Lawsuit against Zayat thrown out

A federal judge has thrown out a lawsuit alleging that American Pharoah’s owner, Ahmed Zayat, reneged on a $1.65 million debt, citing the statute of limitations and the plaintiff’s difficulty in proving his allegations, according to court records.

William Martini, a judge for the U.S. District Court of New Jersey, granted a motion requested by Zayat to have the case dismissed on Thursday, according to court documents. The motion states that the action should be considered closed.

The lawsuit, filed in March 2014 by Howard Rubinsky, was made public by media outlets in the week just after American Pharoah won the Preakness Stakes. Zayat had vigorously denied the allegations in the suit, and on Thursday, he posted a message, “Victory is sweet,” on his Twitter account, referring to the judge’s decision.

“The Zayats are grateful for the court’s decision, which vindicates them and reinforces everything they have been saying,” Matthew Hiltzik, a spokesman for the family, said in a statement. “They were always confident that the truth would prevail and are very happy to have this behind them so that all racing and sports fans can focus on the exciting upcoming weekend at Belmont.”

American Pharoah is entered in Saturday’s Belmont Stakes in an attempt to win the Triple Crown.

Rubinsky alleged in the suit that he had opened a line of credit with an offshore bookmaker in 2003 and allowed Zayat to bet through the account. The suit alleged that Zayat had run up a debt of $2 million in 2005, and that he had failed to make payments on the debt beginning in 2008, when the debt had been reduced to $1.65 million.

The order by Martini states that the clock had begun ticking on the statute of limitations in 2005, when Zayat allegedly stopped making payments on the debt and Rubinsky hired an attorney to seek repayment. The statute of limitations in New Jersey for breach of contract is six years, the order states.

Martini also stated in his order that Rubinsky “has provided no evidence from which a reasonable jury could conclude that consideration existed” for an agreement between Rubinsky and Zayat on a repayment plan. The order points to an exchange of e-mails between Rubinsky and Zayat in 2008 in which Zayat “explicitly stated in his text messages that he does not owe plaintiff – or anyone – any money, but that he would be willing to help plaintiff.”

The e-mail exchange contains references to Rubinsky claiming that he was experiencing health problems. In the exchange, Zayat says he will provide checks to help Rubinsky. Zayat had acknowledged providing Rubinsky with a check for $25,000 in 2008, but he said he decided to “sever his ties” with him shortly thereafter when he “realized Mr. Rubinsky was trying to take advantage of me.”

Rubinsky pleaded guilty in 2008 to assisting two New Jersey brothers, Jeffrey and Michael Jelinsky, with operating an illegal bookmaking business. The Jelinsky brothers were linked to Zayat through the bankruptcy filing of his racing stable in 2010, which listed outstanding loans of $600,000 to the Jelinsky brothers as debt.

Based on comments made by Zayat about Rubinsky’s lawsuit being a form of extortion and fraud, Rubinsky’s attorney, Joseph Bainton, earlier this week filed a libel action against Zayat. In response, Joseph Vann, the attorney for Zayat, said the suit “has no legal merit” and predicted it would be thrown out.