Two-time national champion Indian Blessing has traveled far and wide in adding accomplishment after accomplishment to her vaunted graded-stakes resume. And her lesser-known older brother has had his fair share of journeys, too, though more often due to court-related drama – including a criminal arrest – than for racing glory.
Shame on Charlie, a 5-year-old full brother to Indian Blessing, is one of several horses caught up in heavy fallout from a failed deal over a tack business, a dispute that has evolved into eight felony charges being levied in New Mexico against one of the parties.
The son of Indian Charlie, who was the first foal out of the Flying Chevron mare Shameful, is currently in New Mexico under the care of one of the legal combatants, horseman Clyde Rusk Veltmann. But criminal charges that include livestock larceny are still pending against Michael Harry Hagan, and multiple state and federal civil cases featuring the two court adversaries are actively being litigated.
The facts of this prolific legal extravaganza are vehemently disputed by the respective parties. But it is evident New Mexico authorities have taken notice of some aspects of the storyline by issuing the felony warrant in February against Hagan, who was arrested in California and jailed for two weeks awaiting extradition. Now affiliated with a company called Race Horse Supply, Hagan has since entered a plea of not guilty and is free on a $13,000 bond.
“I was defrauded by a guy that sold me a company,” said Veltmann, whose wife and business partner, Diantha, is also a party to the legal fracases. “He and his attorney smooth-talked and conned some people at the track so they could take the horses.”
The attorney the horseman mentioned, George M. Wallace, who is also a named defendant in some of the cases, denies the allegations made by Veltmann against him and his client, and claims Hagan will be vindicated of the criminal charges.
“He is not going to see a jail cell in this matter ever again,” said Wallace, who is not representing Hagan in the criminal matter.
Business deal gone wrong
The various legal disputes stem from the 2006 purchase by an entity affiliated with Veltmanns of the Craigmyle Halter Co. tack manufacturing operation in California, which Hagan claims to have managed. A $150,000 down payment was made by the Veltmann company, but the balance of the $250,000 purchase price was not made by the Dec. 1 deadline of that year.
Why the payment was not made is at the very core of related lawsuits between Veltmann and Hagan, and involves arguments over whether the latter had authority to sell Craigmyle’s assets, as well as disputes over trademark rights, among other issues.
Further complicating matters is that Hagan, in August 2007, was awarded a $100,000 judgment in California federal court against Veltmann for the non-payment. But the judgment was granted a couple months after the Veltmanns filed for Chapter 11 bankruptcy reorganization in New Mexico, and should have been waived.
Acting on what he claimed at the time was a valid court judgment and a fear that the Veltmanns’ bankruptcy was moving toward Chapter 7 liquidation, Hagan in November 2007 was able to take possession of four Veltmann-trained horses from Zia Park near Hobbs, N.M., including Shame on Charlie.
Hagan then took the horses back to his home state of California and eventually sold Shame on Charlie and two of the other horses to different owners, including the stakes-winning Dancing Squall to prominent owner B. Wayne Hughes as a broodmare prospect.
But Veltmann went back to federal court and the judge, acknowledging he made a mistake in granting the judgment in lieu of the bankruptcy proceedings, in November 2008 ordered Hagan to take whatever measures were necessary to return the horses, as well as a collection of jewelry seized along the way. Veltmann claims the total value of the seized assets was about $900,000; Hagan’s estimates are much less.
Return of the horses … sort of
Shame on Charlie and a filly, American Symphony, were eventually returned to Veltmann’s care in January. Another filly, Valentina Way, had previously been euthanized in California following a racetrack injury. Dancing Squall is still at Hughes’ Spendthrift Farm near Lexington, and the farm has let New Mexico authorities know it will resist any attempted seizure of the mare until legal matters are resolved.
“We certainly weren’t aware of any ownership dispute when we purchased the mare privately,” said Spendthrift Farm general manager Ned Toffey. “We’re now aware there is a dispute over prior ownership, but until that is settled, and it’s demonstrated otherwise, we consider the mare ours.”
New Mexico law officials did not return calls and e-mails from The Blood-Horse seeking comment about the criminal investigation.
The Veltmanns formerly owned whole or partial interests in the four horses, but transferred their ownerships to a relative, Brittany Andrews, a couple weeks before Hagan seized the horses at Zia Park. In December 2007, the Veltmanns, Andrews, and the other owners filed a civil lawsuit in New Mexico state court against Hagan, Wallace, the New Mexico State Racing Commission, and commission investigator Steve Drake.
Drake and the commission, which was accused of acting improperly in allowing the seizure of horses from Zia Park, were dismissed from the lawsuit in January. Drake did not respond to requests for comment.
Veltmann vows to pursue further action against the racing commission, which he claims let the horses go without proper writs of execution. Wallace acknowledged that traditional writs, which are enforced by federal marshals, were not executed in the Zia Park seizure, though they were in the legal pipeline.
“While I was proceeding with the lengthy process of writs of execution, Hagan started talking to the racing commission,” he said. “With the knowledge and approval of the racing commission, they were released to Mike Hagan. You know that horses don’t just go willy-nilly from the backstretch. There was an official release.”
Veltmann has also repeatedly asked the California Horse Racing Board to fine Hagan and have his owner’s license suspended.
“I don’t get why the CHRB hasn’t ruled on Mike Hagan,” he said. “It’s just not right.”
The CHRB in a recent e-mail addressed to Veltmann, which the The Blood-Horse was copied on in response to queries, said the “resolution of the New Mexico state charges against (Hagan) will be an integral part” of the investigation.
Shame on Charlie’s race career pales considerably when compared to Indian Blessing, who has won five grade I races, including the 2007 Breeders’ Cup Juvenile Fillies, and was most recently second in the Dubai Golden Shaheen Sponsored by Gulf News (UAE-I).
Battling injuries for most of his racing career, Shame on Charlie started four times in early 2007 for breeders Hal and Patti Earnhardt, finishing second in a maiden claiming race at Santa Anita. But the horse was pulled up in his next two races, and Veltmann said he privately purchased Shame on Charlie from the barn of trainer Bob Baffert in April 2007.
Shame on Charlie was then pulled up in his first start for the new ownership in the Norgor Derby at Ruidoso Downs in May 2007, and followed that effort a month later with a fifth place in a maiden special weight at the New Mexico track. He hasn’t raced since, although Veltmann said the horse is back in light training.
The Veltmanns have a felony record resulting from what Clyde Veltmann said was a dispute with investors on specialized machinery used in a remedial environmental company they formerly operated. According to online docket records, Diantha Veltmann in 1996 pleaded guilty to one count of transportation of stolen property and received five years probation, while Clyde Veltmann pleaded guilty to a count of withholding information on a crime and received three years probation. They were also ordered to pay restitution of nearly $75,000.
“It’s something I have had to carry for the last 14 years,” Clyde Veltmann said. “It’s nothing I am proud of, but it also doesn’t give people the right to run over me.”
Hagan is also facing a contempt charge leveled by Veltmann in California federal court for not properly adhering to deadlines contained in the order mandating the return of the horses and jewelry.