02/22/2006 12:00AM

Kentucky House passes fraud bill

Email

LEXINGTON, Ky. - Legislation that supporters hope will curtail fraud in horse sales passed Kentucky's House of Representatives in an 84-14 vote on Tuesday.

The bill, HB 446, would require bloodstock agents who represent both the buyer and the seller in a transaction - a practice known as dual agency - to disclose that fact to both clients and obtain written consent from them. It also would prohibit undisclosed commissions to an agent, require a written bill of sale in transactions, and allow victims of fraud to receive triple the damages in addition to costs and attorneys fees.

Rep. Denver Butler (D-Louisville) sponsored the bill, which was heavily supported by prominent California-based Thoroughbred buyer Jess Jackson. Jackson flew in to Kentucky earlier this month to lobby Kentucky legislators to support the bill, which he has said offers protection both to buyers and to consignors who are hit up for kickback payments.

Before passing the bill, the House added two amendments. One proposed by Butler allows agents to receive fees, a gratuity, or compensation of up to $500. Another amendment proposed by Rep. Mike Denham (D-Maysville) exempts transactions of $10,000 or less for show horses.

Jackson finds the show-horse amendment troubling, said his attorney, Richard Getty.

"Mr. Jackson and other proponents of HB 446 were very much against any exception or amendment such as the amendment involving show horses of $10,000 or less," Getty said. "The main thrust of this legislation is to protect people in the horse business across the board, particularly small farm owners. This opens the door for the kind of practices we're trying to stamp out. We hope that the senate, when it reviews this legislation, will straighten things out."

The bill covers transactions involving racehorses, prospective racehorses, stallions, or broodmares, as well as interests or shares in such horses.

Thomas, Lakin reducing partnership

Becky Thomas and Lewis Lakin, co-breeders of Grade 1 winner Behaving Badly and one of the most successful pinhooking teams of the last decade under the Lakland banner, are reducing their joint holdings, Thomas confirmed Wednesday.

The partnership operated three farms in Kentucky, Florida, and New York, and at its peak owned as many as 160 or 170 broodmares, Thomas said.

The reduction, first reported in The Blood-Horse, will take place over several years, Thomas said. It began in November, when Thomas and Lakin sold a number of their mares, but the Lakland partnership still has about 120 mares left. These gradually will be sold or will move out of production as they age.

Thomas and Lakin currently are finalizing a land trade, in which Lakin will take the Lakland Kentucky farm covering about 250 acres in Versailles, Ky., and Thomas will keep the farm near Ocala, Fla.

"Everything in Florida will be mine, but Mr. Lakin still maintains the interests he has in the stallions there," Thomas said, adding that Lakin intends to lease Lakland's Kentucky property to its manager, M. Lyn Burleson, who will operate a boarding operation there under the name Burleson Farm.

The pair will continue to operate Lakland North farm near Hudson, N.Y., together for the time being.

Lakin, 72, told The Blood-Horse that the reduction was part of his estate planning.

"My interest is not in expansion, but to cash in on what we've done, which is significant," he said.

Thomas, who also owns the Sequel Bloodstock yearling-to-juvenile and broodmare pinhooking business, said she will continue operating much as usual.

"I've always been the majority partner in the pinhooking venture, and I'll continue that as I've always done," she said. "I'll continue breeding and pinhooking myself."

Thomas, 48, already was a leading yearling-to-juvenile pinhooker through her Sequel agency when Lakin joined forces with her about 10 years ago. The two continued selling at 2-year-old sales with great success, but also extended their reach into the broodmare market when they purchased Lakland's Kentucky property in 1998. Together, Thomas and Lakin sold $2 million Morocco in 1999 and $2.7 million Diamond Fury in 2003 to set juvenile auction price records. In 2003, Sequel Bloodstock agency, with the Thomas-Lakin partnership as a key source of horses, led all juvenile consignors with gross sales of $8,751,000 for 44 horses sold. Thomas and Lakin were among the top 15 breeding partnerships in North America last year by purse earnings. Their runners won more than $2.9 million in 2005.