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Servis Negotiating with Feds for Plea Bargain

The barred trainer Jason Servis, the final–and most notoriously prominent–defendant awaiting a trial or sentencing in the 2020 racehorse doping conspiracy scandal, is negotiating with federal prosecutors for a plea bargain agreement to adjudicate the three felony drug misbranding and fraud conspiracy charges he is facing for allegedly drugging almost all the Thoroughbreds under his care in 2019.

The disclosure was revealed late Friday afternoon in an otherwise routine court filing asking for an extension of time to file motions in Servis's upcoming trial, which has a Jan. 9 start date.

“The Government and counsel for defendant Jason Servis are currently in discussions regarding a potential pre-trial disposition, which may obviate the need for trial,” wrote United States Attorney Damian Williams in his letter to the court.

The request for extra time was granted by Judge Mary Kay Vyskocil of United States District Court (Southern District of New York).

The Dec. 2 filing also referenced a change-of-plea hearing that same judge had granted the day before to the New York-based veterinarian Alexander Chan, who is accused of his own trio of felony charges related to injecting purported performance-enhancing drugs (PEDs) into Servis's horses and then hiding the charges from billing and veterinary records.

Chan, as part of his plea change, could very well implicate his former client, Servis, during his Dec. 5 hearing.

That's what another veterinarian who worked for Servis, Kristian Rhein, did in August 2021 when he changed his own plea to guilty on one felony count within the federal government's sprawling prosecution of an allegedly years-long conspiracy to dope racehorses. Rhein got the maximum sentence of three years imprisonment for his crimes.

Chan and Servis were scheduled to be tried together next month.

“In light of the foregoing, the parties respectfully contend that a brief adjournment of the upcoming deadline [to file motions] will facilitate the parties' ongoing efforts to reach a resolution short of trial,” Williams wrote to the judge.

The feds have already disclosed they have a trove of wiretapped evidence involving Servis speaking about his doping regimens to Rhein, Chan, and the now-imprisoned trainer Jorge Navarro, who in December 2021 was sentenced to five years behind bars for his rampant criminal usage of equine PEDs.

Some of those secretly recorded phone conversations involved the MGISW Maximum Security, who crossed the wire first in the GI Kentucky Derby, but was DQ'd for in-race interference.

One of the elixirs of choice for both Servis and Navarro was SGF-1000, a custom-made, purported PED intended to promote tissue repair and increase a racehorse's stamina and endurance beyond its natural capability. The two trainers discussed this PED in an intercepted call on March 5, 2019. The transcript reads as such:

Servis: I'll tell you what, Jorge. I'm using that [expletive] shot. What is it, SGF?

Navarro: Oh yeah, yeah, yeah. I got, uh, I got more than 12 horses on that so I'll let you know, okay?

Servis: I've been using it on everything, almost.

Navarro: Jay, we'll sit down and talk about this [expletive]. I don't want to talk about this [expletive] on the phone, okay?

Servis: All right. You're right.

On June 5, 2019, a call between Servis and Rhein went like this, according to the feds:

Servis: Are you by yourself?

Rhein: Yeah, yeah, yeah. I just walked out of the barn.

Servis: Hey. So they've been doing some out-of-competition testing, which I have no problem with. Um, they took Maximum Security Monday and they came back again today. But Monday he got the KS. I just want to make sure we are all good with that.

Rhein: Wait, what did he get?

Servis: I'm sorry, I said “KS.” The, you know, your shot. The…

Rhein: Oh, the SG.

Servis: Yeah, that stuff.

Rhein: Yeah-no, no, no. The Jockey Club tested it, and I met the guy who tested it way back when. It comes back as collagen. They don't even have a test for it.

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The Week in Review: Just What is Jason Servis Thinking

A Jan. 23 trial date for the Jason Servis case was announced last week, which means in about eight months there will be some closure and Servis will learn his fate. The way he has handled things, it seems that he is at least somewhat optimistic that he will be found not guilty. If so, he is deluding himself. Everything about this case says that he has virtually no chance of being acquitted.

Which raises a question: why is he fighting this when it makes far more sense to go to the government and cut a deal that will result in less prison time?

Has Servis not been paying attention? So far, the government is undefeated, unscored upon and running up the score. They have gotten a number of people to plead guilty, including Jorge Navarro, who is rotting away in prison. Seth Fishman and Lisa Giannelli fought and took their cases to court and in both cases the jury didn't have time to order lunch before convicting them. Judge Mary Kay Vyskocil, who is one tough cookie, has never shown so much as an ounce of sympathy for the dopers, alleged and otherwise.

Not that any of this should come as a surprise. Going to federal court and winning a criminal case brought by the federal government is nearly impossible. According to a survey by the Pew Research Center, 90% of those indicted in federal cases in 2018 pled guilty. Eight percent of all cases were dismissed and 2% went to trial. The end result is that in 2018, only 320 of 79,704 total federal defendants went to trial and won their cases, at least in the form of an acquittal.

The government's m.o. is to build cases against defendants that are so solid that a conviction is all but assured. That's the case with Servis. They say they have numerous wiretapped phone conversations in which he talks about drugging his horses. In one, he was allegedly caught saying that he gave the drug SGF-1000 to virtually all of the horses under his care. In court, when pleading guilty, veterinarian Kristian Rhein implicated Servis, testifying that he sold him illegal, performance-enhancing drugs. The prosecution has done an excellent job.

What, then, could possibly be Servis's defense? I can't even begin to think of one. I'm not a lawyer, but isn't this the very definition of being caught red-handed?

Then there's the matter of legal fees. Servis has hired a big-time lawyer in Rita Galvin, who represented former New York Governor Andrew Cuomo in his battle over sexual harassment charges. The meter has been running for a long time and there's no doubt that Lawyer Galvin gets a hefty fee for her services.

The longest sentence handed out so far has been the five years given to Navarro. But for Servis, it could be far worse. In a superceding indictment issued in November, 2020, the charges of mail and wire fraud conspiracy were added to the original charges of drug adulteration and misbranding. The maximum sentence for drug adulteration and misbranding is five years. The maximum sentence for wire and mail fraud is 20 years. Now facing a possible sentence of 25 years, the 65-year-old Servis may well spend the rest of his life in prison.

If he takes the case to trial, the government has no incentive to go easy on him. If he loses, he is going to go to prison for a long time. The 25 years, or something close to it, is a possibility. That's why he needs to cut a deal. Why not ask that the mail and wire fraud charges be dropped and agree to plead guilty to the drug adulteration and misbranding charges?

Yes, Servis is innocent until proven guilty. Yes, he is entitled to his day in court. But he's heading down a path that is no doubt going to dead-end in his being convicted. Does he not realize this? Did he, after so many years of allegedly doping horses and not getting caught, come to think he is a bulletproof? This is not going to end well for him.

Short Fields in Stakes Races

Six graded stakes races were conducted Saturday and four of them had five-horse fields. The other two were the GIII Peter Pan S., which featured eight runners, and the GIII Beaugay S., which had a field of seven. The average field size for the six races was 5.83.

The most glaring example was the GI Man o'War S. It had all the elements that normally attract decent sized fields. It's a Grade I, the purse is $700,000 and it's a grass race. Still, after a scratch, only five runners went to the post.

This is an on-going problem and it's getting worse all of the time. You're even seeing a race like the GI Apple Blossom H., worth $1 million, attract only five horses.

The foal crop keeps falling and the top horses have never raced more infrequently. But there's been no adjustment when it comes to stakes racing. We're left with a situation where there are too many stakes races and not enough horses to fill them. It might be a tough ask to ask tracks to eliminate a meaningful number of their stakes races, but that's exactly what needs to happen.

Alabama-Bred Siblings Duke It Out

You probably haven't been paying much attention to the Alabama breeding program, which has been hanging on by a thread since the Birmingham Turf Club closed years ago. But there still is such a thing as an Alabama-bred and with no racing in the state they occasionally show in special races carded just for them in Louisiana. That was the case Saturday night at Evangeline Downs, which produced a racing oddity. Three of the five starters in the $25,000 race were full-siblings. Two Mikes N Doc G, Liken It and Kellys the Boss are all by Doc N Bubba G out of the mare Ausbrook and were bred by Kent and Lisa Gremmels. They finished behind Foolish Steve (Mosquiot). Among the brothers and sisters, Two Mikes N Doc G fared best, finishing third.

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Do 2021 Handle Figures Tell the Whole Story?

The Week in Review, by Bill Finley

The announcement from Equibase that handle on U.S. racing in 2021 set a nine-year high with over $12 billion bet was understandably well received. During a year where an awful lot went wrong for the sport, at least the wagering numbers were healthy.

But, and sorry to rain on the parade, we need more information before we can celebrate.

How much was bet is only part of the story. We need to know where the bets were made and by whom. If the increase was the result of such things as added TV exposure for the NYRA races on Fox Sports or sports bettors gravitating to racing or an overall increase in the sport's popularity, then this is a very positive story. But if the added handle was the result of high-volume players who use computer programs to make their bets increasing their level of wagering in 2021, then the picture is an entirely different one. We just don't know.

“It's better that the numbers go up rather than down, but what is the context on this realistically?” said Pat Cummings, the executive director of the Thoroughbred Idea Foundation, who estimates that computer-assisted wagering (CAW) players account for 35% of the total handle in the U.S. “These numbers get put out there in this broad context and that's all it is. So anyone that wants to take a victory lap on them can take a victory lap on them. But they are totally lacking an understanding of the greater detail of the business. It would be like saying you lost 20 pounds during the year, but ignoring the fact that your cholesterol went up 100 points. It's impossible to quantify how good or, potentially, how bad this is.”

This is pari-mutuel wagering, where the successful bettors feast off of the unsuccessful ones. It's their money that they are winning, not the house's money. With the CAW phenomenon, betting on the horses has turned into a matter of the whales vs. minnows or the CAW bettors vs. everyone else. The whales have been gobbling up the minnows, and after a while all the minnows will be gone. This is a serious threat to the long-term viability of the sport. If the CAW players bet more than ever in 2021, well, that's a big problem.

In a perfect world, there would be transparency and we would know exactly where the handle is coming from. How much was bet on-track or at brick-and-mortar OTBs or simulcasting outlets, with ADWs like NYRA Bets and TwinSpires, and how much was bet by the CAW players?

We're never going to find out. Based on the estimate that 35% of all bets made in the U.S. were made by CAW players, that means the computer players wager at least $4 billion a year. With a few exceptions, tracks and other wagering outlets will never turn away their business and neither will they divulge any pertinent information. That's understandable. The CAW customers want to maintain their privacy and the tracks and betting outlets don't want competitors to know their business.

Perhaps the gains made in betting in 2021 had nothing to do with CAW players. We just don't know. It would be nice if we did.

Field Size Shrinks Again

The Equibase year-end release of racing's economic indicators also included the nugget that average field size in 2021 was 7.3 starters per race. That was a 7.2% decline from 2020 and a 2.08% drop from 2019. While those drops alone aren't alarming, it was the smallest average field size since the Jockey Club started keeping records in 1950. As recently as 2011, the average field size was 8.04. This isn't good and there is nothing to suggest it will get better any time soon.

Peruvian Trainers Hits 10,000 Milestone

Trainer Juan Suarez won five races on Saturday at Hipodromo de Monterrico in Lima, Peru to become the first trainer worldwide to have 10,000 career winners. Entering Sunday, Steve Asmussen had 9,592 winners.

Over the last five years, Suarez is averaging 315 wins a year, while Asmussen is averaging 390. That means Asmussen will likely chip away at Suarez's lead but could spend years trying to catch him. The main advantage Asmussen has is his age. He is 16 years younger than Suarez and will surely outlast him.

The Flightline Watch

Trainer John Sadler has yet to decide where budding superstar Flightline (Tapit) will run next after his ultra-impressive win in the GI Runhappy Malibu at Santa Anita. But he has ruled out a start in either the G1 Saudi Cup or G1 Dubai World Cup. Sadler has mentioned the GI Metropolitan H. and the GI Pacific Classic as possible starts for Flightline.

Kristian Rhein and the “Assloads” of SGF-1000

Kristian Rhein, a suspended veterinarian formerly based at Belmont Park, was sentenced last week to three years in prison for his role in the conspiracy to dope horses that also involves Jason Servis and Jorge Navarro. Rhein was caught on a wiretap bragging that he sold “assloads” of the prohibited medication SGF-1000 not just to Servis but to other trainers.

Rhein isn't the first drug distributor or manufacturer to plead guilty and, surely, every one of them were peddling their drugs to a lot more than just Servis and Navarro and the other trainers who have been indicted. A check of Rhein's records alone could yield dozens of names of trainers who were using SGF-1000 and, therefore, cheating.

Will there be more indictments, maybe many more, to come? I'm beginning to think that it's not going to happen, that the FBI and the Department of Justice are ready to move on to matters more important to them than horse racing. But that shouldn't mean the story ends there. Will any state racing commissions investigate, ask the FBI to share their information, interview Rhein and the others? It's horse racing. Probably not.

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Drug Company Sales Director Michael Kegley Sentenced To 30 Months In Prison

Former MediVet sales director Michael Kegley, Jr. was sentenced to 30 months in federal prison Jan. 6 after he entered a plea of guilty to one count of drug adulteration and misbranding in the ongoing case around a series of racehorse doping rings, reports the Thoroughbred Daily News. Among the misbranded and adulterated performance-enhancing drugs marketed and sold by Kegley was “SGF-1000.”

During his plea hearing in July, Kegley stated: “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.”

Kegley's brother-in-law, Dr. Kristian Rhein, received a three-year prison sentence on Wednesday for his involvement in the same case. Trainer Jorge Navarro was last month sentenced to five years in prison.

The sentence requires Kegley to forfeit $3,310,490, equal to the amount of the illegal substances the government seized, but a court order states that if he makes the payment within two years of his prison release he will only need to pay $192,615.

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.

Read more about SGF-1000 in our previous reporting here and here.

Read more at the Thoroughbred Daily News.

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