He was fined R475 million (£19,937,078/€23,234,382/$25,229,382) for accounting fraud–due on or before Apr. 19–by South Africa's Financial Sector Conduct Authority (FSCA) on Wednesday, Reuters reported. The regulator found that Jooste had published “false or misleading financial statements” following an investigation into the matter. Jooste was also ordered to pay R10 million to reimburse the FSCA for their expenses incurred during their investigation into Steinhoff.

Originally, Jooste resigned from his Steinoff role in December of 2017, following an investigation by the retail holding company into accounting irregularities. The company lost the majority of its value following his departure. However, in 2023 Steinhoff did start a debt restructuring plan to avoid bankruptcy, among other initiatives.

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Allowing ACH payments will expedite payment time, reduce paperwork, the likelihood of fraud and improve the overall customer service experience of horsemen.

Anyone looking to sign up can pick up and complete ACH forms located within the bookkeeper's office during normal operating hours.

The post Gulfstream Park Bookkeeper to Begin Accepting ACH Enrollment appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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This latest court action in the twisted saga of the owner and breeder of Triple Crown champ American Pharoah alleges that Zayat and his wife, Joanne, secured a $400,000 mortgage on two back lots adjacent to their New Jersey home in 2018, then had the money wired to the bank account of Zayat's fiscally troubled racing stable in an alleged attempt to execute a “fraudulent transfer” that resulted in “unjust enrichment.”

According to a Sept. 24 filing by trustee Donald Biase in United States Bankruptcy Court (District of New Jersey), “The Defendant received payments on the Leicht Mortgage where collateral was against the Debtor's Properties as opposed to the party in receipt of the funds, Zayat Stables, LLC…. The Defendant's Leicht Mortgage placed a first lien on the assets of the Debtor's Properties and the equity in the Properties, thereby reducing the equity available to the Debtor's individual legitimate creditors.”

Many of those creditors to whom Zayat owes $19 million are Zayat's former Thoroughbred trainers, plus numerous breeding, boarding, horse transportation and veterinary entities.

When he first filed for Chapter 7 bankruptcy protection in September 2020, Zayat said he owned only $300 in cash and $14.22 in two checking accounts.

Yet he and his wife own and live in a 7,714-square-foot home in Teaneck, New Jersey, that is currently assessed at $2.6 million.

And the trustee assigned by the court to find out if Zayat is being truthful about his alleged state of impoverishment has repeatedly told the judge in the case that Zayat and his family members are refusing to cooperate in the trustee's attempt to trace millions of dollars in possibly fraudulent transfers.

In July, Blaise wrote in a court filing aimed at uncovering hidden assets that “Documents obtained by the trustee from third parties strongly suggest that the Debtor still possesses significant assets in Egypt.”

Zayat has repeatedly denied that he has engaged in any illegal activity or that he is hiding money. He has also insisted that neither he nor his family members are trying to hinder the trustee's work.

Beyond not having his bankruptcy protection granted by the court if he isn't being truthful, Zayat faces a possible federal investigation if the U.S. Department of Justice believes a crime has been committed.

The latest legal filing by the trustee lays out the new allegations like this:

“On July 2, 2018, the Debtor and his non-debtor spouse, Joanne Zayat, executed a Mortgage, Assignment of Leases And Rents, Security Agreement, Financing Statement, and Fixture Filing in favor of the Defendant in the amount of $400,000…

“The Leicht Mortgage was secured by two parcels of real property co-owned by the Debtor and Joanne Zayat…. The Properties comprise the back lots of the Debtor's and Spouse's primary residence…

“Documents obtained by the [trustee] indicate that the funds from the Leicht Mortgage, upon closing of the Leicht Mortgage, were deposited via wire transfer into the bank account of [Zayat] Stables. Neither the Debtor nor Joanne Zayat received funds from the Leicht Mortgage despite the Leicht Mortgage being secured by the Debtor's co-owned Properties.

“The Debtor and Joanne Zayat granted a lien on the co-owned Properties without reasonable compensation to same, granting a first position lien to the Defendant reducing the equity in the Properties to the detriment of his other creditors…. The Debtor received no value or less than reasonably equivalent value in exchange for the Leicht Mortgage.”

The filing summed up: “In consideration of the above allegations and counts, the [trustee] demands entry of judgment against the Defendant 1) Cancelling the obligation of the Leicht Mortgage as against the Debtor's Properties on the basis of Fraudulent Transfer; 2) Cancelling the obligation of the Leicht Mortgage based on the Defendant's unjust enrichment.”

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Now, one week later, MGG Investment Group, LP, the lender who is separately suing Zayat and his family members for allegedly obtaining a $24 million loan by fraud and then not repaying it, told the same court that the trustee's probe must be allowed to go forward because Zayat's attempt to put an end to the discovery process “does nothing more than establish that Ahmed Zayat is a perpetual liar determined to hinder and obstruct the Trustee, the Court and creditors at every turn.”

MGG's Mar. 23 filing in United States Bankruptcy Court (District of New Jersey) is rooted in the New York-based lending company's desire not to have Zayat's debts declared legally forgiven under the Chapter 7 bankruptcy protection he is seeking.

MGG has previously asserted in court that loans it made in 2016 to Zayat's racing and bloodstock business were the product of years of systematic fraud that Zayat allegedly orchestrated, including Zayat Stables' desperate selling-off of equine assets that had been pledged to MGG as collateral.

“There is only one reason the statutory meeting of creditors commenced in this
Case…has been kept open and must remain open—namely, notwithstanding Ahmed Zayat's unsupported assertions of cooperation, he has done everything in his power to frustrate the process,” MGG wrote in its objection to Zayat's recent cross-motion to move the case toward conclusion.

MGG's filing continues: “Far from being the 'honest but unfortunate debtor' that the Chapter 7 process aims to protect, Ahmed Zayat has demonstrated time and again that his ultimate goal is to manipulate the bankruptcy process to shield himself at the expenses of the Trustee and creditors.”

According to MGG, since Zayat filed for bankruptcy protection back in September, he has delayed the administration of his case by 1) Refusing to produce documents prior to the initial hearing; 2) Refusing to respond to “numerous questions” on the basis that he did not have the necessary documents in front of him; 3) Promising, then subsequently refusing, to produce requested materials; 4) Providing paperwork that was so heavily redacted that the documents made no sense.

“Ahmed Zayat should not be able to impede the Trustee's analysis or derail his investigation, all of which is being conducted for the ultimate benefit of the Debtor's creditors,” MGG wrote.

The primary role of a trustee in bankruptcy cases is to ensure that a debtor who files for federal bankruptcy protection is not hiding assets that could instead be used to pay creditors. An objection can be filed to the proceedings if a trustee believes aspects of the filing are not on the up-and-up. A judge can either dismiss a case on his own or by acting on a trustee's objection. A judge can also deny the discharge of a particular debt.

And if alleged fraud is uncovered in a bankruptcy filing, the Federal Bureau of Investigation can investigate, and the U.S. Department of Justice can prosecute if it believes a crime has been committed.

MGG wrote that in addition to supporting the trustee in his request for one more month to sift through documentation, the lender also wanted to “advise the Court of significant recent developments” that arose out of Zayat's testimony under oath at a Feb. 25 hearing.

Specifically, MGG alleged, documents pertaining to bank accounts in the names of Zayat's wife (Joanne Zayat) and son (Justin Zayat) are now “indisputably relevant to the Trustee's investigation and analysis, as they appear to have been used as conduits through which Sherif El Zayat, the Debtor's brother, loaned money to Ahmed Zayat.”

Last week, Ahmed Zayat's cross-motion included a letter from his attorney, Jay Lubetkin, who wrote that the trustee's request for the banking documents of family members didn't “have any apparent relevance to the Trustee's decision whether to file an objection to discharge complaint.”

Lubetkin also wrote Mar. 16 that “The Debtor has been extremely cooperative with the Trustee [and has] provided to the Trustee significant documentation respecting his financial affairs…. The Debtor has responded with voluminous documents in satisfaction of the Trustee's three very extensive document requests, and temporarily withheld only a small portion of those documents for legitimate, good faith, objectively supportable reasons…The Debtor [eventually] provided the Trustee with the temporarily withheld documents, and the Trustee has been in possession of all the requested documents for more than 60 days.”

MGG wrote in its Mar. 23 filing that “Ahmed Zayat has attempted to create a record based on false and misleading assertions.”

MGG's filing contained excerpts from email exchanges between Ahmed Zayat and MGG that date to Jan. 12, 2020, which was 10 days before MGG filed its bombshell lawsuit against him in a Kentucky court.

“It kills me and tore me part, not being transparent with you,” Zayat allegedly wrote at the time, apparently in an effort to stave off the impending legal action.

“I did not disclose to you why we had to sell some assets in order for us to fund and continue to operate Zayat Stables and allowing myself the time to find the capital to get you paid in full…. I did not want you to panic knowing that I still have a chance to save the day…

“There is still a glimpse of light that a miracle can happen,” Zayat allegedly wrote.

The post MGG to Bankruptcy Judge: ‘Zayat Is a Perpetual Liar Determined to Hinder and Obstruct’ appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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Most notably, Zayat claimed he had been tantalizingly close–just days away–from securing a $100 million “equity infusion” from an undisclosed entity in China that would have kept New York-based MGG Investment Group, LP, from suing him and other Zayat family members after their cash-strapped racing stable failed to repay loans and allegedly hid and falsified assets.

Zayat then stated that the “extremely aggressive and highly expensive” nature of defending himself from that lawsuit is what forced him to seek Chapter 7 bankruptcy protection last September.

Within that Mar. 16 document that is intended to speed up Zayat's personal bankruptcy case (now past the six-month mark in a federal court in his home state of New Jersey), the breeder who raced 2015 Triple Crown champ American Pharoah detailed a new timeline that suggests even as his financial world was imploding in January 2020, Zayat traveled the globe in a desperate effort to obtain fresh funding to get out from under MGG's $35 million loan.

But that hastily arranged deal never came through in time to prevent MGG from filing the suit that forced his Thoroughbred stable into court-mandated liquidation, according to the version of events Zayat attested to in his cross-motion.

“When MGG filed its Kentucky suit, I was pursuing for [Zayat] Stables a $100 million equity infusion from the Asian markets,” Zayat stated in the filing. “I attended a roadshow in China from Jan. 5, 2020, through Jan. 10, 2020, to pursue that capital infusion. MGG filed suit Jan. 17, 2020. Had MGG not filed its lawsuit in January 2020, the likelihood is that capital raise would have been consummated, resulting in MGG being paid in full.

“MGG encouraged me to pursue that capital infusion while it was secretly preparing the Kentucky suit and intending to exhaust {Zayat] Stables' bank account,” Zayat alleged.

In a different section of the same document, Zayat claimed that MGG “fraudulently induced Stables into a loan which involved a $10 million discretionary portion, never lent the full $35 million to Stables which was required, and admitted it never intended to lend to Stables the full $35 million.”

Zayat stated the money he sought in 2016 from MGG was intended to be a “bridge loan” because Zayat believed he had a bigger deal in the works with CVC Capital Partners, which describes itself as “a world leader in private equity and credit” that seeks to partner with “fundamentally sound, well-managed and cash-generative” businesses.

“At the time of the negotiations with MGG, [Zayat] Stables had a term sheet from CVC, one of the world's largest private equity firms, to inject $250 million equity into Stables for a 49% ownership interest,” Zayat stated in the court document. “Thus, the intent was for Stables to use MGG's $35 million as a bridge loan until an equity infusion transaction could be consummated.”

But that deal also fell through.

The proposed partnership between Zayat and CVC would have unraveled in either late 2016 or early 2017. Based on a different timeline of events laid out by MGG in its lawsuit, that's roughly the same time frame when Zayat and family members allegedly began selling horses and shares in breeding rights while telling the MGG those equine assets remained on the books as security against the loans.

While Zayat's two big-money, near-miss investment disclosures will generate headlines within the Thoroughbred industry, it isn't clear what purpose they serve in relation to the paperwork his legal team filed on Tuesday. The Mar. 16 filing is essentially is a request to get the trustee and creditors to stop grilling him about financial details so the bankruptcy proceedings can be brought to a conclusion.

“The Debtor has been extremely cooperative with the Trustee,” Zayat's attorney, Jay Lubetkin, wrote in an explanatory letter that accompanied the cross-motion. “The Debtor provided to the Trustee significant documentation respecting his financial affairs…. The Debtor has responded with voluminous documents in satisfaction of the Trustee's three very extensive document requests, and temporarily withheld only a small portion of those documents for legitimate, good faith, objectively supportable reasons…

“The Debtor [eventually] provided the Trustee with the temporarily withheld documents, and the Trustee has been in possession of all the requested documents for more than 60 days. The Trustee has personally inspected the Debtor's house with a real estate broker and [an] appraiser for more than two hours, more than three months ago.”

Lubetkin wrote that Zayat and family members are now being asked to turn over another round of detailed financial documents, “none of which have any apparent relevance to the Trustee's decision whether to file an objection to discharge complaint.”

Lubetkin summed up by writing that “In a further display of good faith, the Debtor was willing to consent to a short extension of the Trustee's deadline to file an objection to discharge complaint, if the Trustee agreed to limit the further continued meeting of creditors to one additional hour. Even that reasonable proposal was rejected by the Trustee. For the foregoing reasons, and for those set forth in the supporting Certification, the Debtor respectfully requests that the Court should enter an Order denying the Trustee's further request for an extension of the discharge objection deadline and compelling the Trustee to deem the meeting of creditors concluded.”

According to the cross-motion, among the additional items that the trustee has recently requested are a list of transactions from Zayat's TVG betting account and his credit card statements from 2016.

“Calendar year 2016 was the period immediately after the success of the Triple Crown winning horse American Pharoah, and there is no showing, and can be no showing,

that I was under any personal financial distress during that period of time,” Zayat stated.

The post Even As Fraud Suit Was Imminent, Zayat Now Claims Global Firms Wanted to Invest Hundreds of Millions appeared first on TDN | Thoroughbred Daily News | Horse Racing News, Results and Video | Thoroughbred Breeding and Auctions.

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“Threats of fraud are real, whether the fraud is real or not, just like this last presidential election,” McIngvale told TRC. “Half the population doesn't believe in the results. So, horse racing can't be in that same boat. Cannot go there. It's no fun when you've got no shot from the get-go.”

McIngvale pointed to the newly-signed federal Horseracing Integrity and Safety Act as a step in the right direction.

“[HISA], it's very good, just has to be enforced,” he said. “People need to run these horses on hay, oats and water, just like we ran Runhappy. It makes the horses happier. It makes the betting more transparent. And the fans don't think they're an outsider looking in.”

Read more at the Thoroughbred Racing Commentary.

The post Mattress Mack: ‘Threats Of Fraud Are Real, Whether The Fraud Is Real Or Not’ appeared first on Horse Racing News | Paulick Report.

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