Reports: NYRA Indictment Imminent; Franchise Safe

The New York Times and Newsday reported an indictment of the New York Racing Association on conspiracy, tax evasion, and fraud charges is expected, possibly as soon as Dec. 5. In an unusual deal, NYRA would be allowed to keep its franchise to operate Aqueduct, Belmont Park, and Saratoga, according to the reports.

Meanwhile, William Muller, a spokesman for the U.S. Attorney's office in Brooklyn, which is leading the NYRA probe, said he knew of no announcements forthcoming from his office Dec. 5.

The deal would include no trial for NYRA in return for various agreements to reform its operations. Newsday reported several NYRA managers would be indicted and have to stand trial, while the Times said some former NYRA officials would be indicted. Sources told the paper NYRA would pay millions of dollars in fines and an undisclosed number of board members would resign, though no charges against board members are likely.

The reports said prosecutors are looking at what's called a "deferred prosecution," which would permit the entity to keep its franchise if no further crimes are committed. The Times said the indictment would charge that NYRA ignored various crimes committed by clerks as a means to facilitate negotiations for a union contract.

On Dec. 4, NYRA's longtime ally in the state legislature said he believes NYRA will remain in existence after federal prosecutors wrap up their wide-ranging investigation.

With speculation running rampant that a decision about the NYRA probe is due any day from the U.S. Attorney's office, Senate Majority Leader Joseph Bruno said he has no inside information on the investigation but believes "NYRA will continue to function." Bruno said he believes whatever course of action prosecutors take "will allow that to take place."

Having NYRA continue to hold its franchise to operate the three tracks is "certainly a good thing," Bruno said. The legislator, who has pushed through numerous laws favorable to NYRA over the years, has Saratoga in his Senate district.

Bruno said the "continuity" of having NYRA remain in existence is important, especially for a state that is relying on tens of millions of dollars in annual revenue-sharing from the stalled video lottery terminal operations at Aqueduct. NYRA's partner in the VLT program, MGM Mirage, has put a halt on the VLT work until the racing entity's legal problems are resolved.

NYRA has been under investigation by state and federal prosecutors for several years. Numerous instances of financial wrongdoing and criminal behavior by employees has emerged from the probes.

Various racing insiders have predicted NYRA's demise if it is indicted as a corporation by the U.S. Attorney's office in Brooklyn. State officials have been investigating possible takeover ideas if NYRA is indicted.

Bruno, in a news conference in the state capital, praised NYRA chairman Barry Schwartz for facilitating reforms at NYRA. "I think they have been very proactive...in improving their affairs," Bruno said of Schwartz and the NYRA leadership.