Federal Defendants File Motion Asking Judge To Recuse

The defendants in the ongoing federal drug adulteration and misbranding case have filed a letter motion asking the presiding judge in the case to recuse herself. U.S. District Judge Mary Kay Vyskocil will consider the motion during a previously-scheduled status update in the case on May 14.

Attorneys for the defendants say Vyskocil has previously bred Thoroughbred racehorses and on four occasions was the breeder of a horse which ran against starters from defendants Jason Servis or Jorge Navarro. Court documents indicate that in two of those four races, the horse bred by Vyskocil finished better than the defendant's starter. Three of those starts were made by one horse, Here's Ya Souvenir, who was sold at auction as a 2-year-old and apparently no longer belonged to Vyskocil at the time of those starts. The other start came from Last Boat Home, who made the start in question while owned by Dreamland Racing.

Vyskocil bred both horses in partnership with Barry Ostranger, who the defense points out is a member of The Jockey Club. Jockey Club principals have been outspoken about the organization's role in the investigations which led to these indictments, and of their desire for serious punishment for the defendants.

Those races took place, according to court documents, between 2006 and 2009 — well before Vyskocil took the bench in the Southern District of New York.

Prosecutors filed a motion in opposition of the defense's request this week, questioning why it took the defense a year to make these connections between Vyskocil and hinting that this revelation could be related to a number of motions that had not gone in the defendants' favor. The government argues that judges do not have to recuse themselves from cases simply because they have some interest in a relevant industry, but only if those interests directly involve a person or legal issue at play. They also point out that Vyskocil didn't stand to gain financially from any of the four races in question against Navarro and Servis because they either took place outside New York state (where the horses were bred) or involved a horse that was not registered with the New York breeder incentive program anyway.

Vyskocil is expected to address the recusal motion during Friday's conference.

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New Indictment, Court Documents Reveal More About Drug Makers In Federal Case

Two more people have been indicted as part of an ongoing federal case focusing on adulterated and misbranded performance-enhancing drugs in horse racing. On March 11, a new superseding indictment was filed in the United States District Court for the Southern District of New York in the case of former pharmacist Scott Mangini, who has since entered a guilty plea to a charge of conspiring to unlawfully distribute adulterated and misbranded drugs with the intent to defraud and mislead. The new indictment also names Carl Garofalo Sr. and veterinarian Dr. Michael Posner.

This is the third version of an indictment for Mangini, who was originally indicted alongside associate Scott Robinson in March 2020 and then was named in a superseding indictment that dropped Robinson. Robinson pleaded guilty to one count of drug adulteration and misbranding conspiracy in September 2020 and was sentenced in March 2021 to 18 months in prison.

According to the indictment, Mangini collaborated with others, including Robinson and Garofalo, to operate a series of online marketplaces which advertised substances designed to enhance performance or serve as copies of prescription drugs. Court documents filed in Mangini's case before his guilty plea detail the tangle of businesses Mangini and his associates created in an attempt to make it harder for consumers and regulators to work out who was behind their various storefronts.

Mangini apparently kept busy with multiple businesses operating on overlapping timeframes. As reported by the Paulick Report in 2016, Mangini was the pharmacist at Ergogenic Labs in Wellington, Fla., before the facility closed following a particularly negative inspection by state health department regulators. Mangini surrendered his license after that state inspection, which highlighted unsanitary facilities and mislabeled product ingredients. According to prosecutors, some of the products Mangini made at Ergogenic were sold to Robinson, who distributed them to the public via HorsePreRace.

During the same time he was working at Erogenic, Mangini, Robinson, and others were also making illegally-compounded ulcer medication under the banner of Horse Gold. Mangini, HorseGold, and HorsePreRace were all recipients of FDA warning letters in 2014 regarding ulcer products called GastroMax3 and Gastrotec which the agency said were illegally compounded. A series of knock-off omeprazole products on the market at the time had remarkably similar logos of a running horse outline with a starburst behind or near the horse.

One document from prosecutors acknowledged the same group was behind various iterations of the ulcer medication and were trying to walk a line between maintaining branding and escaping the notice of state authorities.

In November 2015, Robinson allegedly wrote to someone: “Don't use that artwork for gastromax 3 that my guy sent u – u get us all ****ed – too close-why wouldn't u use original artwork I'm serious-I don't need board of pharmacy seeing that and linking to me.”

According to a press release from Horse Gold in 2011, its ulcer products were carried in racing tack shops around the country and were also donated to aftercare charities.

After Ergogenic shuttered in 2016, prosecutors say Mangini and Robinson stopped working together and Mangini and Garofalo incorporated Pegasis Investment Group, which served as a shell for RacehorseMeds. Garofalo is accused of helping to manufacture and ship “identical drugs to those Mangini had produced while operating Ergogenic” and of enlisting family members to do the same. Documents reveal that one of the people on the government's witness list helped Mangini and Garofalo create a shell company called Diamond Enterprise Group to obscure the identity of the “true manufacturer and shipper of the drugs sold to consumers.” The person identified only as “Witness-1” was paid $1,000 a month and opened bank accounts and multiple mailboxes outside the state of Florida in the company's name to make it appear as though Diamond Enterprise was based elsewhere.

Indeed, it would seem as though the scheme was successful at making it difficult for consumers to figure out how to report a problem with products purchased from one of the companies. A government motion told the story of an unidentified owner whose trainer advised her horse needed ulcer medication and directed the owner to RaceHorseMeds. The owner purchased omeprazole paste from the website without being prompted for a prescription and began giving the paste to her horse. Eight days later, she “observed a serious deterioration in her horse's health, resulting in the horse's hospitalization at an animal hospital.

“Witness-3 attempted to contact the company operating the Racehorsemeds website to find out what was in the product she ordered, but the only person Witness-3 could link to Racehorsemeds was Witness-1.”

Federal regulations require, among other elements of labeling, that the manufacturer of a drug be clearly identified on the label so consumers can report adverse drug reactions if needed.

Prior to entering his guilty plea, Mangini's attorneys had been trading motions with prosecutors about which pieces of evidence would be admissible at his trial. One point of contention was that Mangini was apparently on the radar for U.S. Customs and Border Patrol. The agency seized two packages that were addressed to people other than Mangini – one in 2020 from Wuhan, China, was bound for “Frank Stef” and one in 2018 from Jalisco, Mexico, was addressed to “Michael O'Donnell.” A defense motion sought to have this evidence excluded, pointing out that Mangini was not the addressee on either package but did not explain exactly how he related to either package. The motion did point out that the accusations against Mangini related to his sale of products in the United States, not to his receipt of drugs from foreign countries.

Garofalo, Mangini and Robinson were all longtime owners on the Standardbred racing scene, but Mangini and Garofalo did make a foray into the Thoroughbred world. In late 2015, trainer Maria Borell claimed two horses for their Pegasis Investment Group. One was claimed away and the other was later transferred to trainer Sal Santoro after Borell left Florida. A third Thoroughbred racing for Pegasis Investment Group the following year was trained by Barry Kirkham.

The indictment accuses Posner of allowing Mangini to use his name and veterinary licensing credentials to create prescriptions for horses which neither Posner nor Mangini (who is not a veterinarian) had examined. The March 2021 indictment points to a check to Posner issued by Ergogenic Labs for $243.50, with “March 2016 commissions” written in the memo line.

Mangini and Posner were charged with one count of drug adulteration and misbranding conspiracy, while Mangini and Garofalo were charged in a separate count of drug adulteration and misbranding conspiracy. Garofalo and Posner have entered not guilty pleas.

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Chocron Enters Guilty Plea In Case That Tied Horsemen’s Accounts To Money Laundering

Audrey Strauss, the United States Attorney for the Southern District of New York, announced that Jose Morley Chocron pled guilty today before U.S. District Judge Jed S. Rakoff to one count of money laundering. Chocron laundered more than $500,000 in funds that had been represented to him to be the proceeds of a scheme to bribe Brazilian political officials, using a network and bank accounts to which he had access by virtue of his operation of an unlicensed money transmitting business.

U.S. Attorney Audrey Strauss said:  “Jose Chocron's black-market banking was designed to facilitate tax evasion, and was used to facilitate what he thought was the bribery of a foreign official. Unbeknownst to Chocron, the FBI had identified his network and worked quickly to dismantle it. This Office will continue to ensure the integrity of the U.S. financial system by identifying and prosecuting shadow banking operations like Chocron's.”

According to the Complaint, the Indictment, and other filings in this case:

Between May 2019 and October 2019, Chocron, working with his co-conspirators, utilized his network of contacts and bank accounts to launder funds that had been provided to him by individuals who – unbeknownst to Chocron – were working for the Federal Bureau of Investigation (“FBI”). Those individuals informed Chocron that the funds were the proceeds of bribes that had been paid to Brazilian public officials in order to obtain licenses and permits. On four occasions, Chocron accepted cash from individuals who were working for the FBI or arranged to have the cash delivered to his associates. He then arranged for the funds to be transferred to bank accounts specified by the FBI, minus a commission payment.

Chocron explained that he was able to receive large amounts of cash in the United States and arrange for those funds to be transferred to bank accounts because Chocron “ha[d] . . . people here that need cash.  They will transfer to you, because they don't want to pay taxes . . .  What do I do? I give them the money and they make a transfer to me.”  He also requested a higher commission for his services than initially offered, stating “Let's be clear, that's laundering money.”

Chocron, 61, of Spain and Venezuela, pled guilty to one count of money laundering, which carries a maximum sentence of 20 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. In connection with his guilty plea, Chocron also admitted that he operated an unlicensed money transmitting business, in violation of Title 18, United States Code, Section 1960.

Chocron is scheduled to be sentenced by Judge Rakoff on July 16, 2021, at 4:00 p.m.

Ms. Strauss praised the outstanding work of FBI New York's Eurasian Organized Crime Task Force.

The prosecution of this case is being overseen by the Office's Money Laundering and Transitional Criminal Enterprises Unit.  Assistant U.S. Attorneys Andrew C. Adams, Benet J. Kearney, and Sarah Mortazavi are in charge of the case.

Editor's note: The preceding press release was distributed by the United States Attorney for the Southern District of New York. Chocron was named a March 2020 indictment alongside Florida trainer Alfredo Lichoa and several others. A superseding indictment named only Lichoa, Chocron, and Schachtel. Read about that case here. Lichoa has since entered a guilty plea to a charge of money laundering conspiracy.

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Judge Approves Motion Filed By Jason Servis’ Attorney To Extend Timeline In Federal Doping Case

The judge presiding over the federal case against 14 alleged horse dopers approved a motion to extend the timeline by one month this Friday, reports the Thoroughbred Daily News, pushing the start of the trial back until after Labor Day. Filed by the attorney for Jason Servis, Rita Glavin, and supported by attorneys for the other 13 defendants, the motion was filed to give the defense more time to sift through the large amount of evidence in the case.

“Given the volume of discovery that we are still reviewing, I respectfully request that the Phase Two Motions schedule be modified as follows: defense motions due June 28, government response due July 28, and defense replies due on Aug. 11,” Glavin wrote.

Currently, the court case is the first round of hearing “dispositive motions” filed by the defense in an effort to have some of the charges dropped. The second round of motions, which is what was extended Friday, deal with requests to suppress evidence and/or expert testimony. A status hearing is scheduled for May 14.

On Mar. 9, one year to date from the first arrests in the case, Scott Robinson was sentenced to 18 months in prison. U.S. District Judge J. Paul Oetken handed down the sentence on Tuesday after Robinson pleaded guilty to one count of drug adulteration and misbranding conspiracy in September 2020.

Read more at the Thoroughbred Daily News.

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