06/12/2003 11:00PM

Counterfeit dog ticket linked to tote employee

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NEW YORK - Florida racing regulators are investigating an incident in which an employee of United Tote cashed a counterfeit of an unclaimed parimutuel ticket on a greyhound race in Florida last March, officials of the Florida Division of Parimutuel Wagering said Friday.

The investigation of the counterfeit ticket comes just seven months after Thoroughbred racing was rocked by the Breeders' Cup pick six scandal, which was also the work of a totalizator company employee and included a counterfeit ticket scheme. The Florida incident is raising new concerns about the security of the sophisticated electronic betting network that processed $15 billion in Thoroughbred wagers last year.

Dave Roberts, the director of the Florida Division of Parimutuel Wagering, confirmed on Friday that the division launched an investigation on April 30 but he declined to provide details. He said the division had no timetable for completing its work.

"Anything we complete, if we find out there's anything that can be construed as a crime, we will forward it to the state attorney general's office," Roberts said.

United Tote's chief operating officer, Jeff Murphy, declined to comment and referred calls to the company's attorney, Greg Cline, who did not return a phone call on Friday.

United Tote is one of three major bet-processing companies in the U.S. The company's top clients include Churchill Downs, Keeneland Race Course, and several of the parimutuel facilities in Florida, including dog tracks and jai alai frontons.

According to several racing officials, the United Tote employee at the center of the scheme allegedly entered the computer system at United Tote's Florida wagering hub at Pompano Park, retrieved information about an uncashed ticket on a dog race, created a counterfeit ticket, and then cashed the ticket at Daytona Beach Kennel Club, 250 miles north of Miami on Florida's east coast.

United Tote was alerted to the scheme when the original owner of the ticket tried to cash the unclaimed ticket, according to the officials.

It was unclear Friday if the United Tote employee had been fired, or if the employee had attempted to cash other counterfeit tickets in the past.

In the Breeders' Cup pick six scandal, Chris Harn, a former senior programmer of Autotote, along with two former college friends, altered pick six and pick four tickets while also producing and cashing more than $110,000 in counterfeits of unredeemed tickets. The three were sentenced to prison terms ranging from one to three years in March.

Since the scandal came to light, the racing industry has committed significant resources towards restoring confidence in parimutuel wagering.

In November, the National Thoroughbred Racing Association hired a consulting firm headed by former New York City Major Rudolph Guiliani to make recommendations on how to upgrade the sport's bet-processing systems and install proper security controls, at a reported cost of $1 million.

To work with the company, the NTRA created a task force to analyze betting security. Neither Guiliani's firm nor the task force has completed its work, but preliminary statements from both groups - which have focused on a review of pick six and pick four bets, considered the most vulnerable to security gaps - have said that the reviews have not turned up any other instances of altered tickets.

The NTRA has also hired a security-consulting arm of Ernst and Young to conduct an audit of tote security procedures. Ernst and Young has been working closely with tote companies since beginning the audit, which was initially delayed because tote companies were reluctant to allow the auditors to examine their security procedures. Tote companies consider the procedures proprietary information.

A member of the NTRA's task force, Ken Kirchner, said on Friday that the Florida incident had not been communicated to anyone on the task force, despite the fact that United Tote has been involved in the discussions since the task force was launched.

"Frankly, I'll be disappointed if this has in fact happened," Kirchner said. "And even more so, I'll be disappointed that no one at United Tote has told any of us that this has in fact happened."

The Florida incident is at least the third in the last four years that a tote employee has attempted to cash counterfeit tickets. In addition to Harn, Autotote fired an employee in 1999 for attempting to redeem counterfeits of uncashed tickets.