01/19/2009 1:00AM

Shapiro near return to racing industry

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ARCADIA, Calif. - Richard Shapiro, who resigned last month as chairman of the California Horse Racing Board, may soon be coming back to work in the sport, which would culminate a tumultuous month during which Shapiro also lost millions of dollars as one of the many victims of the alleged fraud perpetrated by former Nasdaq chairman Bernard Madoff.

Shapiro has said he believes California racing needs better financial terms with state government, and his return to the sport, sources have said, is designed to give him the opportunity to seek that change. Shapiro on Monday acknowledged that something was imminent, but politely declined to elaborate.

"No other sport is taxed like racing," Shapiro said from his office in Calabasas, Calif.

The Madoff scandal broke Dec. 11, and Shapiro resigned from the racing board four days later. On Monday, Shapiro said there was no cause-and-effect relationship between the two, though he admitted he "lost many millions" in the Madoff scandal.

"Was it a shock and did it impact me? Absolutely," Shapiro said. "This has been a horrible and difficult time. But I had decided in early December, long before this, to step off the board. My announcement was not a surprise to a few people I had told earlier in the year, long before Madoff.

"I came to the realization that I could help and improve the sport as an advocate getting restrictions removed by government. I couldn't do any more as a regulator. The racing board can enforce laws and create regulations, but more needs to be done. I didn't want to merely deal once a month with toe grabs, coupling and uncoupling of entries, fining people $1,000 for not declaring first-time geldings."

News of Shapiro's connection to the Madoff scandal broke because a personal letter he sent on Jan. 12 to California Congressman Brad Sherman ended up being widely distributed in racing circles. Shapiro said he was investigating how the letter ended up outside a small group of those similarly impacted by Madoff that he tried to assist.

In Shapiro's letter to Sherman, Shapiro said the Madoff situation left him "in desperate financial straits."

"If you understood the extent of the fraud, it would blow your mind," Shapiro said Monday. "Since 2004, I got statements of every trade supposedly made in my account. I got monthly statements listing every trade, and if I wasn't in stocks, it showed what I had in U.S. treasuries. All of that was phony. It turned out he never traded a share of stock. This is on a scale of something never before seen."