Government indicts New York Racing Association, six former workers on fraud charges


Thursday, December 11th 2003, 12:00 am
By: News On 6


NEW YORK (AP) _ The New York Racing Association and six former employees were indicted Thursday on fraud charges alleging that track tellers ran money laundering, gambling or loan-sharking schemes using their access to NYRA and bettors' money.

The racing association has agreed to cooperate in exchange for deferred prosecution, authorities said Thursday in announcing the conspiracy and tax charges.

Under the settlement, NYRA promised to cooperate with the government, institute reforms and restructure its senior management. In return, the association will not be brought to criminal trial and will be allowed to continue running Aqueduct, Belmont and Saratoga thoroughbred tracks.

The other defendants were due to appear later Thursday in federal court to answer the criminal charges. Investigators allege that two former NYRA department directors indicted ignored rampant corruption among track tellers. Four former tellers also were indicted.

Federal investigators have probed NYRA's operations for three years since the state Racing & Wagering Board discovered suspicious and illegal behavior by NYRA clerks. As a result, 16 NYRA mutuel clerks have already been convicted of tax evasion, and three were convicted of money laundering.

Racing officials had warned prosecutors that a criminal case against NYRA itself could cause the loss of its state franchise, cost the state hundreds of millions of dollars in revenues, and destroy the economy of Saratoga Springs, home of Saratoga Race Course. NYRA has been the nonprofit operator of the Saratoga, Aqueduct and Belmont tracks since 1955.

The deal has been likened to settlements reached between federal prosecutors and private corporations in white-collar cases.

Unlike a plea deal resulting in a conviction, prosecutors agree to hold off prosecuting a corporation facing criminal charges if company officials acknowledge wrongdoing and agree to fines and reforms. Once an outside monitor confirms the conditions are met, the case is dropped.