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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