Former NBA Player Files Lawsuit Against ClassicStar

Former professional basketball player Greg Minor is among the latest to join a long list of investors who claim former broodmare lease operator ClassicStar and its affiliates caused them to lose large sums of money.

Minor, who played college ball at the University of Louisville and had a five-year pro career with the Boston Celtics, is among three related plaintiffs who June 12 filed a lawsuit in Florida federal court seeking damages well in excess of $6 million from ClassicStar and other individuals and entities.

The complaint claims Minor first heard a sales pitch from former ClassicStar marketing director S. David Plummer during the “feature presentation” of a 2003 meeting of the National Basketball Retired Players Association in Las Vegas.

ClassicStar personnel later that year then allegedly treated the retired athlete and his wife, Stephanie, with all-expenses paid trips to Lexington, the 2003 Breeders’ Cup races at Santa Anita Park, and a weeklong “business conference” in St. Croix of the U.S. Virgin Islands, where the Minors claim they eventually signed on for a mare lease program valued at more than $9.1 million.

As with other lawsuits claming fraud by ClassicStar and its affiliates, the Minors’ charge the lease program didn’t deliver on pre-sale boasts of delivering significant federal tax savings. The Minors claimed more than $9 million in deductions related to the program on their 2003 income tax return, write-offs that were first accepted by the Internal Revenue Service, but later rejected following a 2006 audit, the lawsuit alleges.

Just a few months prior to the audit, federal agents connected to the IRS seized business documents during raids at both the former ClassicStar Farm location near Versailles, Ky., and Plummer’s horse ranch in Utah. A related criminal investigation by the U.S. Attorney’s Office in Oregon is believed to be ongoing.

Among the damages the Minors are seeking are claims of more than $2 million in interest and penalties assessed by the IRS. Attempts to reach the Minors through their Florida attorneys were not successful. An article posted on the NBRPA Web-site in January 2006 said the Minors were “heavily involved” in the Thoroughbred industry.

The Minors also claim ClassicStar didn’t have enough mares to cover all of its lease programs, and that they were persuaded to exchange some of their mare interests for stocks in energy company Gastar, a common thread running through most legal actions involving ClassicStar.

GeoStar, the parent company of ClassicStar, held nearly 16 million shares of Gastar stock in July 2006, according to filings with the Security Exchange Commission, but the Minors claim they were told by GeoStar “that it does not have the stock shares to transfer to the plaintiffs, (nor) the funds to repurchase the stock shares.”

The lawsuit alleges ClassicStar sought out retired professional athletes to invest in its programs and that the Minors were “urged … to discuss with fellow retired players the benefits … of beginning a horse breeding business through the Mare Lease Program … (and) expressed the desire to use Greg Minor as a ClassicStar marketing tool to other professional athletes.” The Minors claim they entered into the program partly on the advice of former professional basketball player Thurl Bailey.

Among the other defendants named in the 64-page complaint are former ClassicStar president Spencer D. Plummer; ClassicStar managing member Tony Ferguson; GeoStar executives John W. Parrott and Thomas E. Robinson; the National Equine Lending Co. and one of its executives, Terry L. Green; and California accountant Dwayne Schiellack. Defendants either declined comment to The Blood-Horse or couldn’t immediately be reached for comment.

Robinson, the president of GeoStar, served as chairman of the board of Gastar until resigning the position last August, according to documents filed with the SEC. He also served as Gastar's president and CEO from 2001 to 2004, and at last report (in January 2006), held more than 10 million shares of Gastar stock.

There are several active legal skirmishes involving ClassicStar and its former and current affiliates, some of which level federal racketeering and wire fraud allegations. An affidavit filed in another lawsuit indicated the company was involved in 25 legal actions in six states as of early March. Since then, there have been at least seven additional lawsuits filed at various court levels.

The Plummers left ClassicStar in February 2006, and they and Ferguson have distanced themselves from each other. There are at least three lawsuits active in the Utah court system in which at least one of the Plummers are among plaintiffs suing GeoStar and related affiliates, who have in some instances filed counter-claims.

Ferguson, who is also involved in GeoStar, has said he wants to clear up legal matters involving ClassicStar and continue on in the Thoroughbred industry. The company recently sold its farm property in Versailles, as well as its remaining mares, and in a press statement, said the transactions would “clear the path for (ClassicStar) to focus on resolving ongoing issues.”