Updated on 09/16/2011 8:52AM

Davis pleads guilty, too

Reuters/Mike Segar
Derrick Davis (left) pleaded guilty to one count of wire fraud and computer fraud Thursday at the White Plains, N.Y., courthouse.

WHITE PLAINS, N.Y. - Derrick Davis thought he had walked away from this year's Breeders' Cup a wealthy man. Instead, 47 days after believing he was the owner of a pick six ticket worth more than $3 million, Davis walked into a federal courtroom Thursday afternoon and pleaded guilty to one count of wire fraud and computer fraud.

Davis, 29, of Baltimore, faces a maximum penalty of five years and a maximum fine of $250,000. In part because he waived his right to a jury trial, he will receive a lesser penalty. A government attorney has recommended Davis be sentenced to between 37 and 46 months in prison. Steve Allen, the attorney for Davis, said he would argue for a lighter sentence.

"I'm truly sorry and regret my involvement in this entire wrongdoing and am throwing myself on the mercy of the court," Davis said. "I take full responsibility for my acts."

Davis's guilty plea came one day after his former fraternity brother at Drexel University, Glen DaSilva, 29, of New York, pleaded guilty in the same courtroom to one charge of computer fraud and wire fraud and one count of money laundering. DaSilva, who is likely to receive a jail term ranging from 21 to 27 months is, like Davis, to be sentenced on March 11 before U.S. District Court Judge Charles L. Bryant.

On Nov. 20, Christopher Harn, a third fraternity brother at Drexel University, also pleaded guilty to the same charges as DaSilva and admitted he was the mastermind behind a year-long fraudulent wagering scheme that concluded with the manipulation of the Breeders' Cup pick six ticket.

The scheme included the cashing of counterfeit unclaimed mutuel tickets from 2001 and the rigging of pick four and pick six bets at Balmoral Park and Belmont Park in October.

Harn, 29, of Newark, Del., used his position as a senior software engineer for Autotote - the country's largest bet-processing company - to alter multiple-race bets after some of the races had been run but before the bet was electronically sent to the host track. Harn, who faces a maximum penalty of 25 years in jail and a $750,000 fine, could be looking at a sentence ranging from 75 to 80 months. The sentence is expected to be further reduced because Harn was the first of the three to admit guilt and implicated the others. Harn is scheduled for sentencing on Feb. 18.

Davis's guilty plea Thursday brought an end to the criminal phase of a wagering scandal that rocked Thoroughbred racing, prompting racing officials to review security measures in the sport's electronic betting network while at the same time trying to maintain public confidence.

Davis spelled out his role in two schemes during a 25-minute hearing Wednesday before U.S. Magistrate Judge Mark D. Fox. Davis explained how in late May of this year he was approached by Harn to cash about 100 counterfeit unclaimed winning mutuel tickets from 2001. Earlier in the year, Harn had given DaSilva a number of tickets to cash as well.

After meeting Harn at Delaware Park, where he learned how to use the self-betting machines, Davis made several trips to Philadelphia Park, where he cashed approximately $22,000 worth of tickets. Davis said he split that money evenly with Harn.

In October, Harn told Davis how he and DaSilva had made $80,000 from rigging a pick six bet at Belmont Park and asked Davis if he wanted in on future action. Davis said Harn's next target was the Breeders' Cup pick six at Arlington Park on Oct. 26.

Davis opened an account with Catskill Off-Track Betting on Oct. 18. Armed with Davis's account number, Harn was able to make and then alter the pick six ticket to include the first four winners - using only the winning horses - before the bet was electronically transferred to Arlington Park. Harn used the entire field in the last two legs to ensure his ticket would be a winning one. The ticket, made in a $12 denomination, totaled $1,152.

After 43-1 shot Volponi won the Breeders' Cup Classic, the only winning pick six tickets were credited to Davis's Catskill OTB account. Because the pick six is a $2 bet, it was announced that there were six winning tickets - all belonging to Davis - returning $428,392 each. Davis also had 108 consolation tickets (5 of 6), each worth $4,606, bringing the total windfall to $3,067,800.

Allen said that Davis would relinquish any rights he has to the $3 million, adding that the government could instruct Arlington Park to redistribute the money "to those who truly have a right to it, who are the people that picked five out of six. With a little luck, they'll get it before Dec. 25."

The Illinois Racing Board froze payment of the money. According to executive director Walter Dudycz, the board must meet to decide how to redistribute that money. One way is to simply pay off to the people who legitimately had 5 of 6, resulting in an additional $39,330 payment ot them. There is a record of those winners because they had to fill out tax forms to collect their original $4,606.

The next meeting of the Illinois Racing Board is not scheduled until mid-January, though Dudycz said an emergency meeting could be held sooner.