Updated on 09/17/2011 11:32AM

Meyocks out as part of NYRA shake-up

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Terry Meyocks, the embattled chief operating officer of the New York Racing Association, resigned on Monday as part of a sweeping management reorganization. The question now is whether it will be enough to satisfy federal and state officials who have been critical of the association's financial management, particularly its cash-handling practices in the mutuel room.

The resignation, announced on Monday night, is by far the biggest step by NYRA in response to harsh criticism by New York's attorney general, the New York State comptroller, and federal prosecutors.

Meyocks, 52, said he made the decision after consulting with his wife and family over the weekend. "I'm true blue to New York racing, NYRA, and the horsemen, and if this can help New York racing, then I was prepared to do what I did," Meyocks said in a phone interview Tuesday.

Meyocks said that he has agreed to stay on at NYRA until the reorganization is complete, which could take two or three months, NYRA officials said.

Barry Schwartz, the chairman of NYRA, said Tuesday that he "deeply regretted" accepting the resignation, but he declined to comment further, directing inquiries to a statement that NYRA issued on Monday about the reorganization.

Two NYRA board members who have backgrounds on Wall Street will replace Meyocks on interim basis. Peter Karches, a former president of Morgan Stanley, and Stephen Duncker, a former managing director of Goldman Sachs, will serve as unpaid co-chief operating officers until "the necessary skill set and ideal qualifications of a new president and COO can be assessed, and an appropriate candidate identified and hired," a statement from NYRA said.

As part of the reorganization, NYRA has hired a new chief financial officer, William J. Byrne, a former vice president of finance for the Industrial Products Group of Itochu International Inc. The position had been vacant since Alec Ingle left NYRA in August last year.

NYRA is conducting searches for a director of security and a director of internal audits. In addition, the association's current general counsel, Patrick Kehoe, will take on new responsibilities for overseeing how NYRA complies with regulations and oversight.

Meyocks, who earns a salary of $375,000, has been the association's chief operating officer since 1996 and a NYRA employee since 1993. Since early last summer, he became a target of regulators and prosecutors who said that NYRA was unresponsive to allegations of mismanagement.

In June, Eliot Spitzer, New York's attorney general, called for Meyocks's removal as a consequence of 19 convictions of mutuel tellers in the past three years for income-tax evasion and money laundering. Spitzer characterized the convictions as proof of NYRA's lax oversight of its employees. NYRA, a highly regulated not-for-profit company, operates Aqueduct, Belmont, and Saratoga on a franchise by the state that is due to expire in 2007.

Despite the criticisms, NYRA board members staunchly supported Meyocks until the political pressure and mounting public scrutiny began to wear heavily on the association's image and ability to conduct business.

The NYRA board met at Belmont Park last week to work out final details of the reorganization plan. After the meeting, top NYRA officials conferred with representatives from the state attorney general's office, board members said. Last week, it appeared as if the meeting involved federal prosecutors, but no federal officials were involved, board members said Tuesday.

Before they met last week, board members said their reorganization plan would allow Meyocks to stay on at NYRA as head of the racing department. Tuesday, Meyocks declined to discuss whether NYRA had offered him a different position. "I don't want to get into that," Meyocks said. "This was my decision."

It is still unclear how the reorganization will influence federal prosecutors for the Eastern District of New York. That office has been considering an indictment of top NYRA officials related to the mutuel teller convictions, according to reports. Officials for the Eastern District have declined to comment.

A NYRA board member who spoke on the condition of anonymity said that prosecutors had not responded to the reorganization plan as of Tuesday.

Spitzer, in a statement issued through his spokesman, Paul Larabee, said that the reorganization was welcome news but that the association needs to follow through on its promises.

"The reorganization, coupled with the increase in oversight at NYRA, are positive first steps," Spitzer said. "However, the process for reform is not complete and there is work that needs to be done. The attorney general wants to see a sustained commitment to accountability."