11/12/2003 1:00AM

Separate accounts at NYRA


NEW YORK - The New York Racing Association has created a separate account for horsemen after owners and trainers complained that their money was being used for the association's operating expenses.

The account was created on Nov. 1, according to representatives of New York horsemen and NYRA officials. The new account will be used to pay purses and hold claiming deposits, and it will be administered by NYRA, the officials said.

NYRA had acknowledged in a February letter to federal prosecutors that the association owed $14 million to horsemen as of Dec. 31, 2002, because it had borrowed against the account to pay operating expenses. The amount owed to horsemen has grown to an estimated $20 million since NYRA sent the letter.

"We realized in talking with horsemen that this is something that we needed to correct, and we think the horsemen have come up with a very good solution that is elegant in its simplicity," said Steven Duncker, one of NYRA's two chief operating officers.

Representatives of the New York Thoroughbred Horsemen's Association and Alan Foreman, the chairman of the National Thoroughbred Horsemen's Association, have been working with NYRA since August on resolving the claims. Foreman said that horsemen had fears that if NYRA were to go bankrupt, the trainers would be hard-pressed to recover the money if it were not in a separate account.

Horsemen and NYRA have not yet reached an agreement on how NYRA will replenish the fund, Foreman said, but negotiations are ongoing. Foreman said that NYRA does not have enough cash on hand right now to cover the entire deficit.

Duncker said that for now NYRA will cover its obligations to the fund by "continuing to put money into the account to the extent that people take it out."

Horsemen will be briefed on the workings of the new account Nov. 22 at a meeting at Aqueduct, Foreman said.

According to Foreman, money owed to horsemen was mingled with NYRA's operational funds before the account was created. NYRA was able to borrow against the fund because horsemen generally do not withdraw all their purse winnings once the purses are earned and because many typically keep some money on account to pay for claims.

NYRA stated in its letter to federal prosecutors that the money owed to horsemen would be in jeopardy if any of its officers were indicted, because the association could be forced to declare bankruptcy. The U.S. attorney for the Eastern District of New York has been considering indictments against NYRA in connection to 19 convictions of NYRA mutuel clerks over the past three years on charges of money laundering and tax fraud.

Horsemen, however, were unaware of the deficit until NYRA's letter to the U.S. attorney was made public, according to Foreman. NYRA has cooperated with the horsemen's effort to create the account since the groups voiced their concerns, Foreman said.