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Standardbred Owners File Suit Against Gural, Meadowlands For Exclusion Due To Allard Association

The following statement was released by the Meadowlands, Tioga and Vernon Downs and Jeff Gural on Friday, Aug. 27.

The Meadowlands, Tioga and Vernon Downs and Jeff Gural have been named in a lawsuit initiated by a number of Standardbred owners who allege to have been excluded from racing at the three tracks as a result of their patronage of trainer Rene Allard.

Allard was among more than 30 racing related individuals indicted and arrested in March 2020 by the United States Department of Justice for offenses relating to the systematic and covert administration of illegal performance-enhancing drugs (PEDs) to racehorses. He was later included in a superseding indictment filed in federal court in December 2020. The charges remain pending.

The plaintiffs named are Kapildeo Singh, Lawrence Dumain, Ira and Brian Wallach, Yves Sarrazin, Erlin Hill, Bruce Soulsby and Alan Weisenberg, who in their complaint admit that they have an interest in horses stabled by Allard in Florida over the winter of 2020-2021. The complaint alleges that the plaintiffs were the victims of a conspiracy by Gural to exclude their horses from racing at the three tracks to gain a “competitive advantage.”

“It's a little discouraging that when you're trying to clean up the drug problem, we now have to hire an expensive lawyer to defend us against this lawsuit, which essentially calls me dishonest,” said Meadowlands President Jeff Gural. “Worse yet, we get no cooperation from the horsemen who love to complain about the drugs but don't lift a finger to help us catch the perpetrators. The lawsuit is without merit. We will vigorously defend against these allegations and look forward to being vindicated in court.”

According to ustrottingnews.com, the complain was filed on Aug. 23 in the U.S. District Court Northern District of New York. An initial conference before Magistrate Judge Miroslav Lovric has been set for Nov. 24, 2021 at 10 a.m. via teleconference.

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Veterinarian Changes Plea, Agrees To Forfeit Over $1 Million Plus Restitution In Federal Case

Dr. Kristian Rhein, longtime racetrack veterinarian, entered a guilty plea Aug. 3 to one felony count of drug adulteration and misbranding in U.S. District Court. Rhein told Judge Mary Kay Vyskocil that he marketed and sold adulterated and misbranded drugs, specifically SGF-1000, to trainers for the purpose of enhancing performance. Rhein also admitted that he modified veterinary records to conceal administration of SGF-1000, as well as the administration of clenbuterol, which he said was not always given with a valid prescription.

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.

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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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After Judge Denies Motion To Dismiss, Navarro Expected To Change Not Guilty Plea

Trainer Jorge Navarro will likely become the latest in a string of federal defendants changing his not guilty plea, according to documents filed late Friday in an ongoing illegal drugs case. A change of plea hearing for Navarro is set for Aug. 11 before U.S. District Judge Mary Kay Vyskocil. Navarro is charged with two felony counts of drug adulteration and misbranding related to what prosecutors say is a complex ring of veterinarians, drug makers, and suppliers who worked together to manufacture, sell, distribute and use illegal medications to dope racehorses.

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.

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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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Navarro Among Handful Of Federal Defendants Filing Motions To Dismiss Drug Charges

Jorge Navarro, Dr. Seth Fishman, Jordan Fishman, Lisa Gianelli, Dr. Erica Garcia, Rick Dane Jr., Christopher Oakes, and Michael Tannuzzo have all entered documents in U.S. District Court asking a judge to dismiss charges against them related to drug adulteration and misbranding conspiracy.

Defendants Seth Fishman and Gianelli filed a motion to dismiss various counts of the superseding indictment last week, which was followed by letters of intent from attorneys for Navarro, Garcia, Jordan Fishman and Dane stating their intent to join in. The motion from Fishman and Giannelli's attorneys site a few different bases for the motion, particularly that the counts as written don't allege illegal actions under the Food Drug and Cosmetic Act, which is the basis for the criminal charges.

According to texts and phone calls intercepted by the FBI, Navarro requested misbranded or adulterated drugs from Fishman for administration to horses in his care, including X Y Jet, who died suddenly of an apparent heart attack in January 2020.

Their motion also casts doubt on who was supposedly deceived by their alleged activities involving misbranded drugs. The indictment stated that the drugs were designed to evade detection by state racing officials or tracks, but the defendants claim that misleading state officials and racetracks isn't a federal crime under the Act.

Oakes' motion includes similar language, while Tannuzzo's states that the first count of the superseding indictment “fail[s] to state an offense as applied to him.”

The government has not yet responded to those motions and letters of intent, filed Feb. 5.

The federal case includes five total counts — four charges of drug adulteration and misbranding conspiracy and one count of mail and wire fraud — with different groups of defendants attached to each, dependent upon their alleged actions and relationship with each other. Charges were originally filed in March 2020 accusing more than two dozen people in the Thoroughbred and Standardbred industries of doping racehorses with adulterated or misbranded drugs or supplying such materials to horsemen. A superseding indictment was filed in November 2020 and left off a number of the original defendants from the March indictment, including Gregory Skelton, Ross Cohen, Nick Surick, Chris Marino and Henry Argueta, though it's unclear whether that means those defendants have taken deals with prosecutors. Their case files remain open with no plea change as of this writing.

According to a status conference last summer, discovery in this case is not expected to be completed before late fall, as attorneys for the Southern District of New York have provided voluminous evidence collected by a lengthy FBI investigation to defense counsel. That status conference set dates by which various motions and subsequent responses would be due by both sides in the case, and those deadlines stretch on through the spring.

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