One Year After the Indictments, Cheaters Still Prosper

On March 9, one year will have passed since one of the darkest days in the long history of Thoroughbred racing rocked the sport to its core.

It was early in the morning hours of March 9, 2020, when arrests were made following the federal indictments of 27 individuals, including trainers Jason Servis and Jorge Navarro, for their alleged roles in a misbranding conspiracy to manufacture, distribute, and administer illegal substances to racehorses.

With the COVID-19 pandemic disrupting all facets of life, two of the sport's most successful trainers—with a combined 384 wins and earnings of $17.8 million in 2019—have yet to face a jury of their peers and it's unlikely the case will begin before late summer. Given the volume of evidence in the case and court backlogs, it would not be surprising if the trial was pushed back to 2022.

Meanwhile, as a multitude of pre-trial motions and appeals have been filed with United States District Court Judge Mary Kay Vyskocil, racing has continued and in some corners of the industry there has been abject frustration that lessons have not been learned in the past year.

To them, the cheating and incredibly high win percentages that were at the heart of the indictments continue to be a blight on racing's landscape, even though the March indictments illustrated how a guilty plea could amount to five years in federal prison, bankruptcy in the face of staggering legal bills, and a lifetime ban from the sport.

"I would have gotten the message a year ago if I was a trainer, but I don't know if some people did," said Stuart Janney III, chairman of The Jockey Club. "It's great when they are caught in the regulatory framework and penalties become more severe, but people need to go to jail. This is stealing. It's not fun and games. 

"Unfortunately we continue to see things that look to be suspicious to us," he added. "We have been communicating with 5 Stones intelligence (a leading private investigation firm retained by The Jockey Club) and they are not indicating that we've gotten to the bottom of the bucket. To the extent that we have knowledge, we believe there is a long tail to this. Maybe people are more careful of how they are cheating, but I don't see a lot of evidence that people have stopped cheating."

According to sources close to the case, last year's indictments will not be the last. Another round are in the pipeline and have been delayed only because of the pandemic, which has caused federal law enforcement to focus on violent crimes and made the convening of a grand jury extremely problematic.

"Cheaters would come and go in the past, but what we've seen in the past 10 years is cheating becoming more prevalent at the highest levels, which has a lot of implications with the Stud Book and the integrity of the breed," Janney said. "It's more pervasive than it's been and it's much more difficult to detect. For a lot of reasons, not everywhere, but in too many places, the regulatory apparatus has atrophied or become irrelevant. It isn't working. People need to cooperate with investigators and not hinder them."

Though the pandemic has interrupted racing on a large scale, recent months have seen a return of the kind of abnormal results that raise the inevitable questions about what forms the basis of those glittering numbers: outstanding horsemanship; hay, oats, and water; or a circumvention of the rules through illegal medications.

"We have not seen the correction we were hoping for after the indictments," said Jim Gagliano, president and COO of The Jockey Club. "COVID did interrupt the momentum, but I'm kind of amazed at how some massive form reversals happen. People with certain (winning) records have to be prepared to be asked questions by skeptical people and the media."

That frustration explains why Janney said The Jockey Club remain committed to working with 5 Stones towards supporting a continued federal crackdown on cheating that will hopefully lead to lengthy jail terms as opposed to short-term suspensions.

"As for The Jockey Club and our budget," Janney said about funding investigations, "it's going to be part of our lives for a long time, maybe forever. This isn't the federal government and others coming in and doing something and then leaving. This is going to be a fact of life if I have anything to do with it and if The Jockey Club has anything to do with it. It's going to require that. I wish it didn't, but it does."

Reflective of the struggle the sport faces in stopping the use of illegal medications, sources close to the investigation say some horsemen are now using a painkiller that has been on the market for a considerable amount of time though a test for it has yet to be created. 

One positive effect of the indictments was that it opened eyes throughout the industry to the perils presented by illegal medications and sparked increased support for the passage of the Horseracing Integrity and Safety Act, which was signed into law in December by President Trump. The new law empowers the Horseracing Integrity and Safety Authority and its nine-member board of directors to work with the United States Anti-Doping Agency to establish an anti-medication and anti-doping control program on a national basis.

Since the Safety Authority's program will not be effective for another 16 months, Gagliano said The Jockey Club has been working with several racetrack operators—including the New York Racing Association—and state regulators that have pledged assistance in the investigations.

"We will continue to seek partners in those efforts, such as tracks and regulators," Gagliano said. "Inexplicably, some track operators have not welcomed those resources."

Dave O'Rourke, NYRA CEO and president, has been an active supporter of the reforms at the heart of the HISA and will continue "to protect the integrity of the sport and enhance safety." 

"The passage of the Horseracing Integrity and Safety Act, which enjoyed universal support by every major racing entity in the country, arrives at a critical time for the sport," O'Rourke said. "The HISA will achieve the type of reforms long supported and advanced by NYRA, including a national approach to medication control and the strongest anti-doping authority the sport has ever seen. The sport came together in similar fashion in the spring of 2019 to commit to phasing out race-day medication, beginning with a ban on Lasix in all 2-year-old races in 2020 before expanding that prohibition to all stakes races in 2021. These efforts were ongoing prior to the revelations (in the federal indictments) made public last spring, and they will continue long after the criminal cases in question are dealt with by the courts."

Craig Fravel, CEO of Racing Operations for The Stronach Group, declined an interview request for the story.

Gagliano said The Jockey Club and others, including Meadowlands Racetrack operator Jeff Gural, engaged 5 Stones intelligence in 2016 because of a belief that serious and systemic cheating was occurring at all levels of the sport, including the highest-profile events.

The FBI received early help from 5 Stones in the gathering of evidence and its ability to request wire taps, which built cases against Servis, Navarro, and the other defendants for their alleged misbranding and use of SGF-1000, which is believed to be a growth hormone derived from sheep and swine that was not showing up in post-race or out-of-competition testing.

At NYRA, concern with allegations over the increased usage of growth hormones led to a note in the overnight sheet of races at the 2019 Belmont Park fall meet that warned horsemen of how all forms of growth hormones and growth factors were prohibited by the New York State Gaming Commission and that their use could lead to a revoking of licenses, among other penalties.

"The federal indictments unsealed last year allege a sickening pattern of conduct engaged in by the trainers, veterinarians, and others who are accused of widespread cheating and fraud while callously disregarding the health and safety of horses in their care," O'Rourke said. "There is absolutely no place in our sport for cheaters who would administer illegal or banned substances to horses in training or competition to gain an edge. This is why NYRA utilizes every resource at our disposal to stop and expose those who attempt to break the rules. NYRA has and will continue to aggressively monitor activities and behavior at our facilities and we will refer all information to relevant law enforcement agencies and the New York State Gaming Commission for further investigation."

As for the case itself, which is being prosecuted by the United States Attorney's Office for the Southern District of New York, a superseding indictment was issued in November that included four counts of a conspiracy involving misbranding and drug adulteration and one for mail and wire fraud.

Besides Servis and Navarro, those charged in the superseding indictment are Erica Garcia, Kristian Rhein, Alexander Chan, Marcos Zulueta, Michael Tannuzzo, Christopher Oakes, Seth Fishman, Jordan Fishman, Lisa Giannelli, Rick Dane Jr., Rebecca Linke, and Michael Kegley Jr.

While most of the charges in the March indictment carried prison terms of five years, in some instances the new indictment included penalties of up to 20 years behind bars.

The superseding indictment did not include charges against Gregory Skelton, Ross Cohen, Henry Argueta, Nick Surick, and Chris Marino, who were defendants in the original indictment. Legal experts say their absence in the superseding indictment could indicate they are prepared to plead guilty, are working on plea deals for lighter sentences, or will have charges against them dropped.

The superseding indictment alleged that race doping by Servis and Navarro dates back to 2016. During that period, Servis, who trained 2019 3-year-old champion male Maximum Security , and Navarro, a seven-time leading trainer at Monmouth Park, have a combined 1,282 wins and more than $52 million in earnings through March 8, 2020.

Sources have indicated defense strategies may include contentions that SGF-1000 has little impact on Thoroughbreds and is similar to permissible medications. The prosecution is expected to make heavy use of wiretap information revealing that the defendants were fully aware that their actions were illegal and they willfully engaged in a conspiracy to deliver and administer drugs that were intended to be performance-enhancing.

According to wiretap information in the indictment, in a March 5, 2019 phone call, Servis and Navarro discussed their use of SGF-1000.

"I've been using it on everything almost," Servis told Navarro, who said he "got more than 12 horses on" SGF-1000.

In another intercepted call, Rhein, a veterinarian who treated Servis' horses, tells Servis, "They don't even have a test for it (SGF-1000) … There's no test for it in America."