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Vet Who Allegedly Bragged About Selling PEDs to Change Plea

Kristian Rhein, a veterinarian formerly based at Belmont Park whom federal prosecutors allegedly have on tape bragging that he sold “assloads” of the illegal performance-enhancing drug SGF-1000, has been granted an Aug. 3 change-of-plea hearing at which he is expected to alter his initial “not guilty” plea in the highly publicized racehorse doping scandal.

Rhein was allegedly part of a “widespread, corrupt scheme” dating to at least 2017 that allegedly involved the now-barred trainers Jorge Navarro and Jason Servis, plus a vast network of co-conspirators who allegedly manufactured, mislabeled, rebranded, distributed and administered performance- enhancing drugs to racehorses all across America and in international races.

Rhein's desire to change his plea comes just days after co-defendant Michael Kegley Jr. entered a guilty plea to one count of drug adulteration and misbranding July 23 in United States District Court (Southern District of New York) as part of a plea bargain agreement. Kegley will be sentenced Nov. 22.

Kegley told a federal judge last Friday that, “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.”

According to the initial March 2020 indictment, Rhein was one of those veterinarians to whom Kegley routinely sold SGF-1000.

SGF-1000, according to the indictment, was allegedly a drug of choice administered to racehorses trained by Servis, including to the disqualified 2019 GI Kentucky Derby winner Maximum Security.

According to the indictment, on June 5, 2019, Maximum Security was subjected to out-of-competition drug testing. This was allegedly a short time after the colt had received a shot of SGF-1000. Servis called Rhein out of concerns the colt might test positive.

“They don't even have a test for it in America,” Rhein allegedly told Servis during a wiretapped conversation, adding that the presence of SGF-1000 could, however, return a false positive for “Dex.”

The indictment stated that later that same day, Servis received a promise from another veterinarian who agreed to falsify records to make it appear that Maximum Security was treated with “Dex” and not the illegal SGF-1000.

On July 16, 2019, on another recorded phone call, Rhein and Kegley allegedly discussed how Servis and his associates are “buying literally as much” SGF-1000 as Rhein was able to source from Kegley's firm.

The indictment stated that “Rhein bragged that he was selling 'assloads' of SGF-1000.”

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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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Drug Distributor Kegley Pleads Guilty, Faces up to 36 Months in Jail

Among the individuals originally indicted in the doping scandal involving top trainers Jason Servis and Jorge Navarro, Michael Kegley Jr. entered a guilty plea Friday morning during a teleconference before federal judge Mary Kay Vysockil. Kegley pled guilty to one count of drug adulteration and misbranding.

Kegley had originally pled not guilty to the charges.

Kegley will not be sentenced until a Nov. 22 hearing, but it was revealed during Friday's proceedings that he has entered into a plea agreement with government lawyers in which he has agreed to a sentence ranging from 30 to 36 months. Vysockil noted that there is no parole involved when someone is sentenced on federal charges and that most guilty parties serve at least 85% of their sentence.

Kegley, a 41-year-old Lexington, KY resident, was the director of sales for a company based in Nicholasville, KY called MediVet Equine Associates LLC, and admitted in court that the firm produced and sold drugs that were not permissible to be used on racehorses. The primary drug sold by Kegley was SGF-1000. In phone calls intercepted by the FBI, Servis admits to using SGF-1000 and, at one point, says, “I've been using it on everything almost.”

Vysockil, a United States District Judge of the United States District Court for the Southern District of New York, confronted Kegley, saying, “At this time I would like you to tell me what you did that makes you guilty of the offense charged…Specifically, what you did, when you did it, with whom you did it, where you did it.”

Kegley responded: “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.”

Vysockil continued to press Kegley, asking a series of follow-up questions. She asked Kegley if he knew that the trainers buying the products intended to use them on Thoroughbred racehorses and whether or not he knew the products were to be used in such a way that regulators could not detect the products through drug tests. Kegley answered “yes” to both questions.

Shortly after Friday's hearing, Manhattan U.S. Attorney Audrey Strauss issued a statement, which read: “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.”

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Drug Distributor Izhaki Avoids Prison Time

Sarah Izhaki, one of 27 individuals indicted in March 2020 for their role in a horse doping scheme, was sentenced Monday to time served plus three years of supervised release. U.S. District Judge Mary Kay Vyskocil could have sentenced Izhaki to a prison term of 12 to 18 months, but opted for the more lenient punishment due to extenuating circumstances that include Izhaki's poor health and what Vyskocil called a “troubled upbringing.” Two months after the indictments were announced, Izhaki attempted suicide.

During the first 12 months of her sentence, Izhaki will be confined to her home and subject to electronic monitoring.

Scott Robinson, who, like Izhaki, pled guilty to conspiring to unlawfully distribute adulterated and misbranded drugs for the purpose of doping racehorses, received a sentence of 18 months in federal prison in March.

“I want you to know how sorry and remorseful I am for the bad decisions I made,” Izhaki said through an interpreter. Vyskocil noted that Izhaki spoke fluent English, so it was not clear why she chose to use an interpreter.

“I am very sorry for the bad decisions I made against the poor animals,” she continued. “If I could do it again, I would have made different decisions. I know that my being remorseful and being sorry is not enough. The only thing I can do now is to make the right decisions moving forward.”

In the initial indictments released last year, the government charged that Izhaki , along with her daughter, Ashley Lebowitz, was selling misbranded versions of Epogen, a drug that is used to boost a horse's red blood cell count in order to improve endurance during a race. They had allegedly obtained the drug from a Mexico-based drug manufacturing company. Lebowitz has yet to enter a plea.

While acknowledging that Izhaki had committed a serious offense, Vyskocil repeatedly referred to Izhaki's mental and physical problems.

“In light of all of these conditions the court has serious reservations about Ms. Izhaki's ability, frankly, to cope with imprisonment,” Vyskocil said.

According to the pre-sentence report submitted by her lawyers, Izhaki, who grew up in a strict orthodox Jewish household, has dealt with a number of physical and psychological problems throughout much of her life. She was born in 1974 in Mexico and was forced to enter into a pre-arranged marriage when she was 14 and she bore a child when she was 16. Izhaki has problems with her eyesight and became legally blind at the age of 14 and has had eight cornea transplant surgeries. During a 19-month period beginning May 23, 2019, she was involved in two major car accidents, which have required additional surgeries.

Vyskocil made it clear that anyone yet to be sentenced in the case should not look at Izhaki's sentence as a benchmark.

“I recognize that there are more cases pending and people may well be looking at what the court does today, paying attention to this case and viewing it as a benchmark, a bellwether for other horse doping cases and for the abuses in the industry in general,” she said. “I want to say on the record, if you are doing that, you are making a mistake. And I say that because in the court's view the circumstances in this case are somewhat unique, a one off, and unlike some of the other cases that are pending. The sentencing guidelines do not adequately account for certain factors that are unique to Ms. Izhaki and her circumstances, including her mental and emotional condition, her serious physical health condition, her difficult upbringing, her prompt, and I will say, complete acceptance of responsibility and remorse for her conduct.”

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