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Judge Upholds Meadowlands Ban of Owners Associated with Indicted Trainer

A federal judge on Tuesday dismissed a lawsuit filed by eight harness owners who were banned at the tracks owned by Jeff Gural due to their ties with indicted trainer Rene Allard. Gural owns the Meadowlands in New Jersey and Tioga Downs and Vernon Downs in New York.

The case was dismissed without prejudice, meaning the plaintiffs may file a subsequent suit on the same grounds.
Despite the allegations against Allard, he had been cleared by the U.S. Department of Justice to train horses at a South Florida training center, as long as the horses under his care were not preparing to race. On Mar. 6, Gural announced that any owners who had horses with Allard would be banned at his tracks and their horses would be ineligible to race there. He also announced a ban against anyone who continued to have horses in partnership with the eight owners.

“To learn that people actually give this guy horses to train after what was discovered by the Federal investigation boggles the mind,” Gural said at the time. The owners, Kap Singh, Lawrence Dumain, Ira Wallach, Brian Wallach, Yves Sarrazin, Erin Hill, Bruce Soulsby and Allen Weisenberg filed suit, alleging violations of federal antitrust laws and state competition laws. The group alleged that Gural was attempting to “sanitize their illegal actions by attempting to smear Plaintiffs with the misdeeds of Rene Allard.”

United States District Judge Lawrence Khan disagreed, upholding the ban. “Judge Kahn clearly saw that this antitrust theory has no legs and did the right thing by dismissing the whole case,” Gural said in a statement. “This lawsuit and its outcome have only reinforced my resolve to purge PEDs from our industry even if it means defending baseless lawsuits like this or initiating my own legal actions against those who pose obstacles to our efforts, should I have to. Our industry requires, in my view, owners to be beyond reproach and held accountable for the training decisions they make.”

More so than any other track owner or manager in either Harness or Thoroughbred racing, Gural has been vigilant in his efforts to keep alleged dopers out of his tracks. Several of the Harness horsemen who were indicted in March, 2020 for their alleged involvement in a widespread scheme to dope racehorses had already been banned at the Gural tracks. Allard had been banned at the Meadowlands since 2013.

He has 4,570 career wins and his horses have earned over $53 million.

Allard, 36, was charged with misbranding and drug alteration, which carries a maximum sentence of five years. He continues to fight the charges.

During its investigation of Allard, the FBI intercepted a disturbing phone conversation between Ross Cohen and Louis Grasso, two others under indictment, discussing the deaths of horses trained by Allard who died after being given illegal drugs. Cohen referred to Allard's operation as the “Allard death camp.”

According to a deposition given by FBI agent Bruce Turpin, a raid of Allard's barn produced multiple empty syringes, the drug Glycopyrrolate, epinephrine and vials labeled “Thymosine Beta” and “for researching purposes only.”

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Feds, Fishman Spar in Bail Revocation Hearing

Federal prosecutors and the legal team for Seth Fishman continue to spar over allegations by the government that the indicted Florida veterinarian should have his bail revoked for allegedly still selling purportedly performance-enhancing drugs (PEDs) while awaiting trial in the international racehorse doping conspiracy case.

The latest legal salvo, fired Dec. 17 by prosecutors in the form of a letter, comes three days before Fishman's Dec. 20 bail revocation hearing in United States District Court (Southern District of New York).

This latest plot twist in the case began Dec. 6, when prosecutors told the judge that Fishman's administrative assistant permitted Federal Bureau of Investigation agents to search her workplace, and the search allegedly yielded evidence that Fishman is still selling drugs.

One week later, Fishman replied with a court filing of his own that stated that employee “had little choice but to succumb to the demand by agents that they be permitted to search the premises” because at the time her consent to the search was obtained “she was at risk of prosecution for the very offenses with which Dr. Fishman was charged.”

Friday's new filing made three points:

“First, Fishman attempts to justify his continued manufacture of drugs by claiming a 'good faith' effort to meet the requirements of the 'export exemption' set forth in 21 U.S.C. § 381(e),” the Dec. 17 filing stated.

“Second, the defendant suggests that the Government has implicitly condoned his ongoing criminal activity insofar as Fishman and/or his former counsel have claimed that Fishman holds an intention to continue his drug sales in conformity with the foreign sales exemption of 21 U.S.C. § 381(e),” the filing stated.

“Finally, the Government notes that Fishman points to no authority for the proposition that a proffering witness cannot provide voluntary consent to a search,” the filing stated.

Fishman is charged with two felony counts related to drug alteration, misbranding, and conspiring to defraud the government. His trial is tentatively expected to start in mid-January.

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Attorneys For Servis Say FBI Misled Court On Wiretaps, Want Evidence Suppressed

Attorneys for indicted trainer Jason Servis filed a motion on Monday in U.S. District Court for the Southern District of New York asking Judge Mary K. Vyskocil to suppress evidence obtained through Title III wiretaps on the telephones of Servis, trainer Jorge Navarro and veterinarian Kristian Rhein in connection with the March 2020 federal indictments of more than two dozen people alleged to be involved in a multi-state racehorse doping scheme.

Attorneys Rita Glavin and Michael Considine said in court filings that the FBI in seeking the wiretaps made “material misstatements and omissions” that were “deliberate or reckless” in seeking the wiretap on Servis authorized on April 30, 2019, and extended three times. The attorneys said the wiretap resulted in the “interception of thousands of communications” of Servis, one of several trainers indicted in the federal investigation that began in 2017.

First, the attorneys state, the FBI chose not to inform the court that no horses under Servis' care failed any post-race drug tests during the span of the investigation. “By contrast,” they wrote, “horses trained by Thoroughbred horse trainer Bob Baffert (who has never been criminally charged) have failed numerous post-race drug tests in the last several years, most recently failing a post-race drug test for the 2021 disqualified Kentucky Derby winner, 'Medina Spirit.'” (Editor's Note: A hearing has yet to be conducted on Medina Spirit's positive drug test and he has not been disqualified from the Derby.)

Secondly, the attorneys allege, FBI agents consistently misstated the nature of two drugs mentioned in connection with Servis: SGF-1000, a product marketed by Kentucky-based Medivet Equine, and the bronchodilator clenbuterol.

“SGF-1000 was repeatedly tested prior to the wiretap and found to contain no performance enhancing substances,” the attorneys claim, citing a number of emails between different parties and the Hong Kong Jockey Club, whose lab apparently tested the substance that is said to contain sheep collagen as a primary ingredient. Despite that, the attorneys wrote, an FBI agent seeking the original wiretap or extensions “repeatedly described SGF-1000 to the court as a 'growth factor' and 'performance enhancing substance.'”

The attorneys' memorandum in support of the motion to suppress also quotes from intercepted comments by Rhein (a part owner of Medivet) that SGF-1000 does not contain any illegal substances. “Everything we've done is by the letter of the law,” Rhein told Servis in one conversation.

On Tuesday, Rhein pleaded guilty in federal court to administering and distributing adulterated and misbranded drugs and faces three years in prison.

“In its zeal to secure and maintain the wiretap,” the attorneys claim, “the government also misled the issuing courts about clenbuterol, wrongfully characterizing it as a performance-enhancing drug that was banned by various state regulators. In fact, clenbuterol was expressly permitted in the jurisdictions Mr. Servis' horses raced. “Although local rules of the relevant jurisdictions provide that a horse cannot race when clenbuterol is present within their system above a certain threshold at the time of a race, none of Mr. Servis' horses failed a single post-race test during the period of the government's investigation. The government withheld this fact from the issuing courts as well,” the attorneys wrote.

Their final argument claims that the FBI “misled the court about the necessity for a wiretap of Mr. Servis' phone in its requirement to explain that 'normal investigative procedures have been tried and have failed or reasonably appear to be unlikely to succeed if tried or to be too dangerous.' … The government failed to take even the most basic of investigative steps with respect to Mr. Servis, and instead ran to the District Court for a wiretap as essentially its first investigative step.”

The motion also seeks suppression of evidence from wiretaps on the phones of Rhein and Navarro, the latter of whom has asked the court for a hearing to change his “not guilty” plea.

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Drug Company Sales Director Michael Kegley Pleads Guilty In Federal Doping Case

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that defendant Michael Kegley, Jr. pled guilty on Friday to his role in the distribution of adulterated and misbranded drugs with the intent to defraud and mislead, in connection with the charges filed in United States v. Navarro et al., 20 Cr. 160 (MKV). KEGLEY pled guilty before U.S. District Judge Mary Kay Vyskocil, and will be sentenced by Judge Vyskocil on Nov. 22, 2021.

Manhattan U.S. Attorney Audrey Strauss said: “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.”

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.

According to the Thoroughbred Daily News, Kegley's testimony during Friday's proceedings included the following statement: “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.”

U.S. Attorney Strauss praised the outstanding investigative work of the FBI New York Office's Eurasian Organized Crime Task Force and its support of the FBI's Integrity in Sports and Gaming Initiative.

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

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