New York Revokes Licenses in Money Laundering Case

New York regulators on Friday revoked the licenses of the former New York Racing Association pari-mutual clerks who last year pled guilty to various charges stemming from a money-laundering probe at NYRA's three racetracks.

A number of the former tellers, who already lost their jobs with NYRA, had nonetheless sought to keep their state licenses with the Racing and Wagering Board, officials said. With guilty pleas ranging from money laundering to tax evasion, the bid by the former NYRA workers to hold onto their licenses was rejected out of hand by regulators.

"They were not fit to be licensed," said racing board chairman Michael Hoblock.

The scandal rocked NYRA, as evidence surfaced that longtime employees were suspected of involvement in complex money-laundering schemes that investigators believed may have had organized crime ties.

The racing board in the spring of 2000 uncovered various financial irregularities at NYRA that was turned over to New York Attorney General Eliot Spitzer to investigate. His probe led to guilty pleas by three men -- Peter Oster, Joseph Rabito and Robert Lodati -- who claimed to undercover State Police agents posing as drug dealers that they could launder huge sums of money. Officials believe the men had been involved in real money laundering for years at Aqueduct, Belmont and Saratoga tracks.

On Friday, Oster and Lodati had their state racing board licenses revoked. Rabito's license had already expired.

The board also revoked the licenses of other 11 other former NYRA employees who lost their jobs in the aftermath of the original scandal. Those individuals pled guilty to federal tax evasion charges. The board stripped the licenses of Charles Bonanno, Carl Bragg, Joseph Dimaio, Daniel Dlugosz, Charles Donnelly, Thomas Gangi, Philip Gordon, Ellen Greico, Gary Klis, David Lee and Robert Mecca. They had all been employed as tellers or dealers at the three NYRA tracks.

In details released last summer against three of the individuals, federal prosecutors said the former NYRA workers took money from the track betting operation and then reported being "short" to NYRA. They then returned that amount back to NYRA, but then reported the expenses as unreimbursed employee expenses on federal tax returns, fraudulently reducing their tax liabilities.