Dec 11, 2003
The Associated Press
NEW YORK -- The New York Racing Association, two of its former department directors and four former tellers were indicted Thursday on conspiracy and tax charges.
The racing association agreed to cooperate in exchange for deferred prosecution.
Authorities announced the indictments and settlement at a news conference in Brooklyn, where investigators disclosed that the scheme had resulted in $19 million in unreported income since 1980.
Investigators allege that NYRA managers ignored rampant corruption among track tellers. The tellers, they say, ran money laundering, gambling or loan-sharking schemes using their access to the racing association and bettors' money in their cash boxes.
Andrew C. Hruska, acting U.S. attorney, rejected suggestions that prosecutors were being lenient toward the racing association as white-collar scandals are prosecuted elsewhere.
Hruska said prosecutors were doing "everything we can" to punish the racing association short of dissolving it.
Among 24 defendants charged with federal crimes in the scheme was a former racing association director accused of making illegal payments to a union official.
The charges resulted from a probe of the racing association, a non-profit corporation licensed by the state to operate thoroughbred racetracks at Belmont Park, Aqueduct Raceway and Saratoga Racecourse.
Some of the crimes were committed by some of 250 tellers and mini-dealers who handle betting transactions on race days, authorities said.
The investigation revealed that many employees from 1994 through 1999 dodged federal taxes by claiming tax-deductible shortages from betting transactions that did not really exist. Legitimate shortages are tax deductible.
During those years, 143 racing association employees deducted millions of dollars in this way, sometimes making their bogus shortages equal to their paychecks so that they would pay no taxes, investigators said.
An indictment in U.S. District Court in Central Islip alleged that the racing association and its senior management were aware of the tax-cheating scheme but did nothing to stop it.
At a 1991 meeting, senior managers acknowledged that the racing association permitted the fraud to please its employees and to ensure they would process betting transactions quickly, prosecutors said.
As part of a deal to defer prosecution for 18 months, the racing association agreed to pay $3 million in fines, to fully cooperate with prosecutors, to restructure its management and to submit to a court-ordered monitor.
The Associated Press
NEW YORK -- The New York Racing Association, two of its former department directors and four former tellers were indicted Thursday on conspiracy and tax charges.
The racing association agreed to cooperate in exchange for deferred prosecution.
Authorities announced the indictments and settlement at a news conference in Brooklyn, where investigators disclosed that the scheme had resulted in $19 million in unreported income since 1980.
Investigators allege that NYRA managers ignored rampant corruption among track tellers. The tellers, they say, ran money laundering, gambling or loan-sharking schemes using their access to the racing association and bettors' money in their cash boxes.
Andrew C. Hruska, acting U.S. attorney, rejected suggestions that prosecutors were being lenient toward the racing association as white-collar scandals are prosecuted elsewhere.
Hruska said prosecutors were doing "everything we can" to punish the racing association short of dissolving it.
Among 24 defendants charged with federal crimes in the scheme was a former racing association director accused of making illegal payments to a union official.
The charges resulted from a probe of the racing association, a non-profit corporation licensed by the state to operate thoroughbred racetracks at Belmont Park, Aqueduct Raceway and Saratoga Racecourse.
Some of the crimes were committed by some of 250 tellers and mini-dealers who handle betting transactions on race days, authorities said.
The investigation revealed that many employees from 1994 through 1999 dodged federal taxes by claiming tax-deductible shortages from betting transactions that did not really exist. Legitimate shortages are tax deductible.
During those years, 143 racing association employees deducted millions of dollars in this way, sometimes making their bogus shortages equal to their paychecks so that they would pay no taxes, investigators said.
An indictment in U.S. District Court in Central Islip alleged that the racing association and its senior management were aware of the tax-cheating scheme but did nothing to stop it.
At a 1991 meeting, senior managers acknowledged that the racing association permitted the fraud to please its employees and to ensure they would process betting transactions quickly, prosecutors said.
As part of a deal to defer prosecution for 18 months, the racing association agreed to pay $3 million in fines, to fully cooperate with prosecutors, to restructure its management and to submit to a court-ordered monitor.
