Hearing Officer Questions NYSGC Investigation

A government-appointed hearing officer has sharply rebuked the regulatory agency that oversees Thoroughbred racing in New York for failing to meet its legal obligations in the handling of an investigation that led—initially—to the suspension and fine of trainer Eduardo Jones in a case in which he was accused of being a "front" or program trainer.

The board of the New York State Gaming Commission last week unanimously agreed to side with Jill Pilgrim, a hearing officer appointed by the agency to consider disciplinary cases. In November, she recommended the commission's board overturn decisions by racing stewards who a year ago slapped Jones with a 60-day suspension and $5,000 in fines.

Pilgrim's written recommendation and findings, however, have not yet been released by the gaming commission. But Jones' lawyer, Karen Murphy, supplied BloodHorse with a copy of Pilgrim's 63-page report that, in painstaking detail, went through the state's case against Jones and the horse, Tanya's Gem, who raced under his name in the fall of 2018 at Belmont Park.

The independent hearing officer, a business, sports, and dispute resolution attorney, raised considerable reservations about how all the sides in the Jones matter handled the dispute. But she was especially harsh on how the overall investigation was handled by the state.

"Despite the (Gaming) Commission having the requisite legal responsibility and authority to regulate the integrity of racing, I find that the Commission failed in its obligations to conduct a fair and thorough investigation that comports with expected legal standards for a government regulatory agency,'' Pilgrim wrote in the Nov. 14 report that came after she conducted four hearings into the matter last March and April.

Pilgrim said the gaming commission, like other regulatory bodies, wields enormous power over the entities and individuals it oversees and can impact the livelihoods of people who participate in racing. 

"The Commission is such an agency with the concomitant heightened duty of care. It must not only enforce the rules of racing and New York law, the Commission must also operate within those rules and laws with integrity and competence. Regrettably, this matter illustrates an instance in which it failed to fulfill its mandate,'' Pilgrim wrote.

The case involved suspicions by stewards that Jones was acting as a front trainer for the horse owned by Nicholas Panopoulos, a New York resident. The horse did not have stall space in New York but was being transported back and forth from Hollywood Casino at Penn National Race Course, where she was trained by Paulina Sinnefia. Panopoulos wanted the horse to race closer to his home, so he arranged for Jones to be the horse's trainer for races at New York Racing Association tracks.

Tanya's Gem was transported for three races at Belmont in September and October 2018, and was entered in a race in November at Aqueduct Racetrack. On the morning of that Nov. 21 race, the record shows that the examining veterinarian could not locate the horse for a pre-race examination. The person who was present with the horse—the 16-year-old son of Sinnefia, the Pennsylvania trainer—was ordered to the offices of racing steward Steve Lewandowski. Under questioning, the boy said his mother was the horse's trainer.

Jones had been with the horse when it arrived at Aqueduct on the morning of that November race, but had to go to nearby Belmont to attend to other matters and so wasn't on the grounds at Aqueduct when stewards called to tell him to come to their office to answer questions about the horse, the record shows.

After discussions with Jones and Panopoulos, stewards that day determined "something was amiss with the information they were receiving,'' and so the horse was scratched from that day's fourth race, the hearing officer's report states. Next, they decided Jones was "falsely listing himself" as the horse's trainer, and officials slapped him with the suspension order and fines, and blocked the flow of $43,500 in purses the horse had won.

Pilgrim wrote that stewards were within their authority to investigate Jones, and even to scratch the horse from that day's race at Belmont. But she said the racing commission engaged in a "rush to judgment" by accepting the word of a 16-year-old "over the contrary statements of a NYRA-licensed owner and a duly licensed trainer with a long racing history and good reputation in New York racing circles.'' She found the evidence "credible" that the owner hired Jones in September 2018 in advance of the races in question.

Pilgrim offered pointed criticisms for how Jones handled the matter, however, saying he was not fully cooperative with the stewards and had an apparent "failure to appreciate the seriousness of his situation and the questions being asked of him.''

Jones had requested a gaming commission hearing after the fines and suspension were imposed by stewards.

Pilgrim said based on her observations during the four days' of hearings that "ego, disbelief, and bravado overcame" Jones. When he did realize the seriousness of the stewards' probe, Jones became "both angry and somewhat uncooperative and defiant."

However, Pilgrim wrote, the racing stewards "had a pre-determined mindset with respect to believing that (Jones) was a so-called program trainer and failed to conduct a thorough and appropriate investigation.''

One of the issues raised was also whether Jones had violated requirements that horses be in the "care, custody, and control" of a trainer immediately prior to a race. But Pilgrim determined that there is—despite long-held positions by racing officials—no specific rule or law in New York that mandates a horse be in the physical presence of its trainer immediately prior to a race.

Tanya's Gem finished first, second, and fifth in three races at Belmont in September and October 2018. Besides overturning the stewards' fines and suspension order, the racing commission last week ordered the original placements of the horse in those races be reinstated and that Panopoulos be awarded the purse money from the horse's showings in those races.

Brad Maione, a spokesman for the gaming commission, noted the agency's commissioners last week accepted Pilgrim's report without any modifications. "That action speaks for itself,'' he said Friday.

Murphy, Jones' lawyer, said the gaming commission failed in its basic regulatory mission by engaging in what she called a "pre-determination of wrongdoing'' against her client. She said the state wasn't alleging some "garden variety wrongdoing but rather charges of conspiracy, corrupt practices, and fraud.''

Murphy sharply criticized the NYRA and Jockey Club stewards involved in the matter, stating the NYRA steward helped lead what she described as a "stampede" to pre-judge Jones based on a "bungled" state investigator's report that was then followed up by gaming commission witness testimony during Jones' hearings. Pilgrim found that testimony "lacked credibility due to constant contradictory statements and apparent lack of candor.''

The lawyer said gaming commission witnesses during those hearings kept shifting the definition of "care, custody, and control" requirements, which don't even specifically exist in state law or the agency's own rules.

"Every participant-licensee deserves better than this treatment by the gaming commission and Eduardo Jones—having an unblemished racing record—received his justice through the findings of the hearing officer," Murphy said Friday evening. "I hope that her report will serve as a textbook going forward for all involved, and especially the racing stewards, that the search for the truth can not be based on 'supposition and beliefs'  and 'un-articulated' and unspecified 'rules of thumb' that lead in this case to a pre-determined outcome that turned out to be completely wrong."