Jess Jackson sues advisers for fraud

LEXINGTON, Ky. - Jess Jackson, a founder of the Kendall-Jackson Winery and a prominent buyer of expensive bloodstock at auction in the last several years, has sued some of his early advisers, alleging fraud in a number of transactions, including one in which Jackson purchased Afleet Alex's dam, Maggy Hawk, for $750,000.

Jackson's suit, filed by attorney Robert Brewer Jr. in San Diego, Calif., alleges that bloodstock agent Emmanuel de Seroux of Narvick International, trainer Bruce Headley, and bloodstock advisor Brad Martin inflated the values of horses purchased on his behalf and obtained secret commissions.

Martin, reached at a Thoroughbred auction in Pomona, Calif., declined to comment on the suit. De Seroux, contacted at Narvick's California office, also declined to comment and referred queries to Lexington, Ky., attorney Mike Meuser, who had not returned a call for comment on Tuesday as business hours ended. An attempt to reach Headley by telephone was unsuccessful.

The suit alleges that Headley and Martin "were at the time of such purchases engaged in a conspiracy to artificially increase the level of bidding on horses and inflate such prices and . . . may have received undisclosed commissions from consignors or sellers of the horses purchased by Jackson."

According to the filing, Headley and Martin introduced Jackson to de Seroux at the sale, after which Jackson hired de Seroux to be his primary representative in private bloodstock transactions. De Seroux held that position from late 2003 until earlier this year, purchasing more than 30 horses in North America and abroad for approximately $12.8 million, according to the complaint. During that time, Jackson also purchased more than 90 horses at public auction, including the $1.5 million mare Got Koko at the 2004 Keeneland November sale. From 2003 through mid-2005, Jackson spent an estimated $45 million on Thoroughbred bloodstock.

"Jackson is informed and believes that de Seroux, Headley, and Martin obtained secret commissions, payments, or profits or other things of value from consignors, sellers, or other agents in return for assuring that Jackson would purchase their horses or interests in horses at inflated prices," the suit alleges.

Among the transactions noted was one for 2005 Preakness and Belmont winner Afleet Alex's dam, Maggy Hawk, according to the suit. The complaint alleges that Jackson provided $750,000 to de Seroux to purchase the mare, though owner John Silvertand allegedly had agreed with de Seroux that the purchase price was to be $600,000 for Maggy Hawk.

Jackson's suit estimates that "in the approximately 30 transactions in which Jackson purchased horses privately, the difference between the amounts actually received by the sellers and the amounts paid by Jackson is at least $3.2 million."

It further alleges that de Seroux paid more than $700,000 to Headley and more than $200,000 to Martin for their roles in the transactions. It also accuses Martin of billing Jackson for expenses already covered by payments from Narvick.

"In each instance, funds were fraudulently obtained first from Jackson and then a portion of such funds were utilized to pay to the seller of the horse in question a lesser price and de Seroux or Narvick either kept the illegal and undisclosed profits or shared them with Headley, Martin, or others who were involved with the transactions," the suit alleges.

- additional reporting by Steve Andersen and Jay Privman