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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