Former Prosecutor: Navarro, Servis Longshots to Win

Jason Servis and Jorge Navarro may have won a score of races as heavy favorites in the last few years, but the two trainers are longshots to prevail against federal charges that can land them as much as five years in prison.

Navarro is facing two federal counts of involvement in a misbranding conspiracy and Servis one count after they were indicted March 9 by the United States Attorney's Office for the Southern District of New York, and a former federal prosecutor and deputy chief in that office says the indictment contains allegations against them that are extremely serious, outline a wide-ranging criminal conspiracy, and appear to be supported by compelling evidence of guilt.

In offering his opinions on the case, Robert Rice, an Assistant United States Attorney, in the SDNY from 1991-2000 and deputy chief of the criminal division from 1998-2000 who now specializes in defending individuals charged in these types of cases, said the indictments against Navarro and Servis are filled with allegations and descriptions of supporting evidence that will be difficult for their legal teams to defend. 

"The indictments quote from various interceptions, which suggests that the government had a wiretap on someone's phone. They also quote from communications, which are likely text and emails, all of which are fairly explicit and very damaging to the defendants," said Rice, who had extensive experience prosecuting fraud cases for the Southern District and is currently a partner in Clifford Chance's White-Collar Defense Group Practice. "I would be surprised if the communications quoted in the indictments do not precisely track documents the government obtained during its investigation, or wiretaps used in its investigation, and many of them are quite damning and inculpatory.

"On its face, the indictment is a pretty strong case."

Navarro and Servis are among 19 defendants in United States vs. Jorge Navarro, et al., who face misbranding charges stemming from the March 9 indictments of the two trainers and 25 others in four separate cases of conspiracies to manufacture, distribute, and administer adulterated or misbranded performance-enhancing drugs that were administered to racehorses.

The indictment claims Navarro "executed this scheme by using PEDs designed to evade drug tests, physically concealing containers of PEDs and drug paraphernalia from state regulators and racing officials, administering and directing others to covertly administer PEDs, and shipping certain products designed to mask the presence of PEDs through a straw purchaser."

It also charged that Servis "orchestrated a widespread scheme of covertly obtaining and administering adulterated and misbranded PEDs, including a PED called SGF-1000, to virtually all of the racehorses under his control."

Navarro is a seven-time leading trainer at Monmouth Park and the leader at the 2018-19 Championship Meet at Gulfstream Park while Servis is best known for training the 2019 3-year-old champion male, Maximum Security, who won the $20 million Saudi Cup Feb. 29 and was disqualified from first to 17th for a racetrack foul in last year's Kentucky Derby Presented by Woodford Reserve (G1).

The indictment covers a period from 2018-20 during which time Navarro won 447 races in North America with earnings of $14,155,535. Servis recorded 331 wins with earnings of $19,868,761, which does not reflect the $10 million Maximum Security earned in the Saudi Cup, a race that netted Servis $1 million from a trainer's customary 10% share of a winning purse.

In tackling those charges, the two trainers will be facing prosecution from one of the nation's premier federal offices.

"Generally, you start out behind the eight ball as a defendant in the SDNY because it is regarded as one of the most prestigious prosecutors' offices in the country and is staffed with very talented, dedicated, and hard-working prosecutors," Rice said. "The prosecutors will have amassed a substantial amount of documentary evidence, such as the referenced communications between the defendants, records that tie the defendants to the phones and emails used for those communications, records of drug shipments that trace the drugs going to the defendants and their co-conspirators, and the like.

"They will likely have people who are experts in science examine the drugs and will say they are not what they purport to be. They should have a strong documentary evidence of the shipments and the communications are explicit and damning."

A key hope for the defendants will be having evidence such as wiretaps ruled inadmissible in the case, but that happens far more often in television courtroom dramas than real-life cases.

"The defendants would likely try to suppress any wiretap evidence but that happens only very rarely," said Rice, a New Jersey resident who was also a chief counsel to the chair of the United States Securities and Exchange Commission from 2013-15. "It's very difficult to get wiretap evidence suppressed absent of some blatant violation by the government, which is rare."

Rice also said the SDNY's description of the conspiracy as "The Navarro Conspiracy" and the fact that Navarro is listed first among the defendants suggests that the government views him as one of the leaders of the criminal conspiracy and a prime target.

"As a matter of practice the defendants are listed with the ones who are biggest targets at the top of the indictments. It doesn't have to be that way but it's usually the practice of that office. When they call it the Navarro case it says that the government views Navarro to be the head guy," Rice said. "They want to convict everyone but they may be willing to trade off a sentence of a lower level defendant to enhance the case against Navarro."

On the indictment, the defendants are listed in order as Navarro, Erica Garcia, Marcos Zulueta, Michael Tannuzzo, Gregory Skelton, Ross Cohen, Seth Fishman, Lisa Giannelli, Jordan Fishman, Rick Dane Jr., Christopher Oakes, Servis, Kristian Rhein, Michael Kegley Jr., Alexander Chan, Henry Argueta, Nicholas Surick, Rebecca Linke, and Christopher Marino.

There are six counts of a misbranding conspiracy and obstruction contained in the Navarro Indictment with Surick facing four counts, two of them having a maximum penalty of 20 years in jail. Navarro and Seth Fishman are charged in two counts, each carrying a maximum sentence of five years.

The first count lists the defendants, in order, as Navarro, Garcia, Zulueta, Tannuzzo, Skelton, Cohen, Seth Fishman, Oakes, and Surick. The third count lists Servis followed by Rhein, Kegley Jr., Chan, Argueta, and Navarro.

While Navarro faces two counts and a maximum combined sentence of 10 years, Rice said in most cases defendants do not receive the maximum penalty in both counts.

"A judge is empowered to apply the maximum sentence in both counts but they rarely impose consecutive sentences," he said. "If someone is convicted on two counts of five years each, I would be surprised if they get more than five years because it would be unlikely for the judge to impose consecutive sentences. What's theoretically possible and what happens in real life are two different things."

What could work in the defendants' favor is that the judge assigned to the trial, Mary Kay Vyskocil, has limited experience with criminal cases. She was appointed a U.S. District Judge in December after serving as a U.S. Bankruptcy Judge for three years and practicing commercial litigation for more than 30 years. Judges new to criminal cases are often more liberal toward defendants.

Given the amount of evidence and delays due to the COVID-19 pandemic, which caused an adjournment of the defendants' March 23 arraignment until an unspecified date, Rice expects that the actual trial may not begin until 2021. Given that timetable and the amount of work it will take to defend Navarro and Servis, Rice believes the two trainers are facing substantial legal bills.

"It would not be unusual for the legal fees in this case to reach seven figures and the defendants may well need to provide a substantial six-figure retainer at the outset," he said.

While only the defendants can speak for the reasoning behind their actions, Rice's experiences in criminal cases has illustrated to him that many defendants make miscalculations believing that they can get away with their crimes or that the penalty will be light. In a sport such as horse racing, where medication violations can sometimes lead to relatively brief suspensions, Rice sees comparisons to the "Varsity Blues" college admissions scandal.

"The conduct underlying the allegations against Navarro and Servis and the others is not new," Rice said. "These guys may have thought a) they will never get caught or b) under a cost-benefit analysis, any penalty would be light and they miscalculated the consequences. It's not much different in the 'Varsity Blues' case. I doubt (actress) Lori Loughlin ever thought that she risked going to federal prison. More likely, she assumed a much lesser risk, such as her daughter being denied entrance to USC and that would be it. I imagine some people in this case never thought the federal government would go after them and they would wind up in jail, and that was a big mistake on their part."