05/18/2010 11:00PM

Bank asks access to Zayat personal accounts

Email

LEXINGTON, Ky. - In court filings in a New Jersey bankruptcy court on Wednesday, attorneys for Fifth Third Bank say they need access to prominent racehorse owner Ahmed Zayat's personal financial accounts because he has used his bankrupt Zayat Stables' corporate assets, including Fifth Third's cash collateral, "for personal and other non-business-related uses." The bank, which has sued Zayat for allegedly defaulting on $34 million in loans, claims Zayat used stable assets to make loans to family and friends and to pay Internet gambling accounts.

The bank contends that makes Zayat's personal bank records relevant to the bank's discovery process.

The bank also argues that Zayat's creditors should have access to any proceeds from those asset outlays, such as gambling winnings or any repaid loans from Zayat family friends, including now-convicted illegal bookmakers Jeffrey and Michael Jelinsky. Fifth Third's most recent court documents include a copy of a $50,000 check from Zayat Stables to retain legal counsel for an M. and B. Jelinsky.

Zayat has said that he loaned members of the Jelinsky family more than $600,000 because they were friends going through difficult times and that he was unaware of their illegal bookmaking activities. According to court documents, Zayat made the loans in 2006 and 2007. The Jelinsky brothers were convicted in 2009. Several racing jurisdictions have investigated the connection and cleared Zayat of wrongdoing.

In the May 18 filing, Fifth Third maintains Zayat continued to use Zayat Stables assets to make loans to relatives and family friends during 2009. "In addition," the filing states, "records show that Mr. Zayat has used Zayat Stables' cash to pay Mr. Zayat's credit card bills, to fund what are, upon information and belief, personal internet gambling accounts, and to pay for non-residential lodging for his family members in Florida."

In addition to the loans, Fifth Third alleges, "the Debtor's records identify transfers that Zayat Stables made to accounts that appear to be related to Mr. Zayat's gambling hobby." The bank lists a $100,000 wire transfer to Nhplay.com, described as an Internet gambling site, and "many tens of thousands of dollars transferred from Zayat Stables to New Jersey Account Wagering" for Zayat's personal account.

Fifth Third's filing was in response to Zayat's contention that his personal financial records are "far afield from the financial condition or financial affairs of Zayat Stables." Zayat's attorneys plan to file a motion later this month that would partially quash a subpoena for those records.

Zayat could not be reached for comment.