View From The Eighth Pole: Ownership Of Oaks Contender Crazy Beautiful Has Horse Industry Looking The Other Way

When post positions are drawn Monday for the 147th running of the Grade 1 Kentucky Oaks, one of the leading contenders will be Grade 2 Gulfstream Park Oaks winner Crazy Beautiful, a Liam's Map filly trained by Kenny McPeek, who bought her as agent for $250,000 at the 2019 Fasig-Tipton Kentucky October Yearling Sale.

Within weeks of that sale, the man who would become Crazy Beautiful's owner – Amer Abdulaziz of Phoenix Thoroughbred III – would be identified under sworn testimony in federal court as a conspirator to launder some of the estimated $4 billion scammed from people around the globe in a cryptocurrency ponzi scheme known as OneCoin.

Dubai-based Abdulaziz was named by Konstantin Ignatov, whose sister, Ruja Ignatova, is said to be the mastermind behind OneCoin (she has disappeared but the story of her and OneCoin is told in the BBC podcast The Missing CryptoQueen). Konstanin Ignatov pleaded guilty to charges of fraud and money laundering and is now cooperating with the U.S. attorney for the Southern District of New York that is prosecuting several cases related to OneCoin.

Ignatov said that not only was the Phoenix Thoroughbred founder laundering OneCoin funds, Abdulaziz stole 100 million euros from the operation and spent the money on racehorses, according to investigative journalist Matthew Russell Lee, who reports on courtroom activities at the Southern District of New York.

Ignatov testified in the trial of attorney Mark Scott, who was convicted of money laundering and bank fraud in connection with OneCoin and like Ignatov is awaiting sentencing.

When Scott was arrested and interviewed by the FBI in September 2018, he admitted to closing a OneCoin fund in Ireland and wiring the money to a “financial adviser” in Dubai named “Amar something” who ran the Phoenix Investment Fund.

The government showed that more than 185 million euros were transferred to Phoenix between February and April 2017. In a forfeiture letter to the judge in the Mark Scott trial in which the government is seeking $393 million in funds from Scott, acting U.S. Attorney Audrey Strauss could not have been more clear in her assessment of Abdulaziz.

She wrote: “Scott subsequently transferred approximately 185,000,000 euros from the Bank of Ireland to the accounts of another one of Ruja's money launderers named Aamer Abdulaziz.”

A government exhibit in the Mark Scott trial showed the various wire transfers involving OneCoin funds

Through an agent, Abdulaziz first starting buying high-priced horses in early 2017 at the Fasig-Tipton Florida Sale of 2-year-olds in training. By year's end he had spent more than $20 million and was building a massive worldwide portfolio of bloodstock holdings that included horses for both racing and breeding.

That spending continued into 2018 when Abdulaziz' profile was elevated beyond the insular world of bloodstock sales. Phoenix Thoroughbred struck a deal to have NFL star tight end Rob Gronkowski take part ownership of a namesake colt, Gronkowski, running in that year's Belmont Stakes won by Triple Crown winner Justify.

 

By now, nearly everyone in racing had heard of the big-spending Phoenix operation, which Abdulaziz had hailed as the “world's first regulated Thoroughbred fund” that was designed to show a profitable return to its investors. Except no one seemed to have any idea who the actual investors were or why they would put their trust in someone who was a relative unknown until he started spending tens of millions of dollars to buy horses.

The following March while in Dubai for the World Cup, British television host Nick Luck conducted an interview with Abdulaziz, who directed some comments to skeptics.

“People are always asking, 'Who are these guys? Are they serious? Are they going to be there next year?'” Abdulaziz said. “I can tell you now, on your show, we are here to stay.”

Luck responded: “The other question they always ask is, 'Where's the money coming from?'”

“It's a registered fund,” said Abdulaziz. “Transparency is very important. If anyone has any doubt we are more than happy to have them come and sit with us in our office. … There are third party regulators.”

It has since been reported that Phoenix was not regulated in Luxembourg, as Abdulaziz has said.

“Most of the people we have managed to bring to the fund so far are pension funds, insurance companies or high net worth individuals from Europe, America or Australia,” Abdulaziz told Luck. “We would like to give our investors the opportunity to come to the races, network with a lot of people, open doors for them.”

Yet those investors were never identified or seen at major racing events where Phoenix horses competed. When Crazy Beautiful won the Gulfstream Park Oaks, trainer McPeek confirmed, none of the people in the crowded winner's circle were affiliated with Phoenix Thoroughbred.

None of the people in the crowded winner's circle after Crazy Beautiful's Gulfstream Park Oaks victory was affiliated with Phoenix Thoroughbred, according to trainer Kenny McPeek

Abdulaziz told Luck in 2019 that Phoenix has a half dozen other funds, including a hospitality fund worth “about a billion dollars.” He said that he has another fund “where I have all the basketball players involved with me in the U.S.”

Since the initial revelations about Phoenix and Abdulaziz were first made in United States federal court proceedings, horse racing regulators around the world have begun to restrict the operation's activities. According to published reports, authorities in France, the United Kingdom and even his home country, the United Arab Emirates, have said Phoenix can not race horses there. Most recently, Australian authorities said they will freeze any prize money won by Phoenix out of concerns over where its funds came from. Sources have said several horse sales in Europe will no longer accept Abdulaziz' money.

No U.S. racing regulators or racetracks have yet banned Phoenix and major sales companies Fasig-Tipton and Keeneland have not said Abdulaziz and his money are not welcome.

The standard answer from these organizations is: Amer Abdulaziz has not been indicted or convicted of any crime.

And that is true. It is also true that Abdulaziz has vehemently denied any illegal activity and has threatened to take legal action against anyone who says otherwise.

It is also true that Amer Abdulaziz, who once was so prominent at American racetracks and sales grounds, has not traveled to the United States since these OneCoin money laundering revelations were made in federal court. He knows the fate that very likely awaits him. If federal charges were to be filed against Abdulaziz, there is no extradition treaty between the United Arab Emirates and the United States, so Dubai serves as a safe haven for him.

Class-action suits have been filed against OneCoin and more criminal cases are pending. This case is not going anywhere soon. Will Phoenix Thoroughbred assets get dragged into the case? That's anyone's guess.

American regulators and Thoroughbred industry businesses have been looking the other way ever since the money laundering allegations were first made against Abdulaziz and Phoenix in November 2019. It's not a good look for an industry that routinely seems to value money over ethics.

That's my view from the eighth pole.

The post View From The Eighth Pole: Ownership Of Oaks Contender Crazy Beautiful Has Horse Industry Looking The Other Way appeared first on Horse Racing News | Paulick Report.

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Report: Aquis Group Cutting Ties With Phoenix After Failure ‘To Be Honest And Transparent’

Following last week's announcement that New South Wales and Racing Victoria have frozen the prize money of horses owned by Amer Abdulaziz' Phoenix Thoroughbreds over allegations of money laundering, the Aquis Group has decided to cut ties, reports the Australian Financial Review. A group operated by Hong Kong billionaire Tony Fung, Aquis owns multiple horses in tandem with Phoenix, including G1 Golden Slipper winner Farnan, as well as 19 horses purchased at the Magic Millions Gold Coast Yearling Sale in January.

Aquis' decision is predicated by the fact that Phoenix did not disclose the actions of racing authorities to freeze prize money.

“That conduct of Phoenix has failed to meet our expectations,” a spokesman for Aquis told the AFR. “Any true co-owner should inform their partner of such action by authorities. Phoenix failed to be honest and transparent with us over the prize money freeze, which has rendered the relationship untenable.”

Phoenix reportedly is not permitted to race in France, United Arab Emirates or the United Kingdom. No state racing commissions in the United States have taken regulatory action against Phoenix.

Phoenix continues to be active at U.S. bloodstock sales, including the $1.2 million bid by Phoenix agent Gerard Butler to buy out a partner in stakes winner Lady Apple last November at Fasig-Tipton. Shannon Arvin, president and CEO of Keeneland, released the following statement concerning Phoenix being allowed to participate in sales after court documents filed by a federal prosecutor in a money laundering case involving the multi-billion-dollar OneCoin cryptocurrency scam, accused Abdulaziz of being a money launderer for OneCoin.

“Keeneland is aware of the allegations that may involve Phoenix Thoroughbreds and is monitoring the situation,” said Arvin. “However, it is our understanding that Phoenix Thoroughbred has not been indicted by a grand jury, let alone convicted on any allegations. Keeneland will continue to follow any developments in this matter, and certainly will comply with any regulatory or legal action or direction from a governing authority.”

Since the money laundering accusations were made in federal court against Abdulaziz, it is believed that he has not traveled to the United States from Dubai, where he resides.

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Aquis Reportedly Set To Split With Phoenix Thoroughbreds

by Bren O'Brien/TDNAusNZ

The Aquis Group and the Fung family have indicated they will end their Thoroughbred racing partnership with Phoenix Thoroughbreds after it was confirmed that Phoenix's prize money had been frozen in New South Wales and Victoria.

The Australian Financial Review has reported that Aquis had not been informed that Phoenix's prize money had been frozen in Australia's two biggest racing states and, having failed to get answers from the Dubai-based operation, will seek to end the relationship.

Aquis told the AFR that it was left in the dark by Phoenix over the move by racing authorities in Australia to prevent Phoenix from benefitting from its Thoroughbred ownership until legal investigations into the company were completed. It was only made aware of the situation by media reports last week.

“That conduct of Phoenix has failed to meet our expectations,” a spokesman for Aquis told the AFR.

“Any true co-owner should inform their partner of such action by authorities. Phoenix failed to be honest and transparent with us over the prize money freeze, which has rendered the relationship untenable.

“We have sought further clarification from Phoenix multiple times since late last week over matters of their relationship with racing regulatory bodies in Australia, but they completely failed to answer questions. The matter has been placed in the hands of our lawyers.”

The spokesman said Aquis and the Fung family planned to immediately terminate all co-ownership of racehorses with Phoenix.

Phoenix Thoroughbreds responded to Aquis' comments by saying it did not see the need to disclose the prize money freeze.

“Given the conditions placed on us by Racing NSW and Racing Victoria only affects our [Phoenix Thoroughbreds] prize money share, we regard this as an internal matter. Any money due to our partners and trainers remain unaffected, as does our ability to race,” it read.

“None of this impacts our professional relationship with Aquis or their revenue streams from racing horses in partnership with us. With this in mind, we felt there was no reason to inform them of this private situation and stand by that decision.”

A dissolution of the partnership between Aquis and the Fung family and Phoenix Thoroughbreds would have major ramifications for the Australian Thoroughbred industry, as they share ownership in a significant number of thoroughbreds, including the 19 yearlings they spent A$11.6 million on together at the Magic Millions Gold Coast Yearling Sale in January.

They are also part of the ownership of G1 Golden Slipper winner Farnan (Aus) (Not A Single Doubt {Aus}), along with Kia Ora Stud, where he will stand for the 2021 season. Farnan was bred by Phoenix and raced in partnership with Aquis before Kia Ora bought in ahead of his 3-year-old season.

Following the reported news of the upcoming Aquis/Phoenix partnership dissolution, the British Horseracing Authority (BHA) is now under pressure to examine lease agreements being used by trainers to race previously suspended horses that are still owned by Phoenix Thoroughbreds and the Phoenix Ladies Syndicate, the Racing Post reported on Wednesday. The leases were approved by the BHA and several horses that used to carry the Phoenix colours or Phoenix Ladies colours have been in action this month. The BHA did indicate that they can look into specific leasing arrangements if it was warranted.

“We cannot comment on the specifics of any leasing arrangements or possible leasing arrangements,” a BHA spokesperson told Racing Post. “When a horse is leased, it must be lodged with the BHA and the BHA has the ability to investigate if it has any concerns regarding a lease.”

Phoenix Thoroughbreds founder Amer Abdulaziz has been linked to money laundering allegations made in a U.S. court in a case involving the OneCoin cryptocurrency scam, allegations that he has repeatedly denied.

The fallout from those allegations led to Phoenix Thoroughbreds being banned from racing horses in England and France late last year and Dubai this January.

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Victoria Also Freezes Phoenix Prizemoney

Following on from Friday's news that Racing NSW would place a freeze on prizemoney won by Phoenix Thoroughbreds horses until money laundering allegations are resolved in the U.S., Racing Victoria has followed suit.

Phoenix Founder Amer Abdulaziz was named in a U.S. federal court trial in November 2019 as allegedly being involved in a money laundering operation and as having stolen €100-million from OneCoin, a sham cryptocurrency he purportedly helped to run. Abdulaziz and Phoenix Thoroughbreds have denied the allegations.

A spokesperson for Racing Victoria told TDN AusNZ, “While these legal proceedings remain ongoing, RV has decided to place a freeze on Phoenix Thoroughbreds' portion of prizemoney earned by horses they own or part-own. Should any information come to light via these legal proceedings or other means that warrant further action being taken within our jurisdiction, then we will consider it at the time.”

Phoenix, which was leading buyer at this year's Magic Millions Gold Coast Yearling Sale in partnership with Tony Fung of Aquis with A$11.65-million spent, has been banned from racing in the UK, and reportedly in France. No action has yet been taken in the U.S.

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