In December 2022, Chan had cut a deal with prosecutors that involved pleading guilty to a single felony charge of drug adulteration and misbranding in exchange for two other felony counts against him being dropped.

Chan's filing with the court on Monday was submitted without an attorney acting on his behalf.

But the 10-page motion laid out a cogent case for reconsideration based on an amendment recently adopted by the United States Sentencing Commission that allows for downward revisions of sentencing levels for petitioners who have zero criminal history points on their records.

According to Chan's filing, the new sentencing commission guidelines allow, in certain cases, for retroactive recalculation of the “offense levels” that are used to determine prison terms, so long as the offenses didn't involve things like violent behavior, the use of weapons, sex crimes, or hate crimes.

Chan is arguing that a recalculated offense level in his instance would reduce his sentence to a 24-to-30 month prison term, and he is asking the court to revise his imprisonment to the lowest end of that tier because of his record of good behavior while jailed at Fort Dix, a low-security federal correctional institution in New Jersey.

Chan wrote in his motion that he has “pursued [computer] programming to a greater degree than any other similarly situated inmate and has been free from disciplinary actions.”

Chan was arrested in March 2020 as part of a series of coordinated law enforcement sweeps in the years-long federal investigation of a network of more than 30 horsemen, veterinarians, and equine pharmaceutical suppliers who ended up facing charges.

Jason Servis | The Jockey Club of Saudi Arabia

In the lead-up to sentencing, federal prosecutors had described Chan in court documents as “a former veterinarian for the New York Racing Association (NYRA), and a practicing veterinarian for over 15 years [who] abdicated his duty of responsibility to the horses under his care.”

The feds' portrayal of Chan continued: “After spending three years as a traveling veterinarian for NYRA, the defendant worked under convicted co-defendant Kristian Rhein at Empire Veterinary Group and soon after began providing and/or administering adulterated and misbranded drugs without valid prescriptions, knowing that their use violated New York's racing rules, medical ethics, and the law.”

Chan's own presentence report filed by his legal team had stated that, “Dr. Chan's sterling career and the beautiful young family it supported have since been destroyed because-at the direction of his boss and the owner of the veterinary practice in which he worked, Dr. Kristian Rhein-Dr. Chan participated in the distribution of misbranded substances for use on Thoroughbred racehorses.”

According to a trove of wiretap evidence, plus implicating testimony from plea-bargaining defendants, Klein and Chan's client list included the now-imprisoned former trainer Jason Servis, whom the feds alleged doped almost all the horses under his control in early 2019.

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“Just the facts, ma'am.”

The iconic line “just the facts, ma'am” is associated with the character of Sgt. Joe Friday from the 1950s cop show “Dragnet” starring actor Jack Webb in the title role of an LAPD detective. You may be too young to remember the series, but it's likely you're aware of the phrase, because it's become a part of the lexicon. That's what happens when things get repeated over and over again.

Three years ago, when the government indicted and arrested 27 individuals (it went up to 31) in what it called a wide-ranging “doping” scheme, most of us heard about the “drug” SGF-1000 for the first time. Since then, we've heard of it over and over again. This substance was specifically associated with two high-profile trainers, Jorge Navarro and Jason Servis, who'd been under investigation and were caught on tape admitting to each other that they'd used it on most of their stock.

Servis trained Maximum Security (New Year's Day), a Gary and Mary West homebred who finished first in the $20 million Saudi Cup three years ago with Coolmore as a partner. Maximum Security has yet to be declared the winner, because the following month the government issued the indictments that named the colt as the most famous recipient of SGF-1000. After this, the Saudi regulator paused purse distribution from the race, pending the outcome of its own investigation of the government's case.

In the indictment and subsequent filings, the government referred to SGF-1000 as a “customized PED,” and that label as a performance-enhancing drug has stuck. Press coverage has repeatedly referred to it as a PED and “dope.” At this stage, “dope” and “SGF-1000” are as synonymous as “dope” and Epogen, or “dope” and customized analgesics, or “dope” and “red acid,” some of the other PEDs mentioned in the indictment.

Three months ago, in early December, Servis pled guilty to two charges: a felony count of misbranding and adulterating a generic version of unprescribed clenbuterol, and a misdemeanor count of misbranding and adulterating related to SGF-1000 use. Servis admitted to judge Mary Kay Vyskocil that Maximum Security, while under his care, had been administered SGF-1000 by a veterinarian. Because SGF-1000 is the only substance that the government has said was administered to Maximum Security, its use and chemical makeup are of importance to the Saudis as they close in on a decision.

Widespread Use

It's important to understand that the government's case wasn't about “dope” per se; there are no federal laws about the doping of racehorses. Instead, the government relied on felony counts related to the misbranding and adulteration of substances used in interstate commerce under the Federal Food, Drug, and Cosmetic Act to indict and convict these individuals.

In almost all of these cases, however, the misbranded and adulterated substances were bona-fide PEDs, and the government could rightfully say that it had stopped several doping schemes. However, in the specific matter of SGF-1000, it appears the government was aware the substance wasn't a PED since at least September of 2019.

During the course of the last three years, I've read more than a thousand pages of court filings and spoken to several trainers who've admitted off the record to using SGF-1000 on some of their horses. None of them thought he was “doping” horses or doing anything illegal. Some are big names in the business, others smaller trainers.

One told me he had three horses shipped to him in Florida from a facility in New York with three bottles of SGF-1000 for his vet to administer. “Their vet prescribed it. I don't know if it helped,” this trainer said. “It was hard to tell, but the show horse people in Wellington seemed to feel it helped horses recover from work. I was told it was popular with them.”

I asked him if he'd speak on the record. “No, I'd get crucified in this environment we're in now with the Feds and drugs and HISA,” he said. “But SGF-1000 has been around for a while.”

As far back as 2014, Medivet, the company that sold SGF-1000, was openly advertising the product in print trades, radio racing shows, and online, and a rep for the company posted this on Facebook on Nov. 24, 2014: “To all my Facebook friends who are involved with horses: I want to share with you two great products that are drug free and chemical free that will maximize the health and wellness of your performance horse.” This was an overture to the dressage and eventing crowd in Wellington. One of the products he described was SGF-1000, of which he said, “USEF [US Equestrian Federation] approved for competition.” I don't know if this was true or not about USEF, but Medivet and its reps were openly hawking the substance in broad daylight, not peddling it conspiratorially under the cover of darkness.

“There was nothing nefarious about it,” said another, bigger New York-based trainer, who also spoke on the condition of anonymity and admitted that a multiple Grade l winner of his now at stud in Kentucky was once on it. “Dr. [Kristian] Rhein–he had a big practice in New York–dispensed it as something that was great for recovery and wellbeing. He was a good vet, especially on soundness. He'd trot a horse up and back and tell you right away where a problem was. I didn't think anything of it, and I think it did help my horse recover after works or races. A vet always prescribed and administered it. You know, Dr. Rhein had a lot of clients, and everyone knew everyone else was using it until they put it out on that overnight in September that no one was permitted to use it. When that came out, I got scared, and I never used it again after that. No one told us it was illegal before.”

In September of 2019, NYRA, at the direction of the New York Gaming Commission, put a note on the bottom of its daily overnights saying the use of SGF-1000 was prohibited. Perhaps the FBI alerted the commission and NYRA that SGF-1000 use on its grounds was widespread. By this time, the FBI already had Dr. Rhein, one of the co-owners of Medivet, boasting on tape that he'd sold “assloads” of the substance, and we've subsequently learned from court filings that Medivet was making “millions” from the sale of it. All of this makes it obvious that SGF-1000 was being used by more than just Navarro and Servis.

On Aug. 3, 2021, Dr. Rhein pled guilty in federal court to a felony charge of drug misbranding and adulteration. The government has a list of Dr. Rhein's clients who purchased and used SGF-1000 and is aware that some of these trainers had horses for well-known owners, some of whom belong to elite industry organizations. From court filings, the government also is aware of the labs that made the SGF-1000 – “unregistered facilities,” according to the Department of Justice, in California and Australia. These labs shipped SGF-1000 to Medivet's facility in Kentucky for packaging. The government's case that SGF-1000 was misbranded is convincing.

Just the Facts, Ma'am

As far as SGF-1000 is concerned, however, it appears that government prosecutors, who repeatedly called it a PED in court filings and press releases, may not have been correct. In a court filing that noted an FBI application to search emails of one of the owners of Medivet, an FBI agent wrote this in part about SGF-1000: “I have further learned that the Hong Kong Lab did not detect the presence of any growth factors or growth hormones in the sample that was analyzed, but did detect the presence of sheep amino acids.”

A person with direct knowledge who is not authorized to comment on the matter told me FBI investigators don't believe SGF-1000 was a PED, unlike other substances that were named in the indictments.

According to court filings, New Jersey regulators and a confidential source working with the FBI took blood samples from Maximum Security after he was administered SGF-1000 in early June of 2019. The confidential source dispatched the samples to the Hong Kong Jockey Club lab, and the testing came back negative for PEDs. During this time frame the HKJC responded with this email note – obtained from court filings – to the confidential source: “We had analysed (sic) the content of the SGF 1000 from Medivet some years ago. It is listed to contain a combination of growth factors, peptides, proteins, and signal molecules obtained from ovine placental extract. No detectable amount of growth factors was found but collagens common to ovine or bovine origin were detected.”

SGF-1000 originated in Australia and since 2014 has been tested by a number of other reputable organizations with no relationship to Medivet, including the Racing Medication & Testing Consortium (RMTC), Australian authorities in 2015, and UC Davis Maddy Laboratory, and not once in these tests has it been positive as a PED, according to court filings. Each time, however, it tested for sheep collagen, which is widely used in the manufacture of facial creams and other human skin-care products.

Government Test

According to court filings, government agents had obtained a bottle of SGF-1000 by July of 2019 and “sent the substance to a laboratory in Hong Kong for testing to determine the precise chemical contents of that substance.”

The thinking here seemed to be that SGF-1000 didn't test in Maximum Security's blood, but it would from the actual sample straight out of the bottle.

The results of that test have never been publicly revealed. If SGF-1000 did contain PEDs, wouldn't the government have publicized it? If it didn't test positive, the government wouldn't be under any obligation to share the results, because the charges of misbranding and adulterating have nothing to do with whether a substance is a PED or not.

Tellingly, after Servis pled guilty to the misbranding charge for SGF-1000, the DOJ press release did not use the words “performance-enhancing drug” or “PED” in reference to SGF-1000 – an about-face from before; instead, the government noted that Servis was guilty of having SGF-1000 administered to horses after NY regulators said the substance was illegal to use in Sept. of 2019. The federal misdemeanor charge was essentially for a state regulatory violation.

The government had a chance to reveal the results of its 2019 test but never did.

The government had access to the “unregistered” labs that manufactured SGF-1000 and could have readily exposed the ingredients that went into the formulation of the substance, but it never did.

Based on the standing facts, SGF-1000 was a misbranded substance, but it was not a PED.

And by the way, the exact line “Just the facts, ma'am” was never uttered by Sgt. Joe Friday, either. It's an urban legend. That's what happens when something gets repeated over and over again.

Sid Fernando is president and CEO of Werk Thoroughbred Consultants, Inc., originator of the Werk Nick Rating and eNicks.

The post Taking Stock: Is SGF-1000 a PED? appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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During his plea hearing in July, Kegley stated: “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.”

Kegley's brother-in-law, Dr. Kristian Rhein, received a three-year prison sentence on Wednesday for his involvement in the same case. Trainer Jorge Navarro was last month sentenced to five years in prison.

The sentence requires Kegley to forfeit $3,310,490, equal to the amount of the illegal substances the government seized, but a court order states that if he makes the payment within two years of his prison release he will only need to pay $192,615.

According to the allegations contained in the Superseding Information, the prior Indictments[1], other filings in this case, and statements during court proceedings:

The charges in the Navarro case arise from an investigation of widespread schemes by racehorse trainers, veterinarians, performance-enhancing drug (“PED”) distributors, and others to manufacture, distribute, and receive adulterated and misbranded PEDs and to secretly administer those PEDs to racehorses competing at all levels of professional horseracing. By evading PED prohibitions and deceiving regulators and horse racing officials, participants in these schemes sought to improve race performance and obtain prize money from racetracks throughout the United States and other countries, including in New York, New Jersey, Florida, Ohio, Kentucky, and the United Arab Emirates (“UAE”), all to the detriment and risk of the health and well-being of the racehorses. Trainers who participated in the schemes stood to profit from the success of racehorses under their control by earning a share of their horses' winnings, and by improving their horses' racing records, thereby yielding higher trainer fees and increasing the number of racehorses under their control. Veterinarians and drug distributors, such as Kegley, who worked as the director of sales for an unregistered distributor of equine drugs, profited from the sale and administration of these medically unnecessary, misbranded, and adulterated substances.

Among the misbranded and adulterated PEDs marketed and sold by Kegley was the drug “SGF-1000,” which was compounded and manufactured in unregistered facilities. SGF-1000 was an intravenous drug promoted as, among other things, a vasodilator capable of promoting stamina, endurance, and lower heart rates in horses through the purported action of “growth factors” supposedly derived from sheep placenta. Despite marketing, selling, and administering SGF-1000, Kegley acknowledged in intercepted calls that he, along with a co-defendant involved in the sale of SGF-1000, did not know the actual contents of SGF-1000. Nevertheless, Kegley's sales of that drug persisted, aided by the claim that SGF-1000 would be untestable in horses by law enforcement.

Read more about SGF-1000 in our previous reporting here and here.

Read more at the Thoroughbred Daily News.

The post Drug Company Sales Director Michael Kegley Sentenced To 30 Months In Prison appeared first on Horse Racing News | Paulick Report.

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U.S. District Judge Mary Kay Vyskocil ordered Rhein to surrender himself before 2 p.m. on March 7 to begin his sentence, which the court recommended he serve at FCI Otisville or “as close to New York as possible.” Rhein was also ordered to pay a $10,000 fine in addition to $729,716 in restitution to victims of his offense. As with previous defendants, public-facing court documents do not reveal exactly who the “victims” of his crimes are, or how restitution will be distributed to them. Schedules for restitution payments with previous defendants have been filed under seal. He may share responsibility for that restitution amount with other co-defendants, in the event others are ultimately ordered to pay restitution on the same count of the indictment.

Rhein had previously agreed to forfeit the proceeds he took in from his offense, which total $1,021,800. Previous orders from the court required he pay more than half that total before his sentencing hearing.

Rhein was a racetrack-based veterinarian operating primarily in New York, where he was accused of giving horses clenbuterol without valid prescriptions and selling SGF-1000 to trainers, including co-defendant trainer Jason Servis. Rhein was later revealed to own a share in MediVet Equine, which sold SGF-1000. Intercepted communication between Rhein and others revealed he did not know exactly what was in the substance, except that he was confident it was untestable.

Read more about SGF-1000 in our previous reporting here and here.

MediVet sales director Michael Kegley changed his plea from not guilty to guilty last summer, around the same time as Rhein. He is due to be sentenced Jan. 6.

The post Veterinarian In Federal Drug Case Gets Three Years In Prison appeared first on Horse Racing News | Paulick Report.

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Rhein has entered a plea of guilty to a charge of drug adulteration and misbranding for his role in what the government says was a broad conspiracy between veterinarians, drug manufacturers, and trainers to illegally dope racehorses. Rhein is specifically accused of giving horses clenbuterol without a valid prescription and peddling a substance called SGF-1000 to racetrack clients, including co-defendant Jason Servis.

It had previously been established that Rhein owned a stake in MediVet Equine, which sold SGF-1000, and that despite this, Rhein didn't seem totally clear on what was in the drug.

The prosecutors' sentencing documentation touched on excerpts from intercepted phone calls not previously revealed which captured Rhein musing about what SGF-1000 may or may not actually contain.

Read more about SGF-1000 in our previous reporting here and here.

In one call with an unidentified third party, Rhein said that he didn't even believe the substance contained growth hormone, despite being advertised that way for several years. Prosecutors said he “had not confirmed” this. Further, Rhein also seemed to have his own theories about regulatory testing.

“Just because they can test for it, it doesn't mean they will,” Rhein allegedly said. “Now if it has growth hormone, I mean, it costs them a lot of money to test. A lot of money. And the second thing is, how long is something in there. Well if we're giving it five to seven days out then we're fine. It's not gonna hang around. It's – nothing hangs around long. EPO doesn't hang around that long.”

Previous documents had revealed that Rhein became worried at one point that there could be federal scrutiny of SGF-1000 because it wasn't approved by the Food and Drug Administration (FDA), and that he was part of a brainstorming session on how to avoid detection. One of the things Rhein considered was whether the drug should be renamed to something more innocuous.

“What was the [expletive] name that somebody told me? It was a good name,” he said. “It was kinda cheesy, but shit it was good, it was a one-word name, like … you know like … like Encore, something like that … Repair … RepairRx. Like Repair Treatment.”

In fact, Rhein seemed to know back in August 2019 that there was more than a potential for law enforcement to become interested in SGF-1000. Rhein learned around mid-August that Servis had been approached and questioned by law enforcement. He then called Servis assistant Henry Argueta, who was included in the first round of indictments in March 2020 but absent from a superseding indictment in November 2020. Rhein asked Argueta whether the FBI or the “DA office from Manhattan” had approached Servis. It's not clear how he knew which agencies may be involved, but he also appeared to anticipate that his vehicle may become subject to searches. He also seemed to believe Servis' phone may be tapped, asking Argueta how he could “get in touch with Jason” without making anyone suspicious.

Rhein seems to have panicked at this time, calling an unidentified representative of an unnamed drug testing laboratory and explaining the situation with SGF-1000.

“Either cease and desist or you're gonna go to jail,” the person told Rhein. “One or the other. What do you want to do? … I'm saying if you want to stay out of jail don't use it.”

According to prosecutors, Rhein did not cease using the drug, which he often billed as acupuncture to conceal its use from owners.

Rhein later told fellow veterinarian and co-defendant Dr. Alexander Chan to “be careful” regarding his use of the drug and that “more than likely you are going to be watched.”

Prosecutors are advocating for a three-year sentence in federal prison.

The post Documents Reveal Rhein, Servis Knew Law Enforcement Was Watching In August 2019 appeared first on Horse Racing News | Paulick Report.

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The response document addressed a series of separate and joint motions from veterinarian and drug maker Dr. Seth Fishman, drug sales representative Lisa Giannelli, Jordan Fishman, veterinarians Dr. Erica Garcia and Dr. Alex Chan, and trainers Jason Servis and Christopher Oakes. Although the defendants structured their arguments somewhat differently, they are asserting that the wire tap evidence was acquired illegally — both because FBI investigators did not use other investigative techniques available to them, and because the applications for new and ongoing surveillance were deceptive to the judges who signed off on them.

Prosecutors, predictably, dispute the defendants' assertions, citing legal standards regarding probable cause and existing evidence justifying each new request. Their response was primarily designed to address the legal arguments at hand, not specifically to reveal to the public new information about the case. For that reason, there are some snippets of transcript where names or other details are omitted or redacted, so some of the new transcripts lack context. Still, there were a few new details of interest to the racing public following the case at home.

You can read the full response document here.

• Nick Surick was the origin point for some defendants in this case. When drug adulteration and misbranding charges were first announced against 27 defendants in March 2020, prosecutors said (rather cryptically) that those March arrests were the fruit of a different investigation that had bled over into horse racing. We still don't know what that investigation was, but we know that the FBI began looking at Jorge Navarro because of his association with Standardbred trainer Nicholas Surick. Navarro entered a guilty plea in August. Surick, originally charged with drug adulteration and misbranding conspiracy and obstruction, was left off a superseding indictment filed in November 2020, but his case is not listed as closed in the federal system. It remains unclear whether he has taken a deal with prosecutors. The FBI became aware of Navarro when it intercepted its communications with Surick in January 2019, at which point it had been investigating Surick “and others” for “months.”Navarro is framed in the document as “both a facilitator of Surick's doping activities and as a kind of doping 'mentor.'” Navarro and Surick had conversations about Northern Virgin, a horse Surick allegedly hid twice from racing officials in order to avoid their taking an out-of-competition sample from the horse. Surick said he had administered a blood builder to the horse relatively recently when they arrived to test the horse.
• Navarro and Servis may have had help from track security to conceal their doping activities. The document contains a number of transcripts of conversations between Navarro and Servis as they compared doping programs and shared information about testing and security. Each of them made reference to having connections with individuals in racetrack security who let them know when searches were imminent. The document does not specify who those individuals may be or which racetrack one or both connections were located.
• Servis' program involved two versions of clenbuterol. Conversations between Navarro and Servis also refer to “regular” clenbuterol and “other” clenbuterol, which they believe have different detection times in drug tests. Prosecutors say that both versions of clenbuterol were used without valid prescriptions. It's never specified what the difference is between the two, but regulators have reported finding compounded clenbuterol in the course of investigations which is designed to be significantly more potent (ten times more potent, in some cases) than the commercially-available, Food and Drug Administration (FDA) approved version. Prosecutors speculate that the use of clenbuterol, which is considered a legitimate therapeutic drug, in this context is likely to point to abuse of the drug for its anabolic effects.
• Dr. Kristian Rhein may have been party to questionable activities beyond the scope of this case. Rhein, who was the track veterinarian for Servis and many others, entered a guilty plea in this case in late July and agreed to forfeit more than $1 million of proceeds he generated from illegal drug sales. Apparently, he knows where some metaphorical bodies are buried on the backstretch — in an intercepted conversation with Servis, Rhein recalled an unnamed individual whom Servis had been complaining about.”He is such a little bitch,” Rhein said. “He is just a little sawed-off bitch. I worked for him. I mean I worked for him. He had me shock waving horses. He would leave me these notes. They were hidden in his drawer and then we used to use Decadurabalin [Deca-Durabolin, a trade name for anabolic steroid nandrolone]. I used to use Winstrol [a steroid] and he was like 'Don't you dare put that on the bill.”

  “Wow,” Servis said.”I'm like … you know … so this guy, he talks out of both sides of his mouth,” Rhein said.

  “Yeah he does and one day somebody is going to write a fucking book,” Servis responded. “It is going to be a groom or a vet somebody and he is going to hang them all out.”

  “Yeah, believe me we could,” said Rhein. “I was there. I mean, I know these hypocrites. I mean I did all these guys work. I know who was using and who was not, who needed to, who didn't, I mean. I don't say it lightly, but shit. I was doing [several other individuals — not named in the document], I had all those barns. I was doing all their lameness. And these guys were the first ones that wanted you to do it, 'hey what can we do?' … Like I said, it is never on a bill. It is never on a bill. That is the problem.”

  (We don't know who he's referring to, either. Remember, tips can be emailed to us at Ask Ray.)

• Rhein was also giving off-label bisphosphonates. An intercepted call between Chan and Servis on June 17, 2019 discussed Rhein's use of Tildren — an FDA-approved bisphosphonate labeled for use in horses four years old and up. Chan said Rhein had been giving the drug to 2-year-olds “at like half dose.” Chan also told Servis (incorrectly) that the drug was cleared for horses three years old and up. Further, he incorrectly said “it's one of those things that's easy to test for but it's just they can't mark it property so they don't really know when you gave it. But you know now that they have the rule that it should be four and up and you really have no excuse if they found it in your 2-year-old. You know what I mean, but if like it was a 4-year-old then you could be like, 'Oh man it got it sometime before I got the horse' or something like that.” Read more about bisphosphonates here.
• Prosecutors say wire taps were the only way to uncover much of this evidence, because the defendants were careful. In addition to coordinating with each other to anticipate and evade barn searches and out-of-competition testing, the wire taps reveal that the defendants were cautious about who they offered their services to. FBI agents did not believe they could successfully plant an undercover agent in any of the trainers' or veterinarians' businesses to surveil them, and pointed out that monitoring outside barns, even using pole cameras and other hidden recording devices, would be more likely to be spotted than they would be to capture evidence of a horse being injected. Even if they did get video of an injection, it would not be enough to show what the substance was and whether it was adulterated. Besides those logistical challenges, conversations between Fishman and Giannelli made reference to whether unnamed potential clients could “be trusted,” suggesting that they were unwilling to do business with someone they thought may inform to officials on their program, or who may administer drugs in a way that would get them caught. One informant lost connection with Surick after rumors surfaced in October 2018 that the informant (also unnamed) had begun cooperating with law enforcement. Read more about the difficulties of investigating illegal drugs in racing in this commentary from the Paulick Report.
• Seth Fishman's operation was extensive and complex. While much of the focus on Medivet Equine seems to be its SGF-1000 and TB-1000 products, Seth Fishman's catalogue was much larger. In a phone call between Navarro and Seth Fishman, Navarro asked Fishman for “that amino acid injectable shit that you sent me” which prompted Fishman to later ask for more specificity, as he said he had “hundreds of products.” Fishman also said he created customized programs, and sometimes even customized substances, for each trainer client he had. His theory was that if one trainer were caught, regulatory authorities would immediately begin looking for the drug or drugs used by that person. Fishman believed he had a better chance at remaining in business if each substance combination was unique enough that the discovery of one wouldn't necessarily reveal others. Fishman told potential customers the benefits of using a non-commercially available (non-FDA approved) drug were that many were untestable. “Unless somebody turns you in to the race jurisdiction, no one is going to test for it because it's not known until it is known,” he said.
• Some defendants could not remember the names of the drugs they were using and did not seem to know what was in them. At various times, Navarro referred to SGF as HGF. Servis referred to Maximum Security having received the “KS” and was later corrected by Rhein to say it was “the SG.” Rhein, who was distributing SGF-1000, had a lot to say about how SGF-1000 could not appear in post-race tests, and if anything, would show up as collagen or maybe dexamethasone. (Note: we ran this 'SGF as dexamethasone' theory by testing experts, and they were clear it was virtually impossible for one drug to be confused with another in post-race testing.)But although Rhein said the substance would not test positive for any “growth factors,” he did not seem to understand whether SGF-1000 contained “growth hormone.” In one conversation with Servis, Rhein said, “So, but…between you and me, because [of] the testing, they called me from the test center here and I was like, 'What's up?' They go, 'Do you know anything?' So what they called it, they called it 'growth hormone.' They were like 'You're using some sheep growth hormone.'   I go, 'No, it has no growth hormone whatsoever in it.' And I said, 'It tested as collagen, which is a protein. A fine…there is nothing wrong with it.'  I told him the name of the gentleman that [had tested] it in California. I said 'His name is [redacted].' He goes, 'Oh, I know him.' I said, 'The Jockey Club had it tested. They were all freaked out, they thought it w'And he said, 'Listen, somebody dropped a dime on me.' And I was like, 'What?' They are like, 'Yeah.' So all we need to do…I'm not going to say anything to anything else. I'm just going to tell [co-defendant veterinarian] Alex [Chan] and people like that. Like it is not on any of our bills. It never is.”

  In a separate conversation with co-defendant Michael Kegley Jr., who has entered a guilty plea, Rhein said, “Make sure there is no growth hormone in there because if they are calling it that, and it is in there then we'll — we need to — but I can't imagine there is. There's no — I can't — I don't think a fetus [i.e., the source of the purported sheep placenta from which SGF-1000 is derived] has growth hormone in it. There's just — I don't — I don't think fetal placenta membranes have growth hormones. You know, I'll do some research tonight but I don't believe that's correct.

  “I think it could have something that stimulates it … Well here's the thing is, I don't think it does. And just because they can test for it, doesn't mean they will. Now if it has growth hormone, I mean, it costs them a lot of money to test. A lot of money. And then the second thing is, how long is something in there. Well if we're giving it five to seven days out then we're fine. It's not gonna hang around. It's — nothing hangs around long. EPO doesn't hang around that long.”

• When MediVet Equine did find out what was in SGF-1000, they hid it. Exhibit documents revealed a letter sent by the makers of SGF-1000 to the Racing Medication and Testing Consortium in September 2019, complaining that their product should not be called out by the organization as “illegal.” MediVet Equine provided a copy of test results from a test it ordered via Industrial Labs, showing that the substance was negative for IGF-1 and Follistatin. What MediVet Equine didn't tell RMTC was that the testing on SGF-1000 had come back positive for acepromazine, leavamisole, detomidine, pyrilamine, lidocaine, MEGX, xylazine, and caffeine. No further explanation is revealed in the document as to why those substances were present in the sample.
• Defendants seem to have a lot of information — or at least, they believe they have a lot of information — about drug testing. When consulted by a panicking Surick about attempts at out-of-competition testing for Northern Virgin, Navarro assured Surick that the “real EPO” (as opposed to “generic EPO” also referenced by the two men) would be testable for three days. At four days, regulators would “see a cloud but they don't know what the fuck it is … Now five days, you are good. Now with the one here, they can't find anything.” Fishman also boasted that one of his products, a blood builder, had been given to a horse in New Jersey who was out-of-competition tested 12 hours later. The test sample was sent to a laboratory in Hong Kong, and the test came back negative. Rhein also revealed he had some contact with testing officials.”I mean, I know because I met the guy inadvertently when The Jockey Club took a box of the SGF,” he told Servis. “They took it and I met the guy, and I met the guy down at the conference, and he goes, 'The Jockey Club.' And he saw the hat that I had on was the same [equine pharmaceutical] company, and he goes, 'Oh, man I just tested a box of that stuff.' And I go, 'What stuff?' And he goes 'MediVet. You've got a hat on—SGF. Yeah, Jockey Club sent it to me out in California. Yeah, it came back as just a bunch of collagen. Nothing interesting [unintelligible]. These guys think it's got something that can be like a PED.” He goes, 'There's nothing in it.' And he was the actual head of the testing lab.”
• We got a few more details about the drugging of Maximum Security. Servis' barn was the subject of at least two out-of-competition testing rounds in June 2019. on June 5, samples were pulled from Maximum Security, and test samples were pulled from other horses on June 3. Servis and assistant Henry Argueta (who was named on the original indictment but absent from the November 2020 superseding indictment) speculated that the commission may have been looking for clenbuterol administration outside of a prescription. Servis then called Rhein on June 5, seeming to seek reassurance that the out-of-competition test would be negative.
  Servis: Hey. So they've been doing some out-of-competition testing, which I have no problem with. Um, they took Maximum Security Monday and they came back again today. But Monday he got the KS. I just want to make sure we are all good with that.Rhein: Wait, what did he get?Servis: I'm sorry, I said “KS.” The, you know, your shot. The…

  Rhein: Oh, the SG.

  Servis: Yeah, that stuff.

  Rhein: Yeah—no, no, no. The Jockey Club tested it, and I met the guy who tested it way back when. It comes back as collagen. They don't even have a test for it.

  Servis: It will probably come up with [dexamethasone] probably, right?

  Rhein: Yeah, that's it. It will be dex. It will be dex. It will be like—that's it. And I've had them, I had them pull some stuff, and I was like, “Oh, [expletive], I wonder what will happen?” Nothing. Nothing. I mean and the guy said SGF doesn't even test close, thank god. But the only thing will be the AZM and you can just say he
  was like hives or something, but…

  Servis: Right. But they're not even going to ask me about it.

  Rhein: They won't, even.

  Servis: Because you're allowed to have that anyways. Dex, I mean.

  Rhein: He's allowed. He's allowed. So [unintelligible] I don't know. I've done it. I've had it tested. Jockey Club did it, and I've had at least three different times it's been tested on horses that I gave it the day before and nothing. Not a word.

  Servis: Yup.

  Rhein: There's no test for it in America. There's no testing. There's nothing.

  Servis: Okay, that's fine.

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As part of his plea agreement with prosecutors, Rhein has agreed to forfeit $1,021,800 of the proceeds he generated from the illegal drug sales, and to further pay over $700,000 in restitution to the victims of his crimes. Prosecutors did not specify who the victims would be for the purposes of restitution, only that a sealed list would be filed along with sentencing recommendations. Vyskocil also clarified with prosecutors that the restitution amount owed by Rhein could lessen if additional defendants are found or plead guilty.

Sentencing will take place at a later date, but the charge Rhein pleaded to carries a maximum recommended prison sentence of three years, with an additional possible sentence of one year of supervised probation. Vyskocil made clear to Rhein that she could decide to impose a higher sentence if she chose. Rhein could also face fines of $10,000, twice the gross gain of his scheme, or twice the losses to others as the result of his crimes, whichever amount is greatest.

Rhein specifically mentioned that he conspired with trainer Jason Servis to administer and conceal the administration of SGF-1000. Prosecutors revealed they had evidence collected from wire taps stating that SGF-1000 was untestable and demonstrating that trainers described anecdotal impacts of the drug on their horses' performance. Further, prosecutors had archived information showing that after drug makers realized there was regulatory scrutiny of SGF-1000, they changed their marketing to stop referring to it as a performance enhancer and vasodilator, and to begin referring to it as a homeopathic treatment. Prior to this change, the drug was also advertised to contain various growth factors, but that was also modified to evade scrutiny.

Read more about the evolution in the marketing of SGF-1000 in this Paulick Report feature published during the week of the indictments. 

Intercepted phone calls also allegedly contain discussions between Rhein and others about SGF-1000 being undetectable on post-race drug testing. Indeed, prosecutors say, based on the evidence they collected about the drug's use, it was not showing up on post-race tests.

Prosecutors also revealed they had evidence showing the shipment of SGF-1000 from an overseas manufacturer to MediVet Equine, a Nicholasville, Ky.-based company which claimed to be the originator of SGF-1000. Michael Kegley, Jr., former director of sales for MediVet Equine, changed his plea to guilty in late July 2021.

Also during Tuesday's hearing, prosecutors revealed they believed between $26 and $65 million in purses was collected by Servis while using drugs given by Rhein on their horses. They did not specify which horses or which races they were referring to. Rhein stated that the dates of his drug adulteration and misbranding stretched from December 2016 until March 2020.

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The federal case file does not indicate whether Navarro will change his plea in one or both counts.

Also on July 30, Vyskocil filed an order denying a series of motions from Navarro and other defendants to dismiss the charges against them. Several defendants had argued that they could not be charged under federal drug misbranding laws, in part because they did not commit those violations and in part because prosecutors could not identify legitimate victims of their alleged crimes.

Vyskocil asserted in her order that prosecutors were accusing the defendants of a conspiracy to commit violations of the Federal Food, Drug, and Cosmetic Act and that the alleged failure to identify specific and relevant victims of the crimes at hand does not constitute a valid reason to dismiss the case. Prosecutors have depicted the FDA and Customs and Border Protection as victims of the crimes, along with state racing regulators, since the misbranding and use of the drugs were designed to deceive and evade those agencies. Vyskocil stated those were appropriate and proper victims of the crimes alleged.

Some defendants had also tried to have the case dismissed on the grounds that the Horseracing Integrity land Safety Act (HISA) would soon supersede the authority of the FDA in horse racing under the Food, Drug and Cosmetic Act. Vyskocil also did not find that argument compelling, pointing out that HISA has not yet been enacted (it's scheduled to go into effect on or before July 2022) and that legal precedent cautions against the assumption that one new law will automatically alter authorities granted by a previous law. Besides, Vyskocil pointed out, HISA is not concerned with the misbranding of drugs, but rather the use of drugs in horse racing. The former is the basis for the federal charges against Navarro and his co-defendants.

On July 23, federal defendant Michael Kegley altered his plea to guilty in the case, admitting he marketed and sold adulterated substances to trainers and veterinarians, knowing there was no valid prescription for them and that they were not made in a FDA-approved facility. Earlier this week, a change of plea hearing also appeared on the docket for Dr. Kristian Rhein, who was alleged to help distribute SGF-1000, one of the drugs marketed by Kegley.

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