In an order signed by a New Mexico judge Jan. 4, California horseman Michael Hagan pleaded no contest to three criminal charges stemming from a failed deal over a tack business in 2007.
The charges, which include two counts of shipping, driving, or receiving livestock out of state (from New Mexico to California) without an inspection, and one count of larceny, involve the horses Shame on Charlie, a 6-year-old full brother to Indian Blessing; Valentina Way; Dancing Squall; and American Symphony.
Three other larceny charges and two shipping charges against Hagan were dismissed. Hagan’s New Mexico-based lawyer, Tim Rose, said the state wanted to postpone the sentencing for several months because they were investigating other people involved in the case that may engaged in illegal activity.
“The case was actually set to go to trial yesterday,” said Rose Jan. 5. “We had moved for a continuance, because Mike had been in some ill health, and had a recommendation from his physician that the case be postponed. I think his health condition had a lot to do with him not wanting to go through the stress of a trial.”
While a "no contest" plea isn't an admission of guilt, it does allow the court to impose a sentence on Hagan. Rose said the motivating factor for the plea was due to the District Attorney’s office agreeing not to ask Hagan to serve jail time.
California Horse Racing Board spokesman Mike Marten, who spoke with the organization’s chief investigator, said in light of the recent ruling, further investigations will be done to decide whether they should revoke Hagan’s training license.
“Whenever anyone is convicted (of a crime), and the CHRB is aware of it, then we routinely look into the matter,” Marten said. “Every case is different, and of course this one involves multi jurisdictions, so there’s no set timeline (on a ruling).”
After accusations that Hagan unlawfully seized horses of New Mexico-based horseman Clyde Rusk Veltmann in order to settle a debt, a felony warrant was issued last February against Hagan, who was arrested in California and jailed for two weeks awaiting extradition. Originally pleading not guilty, he was set free on a $13,000 bond.
Veltmann told The Blood-Horse last April that the legal troubles started when Hagan sold him the California-based tack manufacturing operation Craigmyle Halter Co., and then defrauded him in various ways.
For reasons that are still being debated, Veltmann (who previously was convicted of an unrelated felony) failed to pay the $250,000 purchase price for the company, and Hagan was granted a $100,000 judgment against him in California federal court in spite of Veltmann filing for Chapter 11 bankruptcy soon afterward.
Acting on what he claimed at the time was a valid court judgment, Hagan in November 2007 took possession of the four aforementioned Veltmann-trained and formerly co-owned horses from Zia Park near New Hobbs, N.M., shipped them to California, and sold Shame on Charlie and two of the other horses to different owners. One of the horses, stakes winner Dancing Squall, was purchased by Spendthrift Farm owner B. Wayne Hughes as a broodmare prospect.
After the horses had already been sold, the judgment was reversed due to Veltmann’s bankruptcy claim, and the animals were ordered to be returned. While Shame on Charlie and American Symphony were given back to Veltmann last January, it was discovered that Valentina Way had been euthanized in California due to a racetrack injury. Dancing Squall will remain at Hughes’ Spendthrift Farm near Lexington until legal matters are resolved.
In December 2007, Veltmann, along with other previous co-owners of the seized horses, filed a civil lawsuit in New Mexico state court against Hagan, his California attorney George Wallace, the New Mexico State Racing Commission, and commission investigator Steve Drake. The latter two parties were accused of acting improperly by allowing the seizure of the horses from Zia Park.
A complete previous report on the matter, as well as details about Veltmann’s past unrelated felony record can be found here.