03/09/2010 1:00AM

Zayat cleared to race in California

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Ahmed Zayat, the owner of Zayat Stables and leading Kentucky Derby contender Eskendereya, has been cleared to race in California after questions were raised about Zayat's possible associations with bookmakers, but probes are continuing in both Kentucky and New York, according to racing regulators in the states.

Kirk Breed, the executive director of the California Horse Racing Board, said in a statement Friday that the board did not have sufficient evidence to revoke Zayat's racing license based on a preliminary investigation into the associations.

The questions about the associations were raised after Zayat listed loans he made to Michael and Jeffrey Jelinksy on papers he filed in bankruptcy court. The Jelinsky brothers pleaded guilty to felony charges of illegal bookmaking in early 2009.

The court papers said that Zayat loaned $155,000 to Michael Jelinksy in November 2006 and loaned $455,000 to Jeffrey Jelinksy in September 2007. The brothers did not repay the loans. In addition, the court papers listed two smaller loans to members of the Jelinksy family in late 2007 and early 2008.

Zayat has said that he loaned the money to the family members because they were struggling financially. He said that he believed that Michael and Jeffrey Jelinsky were gambling on horses professionally in Las Vegas when he made the loans, and he has disputed that he knew the brothers were operating a bookmaking business.

In his statement, Breed said that CHRB investigators had determined that Zayat made the loans prior to the convictions. "Therefore, we can't see any reason to pull the license of Mr. Zayat," Breed said. "As more information becomes available, we will certainly look into it."

In Kentucky and New York, however, racing regulators said on Tuesday that their investigations into the matter were ongoing.

Joe Mahoney, a spokesman for the New York State Racing and Wagering Board, said that New York's rule prohibits racing licensees from associating with any bookmakers, regardless of whether the bookmakers have been convicted.

"The assertion that the person made the loans prior to the bookmaker being convicted does not obviate the need to conduct a thorough and complete review," Mahoney said.

Lisa Underwood, the executive director of the Kentucky Horse Racing Commission, said that investigators for the commission have talked to various state and federal authorities and have conducted an interview with Zayat's attorney.

"We are still gathering information, so the inquiry remains open," Underwood said. She also said that the California determination would not have a bearing on Kentucky's investigation because of different standards in state rules on the associations of licensees.