Drug Distributor Kegley Pleads Guilty, Faces up to 36 Months in Jail

Among the individuals originally indicted in the doping scandal involving top trainers Jason Servis and Jorge Navarro, Michael Kegley Jr. entered a guilty plea Friday morning during a teleconference before federal judge Mary Kay Vysockil. Kegley pled guilty to one count of drug adulteration and misbranding.

Kegley had originally pled not guilty to the charges.

Kegley will not be sentenced until a Nov. 22 hearing, but it was revealed during Friday's proceedings that he has entered into a plea agreement with government lawyers in which he has agreed to a sentence ranging from 30 to 36 months. Vysockil noted that there is no parole involved when someone is sentenced on federal charges and that most guilty parties serve at least 85% of their sentence.

Kegley, a 41-year-old Lexington, KY resident, was the director of sales for a company based in Nicholasville, KY called MediVet Equine Associates LLC, and admitted in court that the firm produced and sold drugs that were not permissible to be used on  racehorses. The primary drug sold by Kegley was SGF-1000. In phone calls intercepted by the FBI, Servis admits to using SGF-1000 and, at one point, says, “I've been using it on everything almost.”

Vysockil, a United States District Judge of the United States District Court for the Southern District of New York, confronted Kegley, saying, “At this time I would like you to tell me what you did that makes you guilty of the offense charged…Specifically, what you did, when you did it, with whom you did it, where you did it.”

Kegley responded: “Beginning in 2016, I was an independent contractor for a company, MediVet Equine. We sold a variety of products, including SGF-1000. I sold these products to veterinarians, horse trainers. When I did that I knew there was no medical prescription for those products. Also at the time, I knew that the product was not manufactured in an FDA approved facility, nor was it approved for sale by the FDA.”

Vysockil continued to press Kegley, asking a series of follow-up questions. She asked Kegley if he knew that the trainers buying the products intended to use them on Thoroughbred racehorses and whether or not he knew the products were to be used in such a way that regulators could not detect the products through drug tests. Kegley answered “yes” to both questions.

Shortly after Friday's hearing, Manhattan U.S. Attorney Audrey Strauss issued a statement, which read: “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. This conviction underscores that our Office and our partners at the FBI are committed to the prosecution and investigation of corruption, fraud, and endangerment at every level of the horse racing industry.”

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Mangini Pleads Guilty in Doping Case

Scott Mangini, who, along with Jason Servis,  Jorge Navarro and others was indicted in March 2020 for his involvement in a horse doping scheme, has pled guilty to conspiring to unlawfully distribute adulterated and misbranded drugs with the intent to defraud and mislead, it was announced Friday by Audrey Strauss, the United States Attorney for the Southern District of New York. He faces a maximum sentence of five years.

Mangini, 55, became the third person involved with the case to enter a guilty plea. The list includes Mangini's business partner, Scott Robinson. It is unknown whether or not Mangini and Robinson are cooperating with authorities and providing them with lists of additional clients who were not named in the original indictments.

Mangini will be sentenced Sept. 10 by Judge Paul Oetken. Robinson was sentenced to 18 months for his role in the scheme to use performance-enhancing drugs on horses. He also had to forfeit $3.8 million.

Mangini used several websites, among them “horseprerace.com” and “racehorsemeds.com,” to sell drugs, including illegal medications he called “Blast Off Red Blood Builder,” “Extreme Explosion,” “Oral Epo,” and “Green Speed.”

“Scott Mangini created and flooded the supply side of a market of greed that continues to endanger racehorses through the sale of performance-enhancing drugs,” Strauss said in a statement. “Mangini designed and created dozens of products intended for use by those engaged in fraud and animal abuse.  His products were manufactured with no oversight of their composition, in shoddy facilities, despite prior efforts by state and federal regulators to shut down Mangini's operation and strip his license. Mangini's guilty plea underscores that our Office and our partners at the FBI are committed to the prosecution and investigation of corruption, fraud, and endangerment in the horse racing industry.”

The government contends that from as early as 2011 through the March 2020 indictments, Mangini manufactured, sold and shipped millions of dollars worth of adulterated and misbranded equine performance-enhancing drugs. Mangini is a former pharmacist whose license was suspended in 2016.

Many of the drugs sold by Mangini fell under the category of “blood builders,” which were used by trainers to increase red blood cell counts and improve a horse's endurance. Other drugs were used to deaden a horse's nerves and block pain in order to improve a horse's race performance. In addition, Mangini told his clients that no tests were available for the drugs he was selling. For example, Mangini's pain-numbing product “Numb It Injection” was advertised as a “proprietary formula and without question the most powerful pain shot in the market today” and as something that could not be found through post or pre-race tests.

According to the U.S. Attorney's office, Mangini was selling drugs that were manufactured in non-Food and Drug Administration registered facilities and they carried significant risks to the animals affected through the administration of those drugs.

Mangini operated out of Boca Raton, Florida.

Sarah Izhaki, also a drug distributer, has also pled guilty but has yet to be sentenced.

This case is being handled by the Office's Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Sarah Mortazavi, Anden Chow, Benet Kearney, and Andrew C. Adams are in charge of the prosecution.

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View From the Eighth Pole: Truth Or Consequences

I've been observing the “lads” at Coolmore Stud in Ireland and at their Kentucky farm, Ashford, for more than 30 years. They have revolutionized the bloodstock world, maximized stallion revenue, and elevated customer service and marketing.

Through early identification and acquisition of promising stud prospects, embracing large books for their stallions (including no small number of their own mares), and shuttling them to Australia or South America for dual hemisphere breeding seasons, Coolmore and Ashford can “get out” financially on many of these horses before their first foals hit the racetrack.

In a business where nine out of 10 new stallions will fail to sustain or increase their initial value, it's highly advantageous for a stud farm to break even or show a modest profit before the marketplace has a chance to see whether or not a horse's offspring can run.

Yet the lads aren't perfect. No one is.

I was reminded of that when I saw their recent advertisement for first-year stallion Maximum Security. It was, without a doubt, the most unconventional stallion ad I've ever seen.

Under the banner, “MAXIMUM SECURITY – the facts,” the ad began normally enough, citing races won, achievements, and awards.

Then it gets weird. Bullet point No. 12 in the ad states: “NEVER TESTED POSITIVE for an illegal or prohibited substance during his career despite comprehensive testing at the world's best laboratories.”

That statement is true (though I might disagree that post-race testing for all of his races was done at “the world's best laboratories.”). But let's remember how many times cheating cyclist Lance Armstrong said he'd never failed a drug test:  “Twenty-plus-year career, 500 drug controls worldwide, in and out of competition. Never a failed test. I rest my case,” he said in May 2011, a little more than a year before he was stripped of his seven Tour de France titles because of doping.

But wait, there's more.

In addition to a complimentary quote from Bob Baffert, who trained Maximum Security for the second half of his 4-year-old campaign in 2020, there is this closing argument: “MAXIMUM SECURITY is a bona fine CHAMPION that raced on water, hay, oats & fresh air!”

Everyone knows what this is about.

Less than three months after the announcement that Coolmore had purchased a significant share in the racing and breeding interests of Maximum Security – who was voted an Eclipse Award winner as outstanding 3-year-old male of 2019 – the colt's trainer, Jason Servis was among those rounded up and arrested by the FBI as part of a broad multi-year investigation into doping of racehorses in the United States.

The indictment states that Servis and co-conspirators “concealed the administration of PEDs from federal and state government agencies, racing officials, and the betting public by, among other things, concealing and covertly transporting PEDs between barns where Servis' racehorses were stabled, falsifying veterinary bills to conceal the administration of SGF-1000, and using fake prescriptions.”

Even worse, there were specific references to Maximum Security in the March charging document and the superseding indictment filed Nov. 5.

“Jason Servis, the defendant, was the trainer for a particularly successful racehorse, 'Maximum Security,' that briefly placed first at the Kentucky Derby on May 4, 2019, before racing officials disqualified the horse for interference,” the superseding indictment states.

“Following the Kentucky Derby,” it continues, “Maximum Security continued to compete in high-profile races, including in Oceanport, New Jersey. Servis worked with (veterinarians) Kristian Rhein and Alexander Chan, the defendants, among others, to procure and administer adulterated and misbranded PEDs, including the adulterated and misbranded PED SGF-1000 and invalidly administered Clenbuterol, for the purpose of doping several racehorses under Servis' control, including Maximum Security.”

The FBI intercepted a March 5, 2019, phone call between Servis and co-defendant Jorge Navarro in which Servis is heard recommending SGF-1000 to Navarro, adding, “I've been using it on everything almost.” Navarro allegedly admitted also giving SGF-1000 to some of his horses, then ended the call, saying: “I don't want to talk about this shit on the phone, OK.”

The indictment states that SGF-1000 is a “customized PED purportedly containing 'growth factors,' including fibroblast growth factor and heptocyte growth factor, which are intended to promote tissue repair and increase a racehorse's stamina and endurance beyond its natural capability.”

So it appears, based on the indictment, that Maximum Security was getting a little something more than the “water, hay, oats, and fresh air” claim in the ad.

No one is suggesting original owners Gary and Mary West or the Coolmore partners who bought into the horse had any knowledge of what is documented in the indictment.

The Maximum Security ad also includes an excerpt from a story in the Thoroughbred Daily News stating Servis may have been buying “some fake PEDs” from Chan and Rhein, based on comments from prosecutors at a pre-trial hearing.

The arrest of Servis came just over a week after Maximum Security had won the inaugural running of the $20-million Saudi Cup. The Saudis have yet to pay the purse money, pending the outcome of what they said is their own investigation into Servis. More likely, they're waiting to see what happens in court.

That could take a while. There is another pre-trial conference scheduled on May 14, 2021.

Maximum Security did win two of his four post-Servis starts while trained by Baffert, including the G1 Pacific Classic at Del Mar. He was retired following a fifth-place performance in the G1 Breeders' Cup Classic at Keeneland, finishing behind two Baffert barnmates – winner Authentic and runner-up Improbable – Global Campaign, and Tacitus. He beat race favorite Tiz the Law.

I'm not going to knock Maximum Security, who could turn out to be a great success at stud. As the late Hall of Fame trainer Charlie Whittingham is often quoted as saying, “Never say anything bad about a horse until he's been dead at least 10 years.”

But we know from other sports that suspected cheating has consequences. Barry Bonds, Major League Baseball's all-time leading home run hitter and single-season record holder, has been shut out of the Baseball Hall of Fame. So, too, have Roger Clemens, Sammy Sosa, and Mark McGwire, all with Hall of Fame qualifications but accused of using steroids. None failed a drug test.

Servis (and by way of extension Maximum Security) is innocent until proven guilty, but the charges against him and the others named in the case are serious. If Servis is found guilty, no amount of spin is going to chase the dark clouds away from his most accomplished horse.

That's my view from the eighth pole.

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The Week in Review: After Guilty Pleas, Will More Trainers Be Charged?

The next chapter in the scandal that has rocked Thoroughbred racing played out last week when Scott Robinson and Sarah Izhaki both pled guilty to charges relating to the sale and distribution of performance-enhancing drugs used to dope race horses. It was an important development, but the bigger story is this: will it lead to a new and extensive list of indictments against trainers and others who so far have not been charged? That possibility certainly exists.

For now, everything is speculation and the Department of Justice has not said whether or not Izhaki and Robinson are cooperating in the probe, but it’s not hard to connect the dots and by doing so you come up with a scenario whereby the two are in fact cooperating with authorities and are ready to name names.

That’s the most obvious explanation for why they were given a deal by the Department of Justice. In the original indictments, which were announced in March and included 27 individuals, including high-profile trainers Jason Servis and Jorge Navarro, Robinson was charged with three counts of drug adulteration and misbranding conspiracy. The maximum sentence for each count is set at five years. A superceding indictment was released last week in which Robinson is now charged with just one count. Izhaki was originally charged with one count of drug adulteration and misbranding conspiracy, plus a charge of smuggling, which carries a maximum sentence of 20 years. In the superceding indictment, the smuggling charge has been dropped.

“It’s a very logical assumption that they are cooperating and that’s why they have accepted the plea they did,” said former Meadowlands and Monmouth executive Hal Handel, who once served as a deputy attorney general in New Jersey. “It looks like they have thrown themselves on the mercy of the justice department. That seems to be where these two are.”

Izhaki will be sentenced Dec. 2 and Robinson will be sentenced Jan. 15. Should one or the other be hit with something considerably less than five years, that will be another indication that they are cooperating with authorities.

Another story to watch is what happens with Ashley Lebowitz, who was among the 27 indicted in March. She is Izhaki’s daughter and that may mean that she, too, will make a deal.

According to owner and attorney Maggi Moss, who once served as the chief prosecutor of Polk County, Iowa, the give-and-take at the federal level often involves plaintiffs who are happy to implicate others if that means a reduced sentence for them.

“In federal court, the bigger names you get, the more names you get, the more reliable the information is, you continue to decrease your sentence,” said Moss.

If there was ever going to be more dominos to fall after the original 27 indictments, it always stood to reason that more charges would come as a result of drug suppliers cooperating with authorities. Much more so than anyone else, they know who was using what.

“Scott Robinson and Sarah Izhaki represent the supply side of a market of greed that continues to endanger racehorses through the sale of performance-enhancing drugs,” Acting U.S. Attorney Audrey Strauss said last week in a statement. “Each of these defendants provided the raw materials for fraud and animal abuse through the sale of unregulated and dangerous substances.”

It appears that Robinson is the bigger fish of the two.

“From at least in or about 2011 through at least in or about March 2020, Robinson conspired with others to manufacture, sell, and ship millions of dollars worth of adulterated and misbranded equine drugs…” read the statement from Strauss.

Robinson’s business was apparently so lucrative that he has been ordered to pay the government $3,832,318.90 as part of an order of forfeiture/money judgment. A forfeiture is the involuntary relinquishment of money as a legal obligation for the commission of crime.

So far, less is known about Izhaki’s business According to the Department of Justice’s statement, between February 2018 and November 2019, Izhaki sold and delivered “tens of thousands of dollars of erythropoietin,” which is a blood builder drug. She was bringing the drug in from Mexico, thus the smuggling charge.

“These two people appear to be important defendants,” Moss said. “They were the ones where people were getting the drugs from. They are important links and it would appear to me that they obviously have lists of who they sent drugs to. You wouldn’t think they’d be doing what they were doing and only selling their drugs to two or three people. There has to be a list of who bought this.”

That much seems certain as it’s hard to imagine that the only clients of Robinson and Izhaki were Servis and Navarro and a handful of other Standardbred and Thoroughbred trainers already indicted. If other trainers were buying from them, there should be a paper trail that amounts to a lot of smoking guns. That’s particularly the case with Robinson, who was using a website to sell his drugs to trainers. That would mean a record of the transactions and credit card receipts.

Does that mean they sold their goods to hundreds of trainers, dozens of trainers or just a handful? For now, that is anyone’s guess. But their plea deals have raised the possibility that the Servis and Navarro indictments will turn out to be just the beginning in what is already one of the ugliest stories in the sport’s history.

“If I were someone who was buying drugs from these guys, I’d be very afraid right now,” said Jeff Gural, the Meadowlands owner who worked behind the scenes with The Jockey Club to build a case against the cheaters. “There’s no doubt in my mind that these two (Robinson and Izhaki) are talking.”

 

Starship Jubilee Does It Again

Starship Jubilee (Indy Wind) continues to be one of racing’s best stories. Claimed for just $16,000 (off of Jorge Navarro) in 2017, she picked up the biggest purse of her life when beating the boys Saturday’s GI Woodbine Mile S. It was her 12th stakes win, her 19th overall win and pushed her career earnings over $2 million.

Trainer Kevin Attard now faces a tough decision concerning where she should run in the Breeders’ Cup, with the choices being the GI Breeders’ Cup Mile or the GI Breeders’ Cup Filly & Mare Turf. The Woodbine Mile was a “Win and You’re In” race for the Mile. That means Starship Jubilee is guaranteed a spot in that race and the $60,000 entry fee will be waived. Though it’s hard to imagine any scenario where she wouldn’t get into the Filly & Mare Turf, she is not guaranteed a spot, but the entry fee would also be waived for that race.

“Which race we go in is up in the air,” Attard said. “Obviously, we are excited because she ran a big race Saturday. She came out of the race in great shape. We’ll see how things transpire over the next little bit and try to decipher how the two races shape up and decide what direction we will go in.”

Starship Jubilee is the best horse based in Canada and was the 2019 Canadian Horse of the Year. This year, she won’t be eligible for that title. The Woodbine Mile was her first race this year in Canada and for a horse to be eligible for the Canadian Horse of the Year title, they must run at least three times north of the border.

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