zayat, the financially embattled Thoroughbred breeder and owner whose insolvent business dealings are currently being scrutinized in three intertwined legal cases, revealed in an otherwise routine bankruptcy court filing Tuesday that prior to being sued for alleged fraud and loan defaults last year, he had lined up at least two global investment partners purportedly willing to pump hundreds of millions of dollars into his failing racing and bloodstock operation.
Most notably, Zayat claimed he had been tantalizingly close–just days away–from securing a $100 million “equity infusion” from an undisclosed entity in China that would have kept New York-based MGG Investment Group, LP, from suing him and other Zayat family members after their cash-strapped racing stable failed to repay loans and allegedly hid and falsified assets.
Zayat then stated that the “extremely aggressive and highly expensive” nature of defending himself from that lawsuit is what forced him to seek Chapter 7 bankruptcy protection last September.
Within that Mar. 16 document that is intended to speed up Zayat's personal bankruptcy case (now past the six-month mark in a federal court in his home state of New Jersey), the breeder who raced 2015 Triple Crown champ American Pharoah detailed a new timeline that suggests even as his financial world was imploding in January 2020, Zayat traveled the globe in a desperate effort to obtain fresh funding to get out from under MGG's $35 million loan.
But that hastily arranged deal never came through in time to prevent MGG from filing the suit that forced his Thoroughbred stable into court-mandated liquidation, according to the version of events Zayat attested to in his cross-motion.
“When MGG filed its Kentucky suit, I was pursuing for [Zayat] Stables a $100 million equity infusion from the Asian markets,” Zayat stated in the filing. “I attended a roadshow in China from Jan. 5, 2020, through Jan. 10, 2020, to pursue that capital infusion. MGG filed suit Jan. 17, 2020. Had MGG not filed its lawsuit in January 2020, the likelihood is that capital raise would have been consummated, resulting in MGG being paid in full.
“MGG encouraged me to pursue that capital infusion while it was secretly preparing the Kentucky suit and intending to exhaust {Zayat] Stables' bank account,” Zayat alleged.
In a different section of the same document, Zayat claimed that MGG “fraudulently induced Stables into a loan which involved a $10 million discretionary portion, never lent the full $35 million to Stables which was required, and admitted it never intended to lend to Stables the full $35 million.”
Zayat stated the money he sought in 2016 from MGG was intended to be a “bridge loan” because Zayat believed he had a bigger deal in the works with CVC Capital Partners, which describes itself as “a world leader in private equity and credit” that seeks to partner with “fundamentally sound, well-managed and cash-generative” businesses.
“At the time of the negotiations with MGG, [Zayat] Stables had a term sheet from CVC, one of the world's largest private equity firms, to inject $250 million equity into Stables for a 49% ownership interest,” Zayat stated in the court document. “Thus, the intent was for Stables to use MGG's $35 million as a bridge loan until an equity infusion transaction could be consummated.”
But that deal also fell through.
The proposed partnership between Zayat and CVC would have unraveled in either late 2016 or early 2017. Based on a different timeline of events laid out by MGG in its lawsuit, that's roughly the same time frame when Zayat and family members allegedly began selling horses and shares in breeding rights while telling the MGG those equine assets remained on the books as security against the loans.
While Zayat's two big-money, near-miss investment disclosures will generate headlines within the Thoroughbred industry, it isn't clear what purpose they serve in relation to the paperwork his legal team filed on Tuesday. The Mar. 16 filing is essentially is a request to get the trustee and creditors to stop grilling him about financial details so the bankruptcy proceedings can be brought to a conclusion.
“The Debtor has been extremely cooperative with the Trustee,” Zayat's attorney, Jay Lubetkin, wrote in an explanatory letter that accompanied the cross-motion. “The Debtor provided to the Trustee significant documentation respecting his financial affairs…. The Debtor has responded with voluminous documents in satisfaction of the Trustee's three very extensive document requests, and temporarily withheld only a small portion of those documents for legitimate, good faith, objectively supportable reasons…
“The Debtor [eventually] provided the Trustee with the temporarily withheld documents, and the Trustee has been in possession of all the requested documents for more than 60 days. The Trustee has personally inspected the Debtor's house with a real estate broker and [an] appraiser for more than two hours, more than three months ago.”
Lubetkin wrote that Zayat and family members are now being asked to turn over another round of detailed financial documents, “none of which have any apparent relevance to the Trustee's decision whether to file an objection to discharge complaint.”
Lubetkin summed up by writing that “In a further display of good faith, the Debtor was willing to consent to a short extension of the Trustee's deadline to file an objection to discharge complaint, if the Trustee agreed to limit the further continued meeting of creditors to one additional hour. Even that reasonable proposal was rejected by the Trustee. For the foregoing reasons, and for those set forth in the supporting Certification, the Debtor respectfully requests that the Court should enter an Order denying the Trustee's further request for an extension of the discharge objection deadline and compelling the Trustee to deem the meeting of creditors concluded.”
According to the cross-motion, among the additional items that the trustee has recently requested are a list of transactions from Zayat's TVG betting account and his credit card statements from 2016.
“Calendar year 2016 was the period immediately after the success of the Triple Crown winning horse American Pharoah, and there is no showing, and can be no showing,
that I was under any personal financial distress during that period of time,” Zayat stated.
The post Even As Fraud Suit Was Imminent, Zayat Now Claims Global Firms Wanted to Invest Hundreds of Millions appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.
Jan Vandebos and her late husband Robert Naify paid a visit to Coolmore on a trip to Ireland several years ago, fueling a desire to seed her high-quality broodmare band with a mare by the world's most dominant stallion. That rendezvous set in motion a chain of events that will see the RanJan Racing-bred Congratulation (American Pharoah), the former 'TDN Rising Star' Monarch of Egypt, take part in one of the world's richest age-restricted events, the HK$24-million (US$ 3.09 million) BMW Hong Kong Derby (NH/SH 4-year-olds only, 2000mT) Sunday afternoon at Sha Tin Racecourse.
“I fell in love with Galileo (Ire) and Montjeu (Ire), when he was still alive on our visit,” she said. “We were just getting started in bloodstock and studied the pedigree and we had decided at the time that we wanted to find a great Galileo mare. I looked for six or seven years at mares that were presented to me from Europe and I didn't see anything I liked.”
That all changed when Galileo's then newly turned 6-year-old daughter Up (Ire) was entered for the 2015 Keeneland January Sale. A half-sister to Group 1-winning juvenile and sire Dutch Art (GB) (Medicean {GB}), Up–fourth to Stephanie's Kitten (Kitten's Joy) in the 2011 GII Breeders' Cup Juvenile Fillies' Turf–was runner-up for the Coolmore ownership group in the 2012 G1 Poule d'Essai des Pouliches (French 1000 Guineas) and was a two-time winner at group level at The Curragh after a sixth against older females in the GI Beverly D. S. She was retired following a seventh-place effort in that year's GI Breeders' Cup Filly & Mare Turf and was covered by War Front in early 2013.
Having produced a filly to the Claiborne stallion, she was bred back to the Danzig son and was consigned to the 2015 January Sale by Four Star Sales.
“I saw her walking video and I'd never seen anything like it,” Vandebos said. “Never seen a shoulder like that or a hip or a walk. I said to [Taylor Made's] Frank [Taylor], 'I think this is the one,' and, on one bid, I was able to get her. She's pure class, she's a lovely, lovely mare. She's not large–she's probably only 15.2 to 15.3, but everything she's produced has been pretty good-sized.”
Taylor signed the sales-topping ticket at $2.2 million.
“That's about where we pegged her,” Taylor told the TDN's Brian DiDonato of Up, whose War Front filly was the top-selling short yearling at the same sale when hammering for $800,000 to Solis/Litt on behalf of LNJ Foxwoods. “We looked at some comparable mares–some of those mares by Galileo in foal to War Front were bringing a lot of money, so we thought that was a fair price.”
Up was among the first book of mares to visit Coolmore America's American Pharoah in 2016 and produced a colt by the Triple Crown winner Mar. 31, 2017. The colt they nicknamed 'six-pack' was raised at Taylor Made by Naify and Marshall Taylor, son of Taylor Made President and CEO Duncan Taylor.
“He was pretty spectacular from the day he was born,” Vandebos said. “Very muscular, very intelligent, everything was just in the perfect place. We sold him well.”
Monarch of Egypt, a $750,000 purchase by M. V. Magnier and Peter Brant's White Birch Farm at KEESEP in 2018, became his sire's first winner from that first crop when scoring by 2 3/4 lengths on debut at Naas to earn his 'Rising Star.' Second to the talented future G1 Irish 2000 Guineas hero Siskin (First Defence) in the G2 Railway S. and G1 Keeneland Phoenix S. at two, Monarch of Egypt was a cracking runner-up in a soft-ground renewal of the G3 Jersey S. at Royal Ascot last June. Sold to Hong Kong interests, the bay gelding was a sound fifth, beaten just over four lengths, in the Class 1 Chinese New Year Cup H. (1400m) at Sha Tin Feb. 14 (video) for former leading jockey and now trainer Douglas Whyte.
“I really thought he would be a 2 1/2 to 3-year-old because of what the dam had done at the races,” Vandebos said. “I honestly don't think he's reached his full potential and I am really excited about this race. I don't really think he's a sprinter, but I think it's very interesting that he's in Hong Kong.”
Up was entered for, but was withdrawn from another trip through the Keeneland sales pavilion in November 2017 when carrying to Pioneerof the Nile. That proved a fruitful decision when that produce, a colt, was sold for $1 million at the 2019 September sale. Now named Khartoum, he is a maiden winner in two starts for Aidan O'Brien.
Up's foal of 2019 is a Medaglia d'Oro filly Vandebos proudly describes as “one of the most–if not the most–beautiful filly I've ever owned.” Vandebos elected to take her home after bidding stalled out at $575,000 at KEESEP last fall. The filly, named Star of India, is with Dr. Barry Eisaman in Ocala, but “I am in no rush with her,” Vandebos said.
Next in the pipeline is a now-yearling filly by Quality Road that will most likely be offered at Keeneland this fall, “unless I fall in love with her before then, which is quite likely!”
Up was not bred in 2020 and was recently covered once again by Medaglia d'Oro. And to bring it all full-circle, Up's first foal is now the dam of the 2-year-old colt Direct (Aus) (Siyouni {Fr}), who was third in the G2 Silver Slipper S. at Rosehill in Sydney last month.
Vandebos, who also bred the late Roaring Lion (Kitten's Joy), keeps her 10-strong broodmare band at Lane's End. One of RanJan's most beloved producers, Cambiocorsa (Avenue of Flags), is likely to be pensioned this year to live out her days at Lane's End, Vandebos said.
“I want to keep it small,” she said. “I have a boutique operation that I manage myself. I am back and forth to Kentucky, I spend a week at a time back there about every other month. It's what I love. It's not about the business. It's about breeding the horses and being proud of my mares and their progeny. It's really a labor of love for me. I don't consider it a business, although my accountant tells me I need to start considering it as a business! But I've had good luck. I just hope my horses and mares stay healthy and they can show the world what we can do.”
The field for the BMW Hong Kong Derby will be drawn Thursday at midday (local time).
The post ‘Up’ and Coming Son of American Pharoah Set for Hong Kong Derby appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.
