Horses on Sidelines as Owners Face Charges

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The fate of 111 Thoroughbreds is in the hands of the FBI after one of the strangest embezzlement cases in Northern California history.

Michele Serrao and Bryan Rosenquist, who operated under the stable name Bella Thoroughbreds, face 30 years in prison for embezzling $12.7 million -- all in $20 bills. The bulk of the money was apparently spent on racehorses as well as a Vallejo, Calif., ranch and several racing mules.

"They had Thoroughbreds, mules, and apparently were purchasing more horses in Kentucky," said Roy Minami of the California Horse Racing Board. "This whole thing was pretty surprising. We've never seen anything of this magnitude before."

Stewards representing the CHRB set up a hearing Oct. 11 at Bay Meadows. "But they didn't show up," steward John Herbuveaux said. "We didn't get into the merits of the case, but we suspended their licenses for failure to appear."

Rosenquist and Serrao couldn't appear at the hearing because they're still in jail. Rosenquist was denied bail on Oct. 5, while Serrao had her bail hearing Oct. 12. After a federal grand jury indictment, both pled not guilty to federal charges of conspiracy to embezzle funds and bank fraud. They were scheduled to appear in U.S. District Court in Oakland Oct. 15.

Meanwhile, the FBI has to decide what to do about the animals.

"The FBI has jurisdiction as far as taking possession of the horses," Minami said. "But right now, they cannot be entered in a race. We're conducting our own investigation."

According to the FBI, the Vacaville, Calif., couple embezzled the money over several months from Bank of America via their former employer, money transport specialist Loomis, Fargo & Co. Both Rosenquist and Serrao worked for Loomis at a Richmond, Calif., vault center owned by Bank of America.

Though they made less than $68,000 a year between them in their bank security jobs, they had at least $3.4 million in their checking accounts and a ranch full of Thoroughbreds at the time of their Sept. 26 arrests.

Rosenquist and Serrao dealt with money transported by Loomis armored trucks to and from Bank of America automated teller machines. Vault manager Rosenquist, 39, supervised security for the money at the Richmond vault center. Serrao, 41, counted the cash and signed off on balance sheets. By manipulating their balance sheets, they were able to cover up the fraud. They had no previous criminal history.

A week after Rosenquist and Serrao quit their jobs on Aug. 30, Loomis officials discovered the shortfall during an audit and alerted authorities. Included in the missing money was a $4.8-million shipment of cash from Bank of America Aug. 24.

The FBI and Internal Revenue Service criminal investigations unit discovered more than $3.4 million in the couple's checking accounts at a Vacaville credit union. At their 60-acre ranch, authorities found 50 horses, 10 mules, 100 cattle, several sheep, a flock of free-range chickens, and assorted cars and all-terrain vehicles. Their other 61 racehorses, mostly low-level claimers each worth $5,000 to $10,000, are in training at various California racetracks.

Before their arrests, no one at Loomis suspected Rosenquist or Serrao, who drove a 1977 Chevy Nova to work.

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