While Ernie Paragallo awaits his next day in court regarding the 22 counts of animal cruelty he faces for horses he housed at his upstate New York farm, his family-run Paraneck Stable is in the process of dispersing its racing stock.\nMost of the horses that Paraneck Stable has had based at Aqueduct have been sold to other parties, according to Paragallo, who was licensed as the authorized agent for his daughters Jennifer and Kristen Paragallo. One of those horses, Living Out a Dream, finished third in a $15,000 claiming race Thursday at Belmont Park. According to New York State Racing and Wagering Board officials, Living Out a Dream was one of five horses Paraneck sold to Joe Sgro's Fever Racing Stables for a total of $55,000. Those horses are trained by Joe DeMola, who also trained for Paraneck.\n"We're vetting the sale of every horse that is coming out of that barn," said Joe Mahoney, a spokesman for the board.\nMahoney said two other horses involved in the sale to Fever Racing - Parky and Ocala Jorge - were scratched out of races here on May 16 because, at that time, there was insufficient proof that money had exchanged hands.\nParagallo had to surrender his authorized agent's license in April after he was arraigned on 22 counts of animal cruelty after it was discovered that 177 horses on his Center Brook Farm in Climax, N.Y., were being neglected. Both the New York Racing Association and the racing and wagering board prohibited Paraneck from running its horses in New York until a new authorized agent was approved. While NYRA did approve that person - attorney Robert Savitsky - as well as a new stable name (Nob Hill), the state did not approve Savitsky and claims that Nob Hill was never submitted as a new stable name.\nThe licenses of Kristen and Jennifer Paragallo are "under review," according to Mahoney.\nParagallo said Thursday that the family decided to disperse its horses after it became obvious the state would not let the stable run horses.\n"They weren't letting my daughter run the horses," Paragallo said. "My daughters will follow the proper legal channels."\nAsked if that meant suing the racing and wagering board, Paragallo said, "Definitely."\nThe stable's top horse, the graded-stakes-winning sprinter True Quality, has not been sold, according to the stable's former trainer John Campo Jr.\nCampo confirmed that he left Paragallo's employ two weeks ago and he is attempting to open a public stable. He currently has four horses for clients that he was allowed to keep while he trained privately for Paraneck. Campo had won 15 races for Paraneck since September, including the Grade 2 General George with True Quality.\nMeanwhile, Paragallo is due to appear in Coxsackie Town Court on June 22 in regard to the animal cruelty charges. He faces one year in jail and a $1,000 fine for each charge.