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Linda Rice’s License Revoked, Trainer Fined $50,000

New York-based trainer Linda Rice has been fined $50,000 and had her license to participate in Thoroughbred racing revoked for “actions inconsistent with and detrimental to the best interest of racing generally and corrupt and improper acts and practices in relation to racing,” the New York State Gaming Commission revealed on Monday, May 17. The trainer will not be permitted to apply for a new license for a period of three years.

The NYSGC first launched an investigation into Rice's operation in early 2018, on the claim that she traded money for information from the racing office. That information, such as which horses were likely to enter races before the race had closed, could have given her a competitive advantage.

The investigation uncovered evidence that between 2011 and 2015, Rice received faxes and emails from former entry clerks Jose Morales and Matt Salvato, giving her the names and past performance records of horses prior to draw time. Senior racing office management has said the names of trainers and horses in a given race are not to be released until after a race is drawn (with stakes races being the exception).

An eight-day hearing was conducted at the end of 2020, and the hearing officer submitted a final report to the NYSGC on April 13, 2021. The report concluded that Rice's misconduct – which involved receiving and requesting confidential entry information in overnight races – was intentional, serious and extensive. It also concludes that her actions constituted improper and corrupt conduct in relation to racing in violation of NYCRR 4042.1 and were inconsistent with and detrimental to the best interests of horse racing.

The hearing officer recommended the Commission impose a fine of $50,000 and immediately revoke her license to participate in thoroughbred horse racing and restricting her ability to apply for a new license for a period of no less than three years.

The Commission concurred with the penalty recommended but modified the Report to specifically reflect that the hearing officer found multiple violations, which under NY Racing, Pari-Mutuel Wagering and Breeding Law Sec. 116 allows for $25,000 per violation.

The Commission voted 5-0 to fine Linda Rice $50,000 and to revoke her license to participate in Thoroughbred horse racing for a period of no less than three years.

Rice has saddled the winners of 2,107 races from 11,382 starters over a career dating back to 1987, according to Equibase. Her top trainees include millionaires La Verdad and Palace, as well as Grade 1 winners Voodoo Song, City Zip, and Tenski.

Also on Monday, the Commission adopted several new medication rules:

Commissioners voted 5-0 to restrict the administration of race day Lasix to veterinarians “who are not caring for the horses of a trainer or owner who participates at the race meeting,” extending the third-party Lasix rule to the state's Standardbred tracks (it was already in place at Thoroughbred tracks).
A new clenbuterol rule was adopted requiring approval before a horse can be treated with prescribed clenbuterol, daily submission of administration of clenbuterol treatment, that a treated horse to be placed on the Vet's list, and bars a horse from racing until it tests negative for clenbuterol.
ARCI modified the model rule thresholds for three drugs (detomidine, omeprazole and xylazine) based on developing research. ARCI also added to the list of thresholds amounts for another four routine therapeutic medications, three of which are antihistamines (cetirizine, cimetidine and ranitidine) and one of which is a muscle relaxant used in anesthetic protocols (guaifensin). The thresholds are consistent with New York's existing restricted time periods. Trainers who comply with such restricted time periods will be assured of not violating such thresholds.

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Rice Attorney’s Motion To Dismiss Denied, Hearing Moves Into Fifth Day

The New York State Gaming Commission rested its case against top trainer Linda Rice Tuesday after a fourth day of testimony reviewing details about the inside information Rice is alleged to have gotten from the racing office between late 2011 and 2015. At the conclusion of the commission's case, Rice counsel Andrew Turro moved to dismiss the commission's charge against her.

Turro argued that the commission failed to adequately prove Rice sought out the information provided to her by former racing office employees Jose Morales and Matt Salvato, and also that there was no specific NYSGC or New York Racing Association rule prohibiting racing office employees from providing trainers with the names of horses entered in a race prior to draw time.

Morales and Salvato have testified they provided, first through fax and later through email, horse names and past performance sheets of entries in races ahead of draw time — something senior racing office management testified is expressly forbidden. They also testified they were provided financial gifts by Rice, which they believed was in consideration for their providing her the information.

Rice is charged under state regulation language prohibiting “actions inconsistent with and detrimental to the best interest of racing generally ad corrupt and improper acts and practices in relation to racing.” During Tuesday's hearing, which consisted entirely of testimony and layers of cross-examination and redirect examination of NYSGC steward Braulio Baeza, Jr., Turro pointed out that NYRA and NYSGC codes do not specifically spell out what sharing of information is or isn't permissible by the racing office.

Rick Goodell, counsel for NYSGC, pointed out that language prohibiting licensees from failing to act “in the best interests of racing” may be broad, but is standard in many places and its legality has been upheld many times. Goodell also told the hearing officer that Rice herself acknowledged having loaned Morales money more than once and that she was not paid back for those loans. Morales and Salvato had indicated in previous testimony that Rice also sent cash or checks in envelopes to members of the racing office staff.

Clark Petschek, hearing officer for the case, denied Turro's motion to dismiss.

Although Turro has yet to make his opening statement in the case, he also seemed to question how beneficial the information was to Rice, pointing out instances where Rice lost races after getting pre-draw information from Morales. It's also true that since entries were still open at the time Morales and Salvato would send information to Rice, horses could come in or out of the race after she got preliminary entries but before draw time. Rick Goodell, counsel for NYSGC, also pointed out instances where Rice's horses had won or otherwise done well in races where Morales's emails showed he sent her information.

Two more days are allotted for the hearing on Nov. 18 and 19, allowing the defense to present its case. It remains unclear when after the conclusion of the hearings Petschek could issue a decision.

See previous coverage of the hearing here and here

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Rice Hearing Begins With Testimony From Two Former NYRA Employees

The long-awaited hearing by the New York State Gaming Commission into alleged “corrupt and improper acts in relation to racing” by trainer Linda Rice began on Tuesday as counsel for the NYSGC began laying out the case against her. The hearing, which was postponed from March of this year, will determine whether Rice received information from racing office employees in New York from the 2011-12 Aqueduct meet through 2015 to help her place her horses in the most opportune races. Rice is accused of receiving “regular, continual and improper access to the confidential names and other information” of horses entered in races at New York Racing Association tracks, and of paying “substantial sums” of money to racing officials there to induce them to give her that information.

Depending upon the hearing results, a notice from the NYSGC states that her license could be suspended or revoked and she could be fined up to $25,000 for each violation.

Two days have been allocated for the NYSGC to present its case against Rice, with a third day potentially being scheduled for next week. During the following week, Rice's counsel will have up to three days to present their response.

On Tuesday, the hearing officer was presented testimony from three witnesses, two of whom are former employees in the racing office who say they provided Rice the information in question and received money from her.

It seems the allegations against Rice may have surfaced as the result of an unrelated investigation. Martin Panza, senior vide president of racing operations at NYRA, recalled an incident in spring 2014 when an unidentified trainer placed entries for his horses without naming riders on the horses. About five minutes later, the trainer would tell Panza, he got a call from a jockey's agent offering to put his rider on one of the trainer's horses. The timing seemed suspicious to the trainer and to Panza, who launched an investigation. NYRA's information technology department pulled data connecting IP addresses to the 40 or 50 people in the organization who had access to the Jockey Club's InCompass software, which is used to manage entries. Most accounts only were only associated with IP addresses corresponding to NYRA facilities, but Panza recalled one in particular – that of racing office employee and racing official Jose Morales, Jr. — that had “pages” of different IP addresses using it.

Panza testified he then contacted law enforcement, since NYRA didn't have the ability to trace those IP addresses to devices and locations. Police in Queens launched an investigation and several months later, law enforcement, prosecutors, and NYRA investigators spoke with Morales.

Morales testified he had provided his InCompass login information and/or print-offs of race entries to a number of jockey's agents, including Matt Muzikar, Mike Gonzalez (whose license was suspended 10 years by NYSGC), and Bill Castle. Prosecutors were interested in pursuing a criminal case against Morales, and Morales said his attorney at the time convinced him the only way he could avoid jail time was if he turned over additional information. That's when he opened up about his arrangement with Rice.

Morales said he'd known Rice since childhood, as she was friends with his parents. One day after he began working in the racing office, he said Rice called asking for a colleague of Morales who wasn't in, so Rice worked with him to help fill a race.

“I remember the day like it was yesterday,” Morales said. “I guess I was hustling her in the race and I guess she trusted me to see if [her] horse fit, and the horse ran bad and then what happened was, she wasn't really upset … she didn't like it, no one likes it when their horse runs bad … but she called me later to say the horse didn't run any good.

“She said, 'Hey, listen, you can help me, we can help each other, and everything is good.'”

Morales recalled racing office employees being assigned races they needed to “hustle” or push to get filled. Different employees had relationships with different trainers they could call to see if a horse in the barn could be ready for the race. Morales explained that Rice would help him get races filled, and he would fax (or sometimes email) information showing the horses that had been entered in races prior to draw time.

Morales recalled Rice bringing envelopes of cash to him, and to other racing office employees, a few times a year. Morales might get as much as $2,000 in one envelope two or three times a year before he ended his employment in 2014 to pursue a career as a jockey's agent. Morales also borrowed money from Rice several times. According to his testimony, Rice never specifically offered a set amount of money in exchange for certain information, but Morales came to expect he'd get it.

Morales' license application to become a jockey's agent in New York was denied in late 2016. He has reapplied and said the commission has not made a determination on his application. Counsel for Rice questioned whether his testimony this week was designed to sway the commission, and Morales said he had not been offered a deal in exchange for it.

“That was the only reason I even went to the racing office, is I wanted to make contacts and better myself,” Morales said. “Working in the racing office in New York, you can't make a living. It pays $40,000. What are you going to get with $40,000 in New York?”

Although Panza was very clear that racing office employees are instructed not to provide anyone with the identities of horses entered in races prior to their release in the overnights, Morales and former colleague Matt Salvato said they weren't given specific instructions about this, or any other aspect of the information in InCompass.

Salvato admitted to giving Rice information on occasions when Morales had a day off. At first, he said he had no idea he wasn't supposed to release that information. He took one envelope of cash from Rice delivered to him via Morales but when he saw a colleague reject such a payoff, he said he realized there must be something wrong.

Morales said that despite this, he knew what he was doing would be frowned upon – and he knew he needed to keep it a secret.

“My bosses basically told me, 'You've got to be careful,'” said Morales. “They obviously knew something was going on to a point, but it's like they turned a blind eye. They didn't want to know, but they knew.

“I never told anyone directly this was happening. People came to me and I'd deny it. If people knew what was really going on, a lot of the other trainers are going to come and complain.”

Morales said he believed, but has no proof, that other racing office employees were also giving their InCompass logins to people outside the office. Both Morales and Salvato said they did not provide information about horses' identities or past performances to any other trainers prior to draw time.

“Obviously people say you don't feel sorry until you get caught, right?” said Morales, chuckling, when asked about passing information to Rice. “Obviously, looking back, it wasn't the right thing to do. It wasn't fair to the little guy, busting his ass outside in the cold weather. The little guy with two or three horses was trying to win races, too.”

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