OZONE PARK, N.Y. - One day after state officials took possession of 177 horses belonging to agent/breeder Ernie Paragallo because of neglect and possible animal abuse, the New York Racing Association on Thursday notified Paragallo that it has revoked his racing credentials and will not allow his family-owned Paraneck Stable to run horses here until he is replaced as the authorized agent.\nThe five horses Paraneck had entered for cards at Aqueduct Friday through next Wednesday will be scratched. A Paraneck horse was scratched on Thursday because foal papers were not present with the horse. Two Paraneck horses were scratched Wednesday by the state veterinarian, according to the stewards.\nParagallo, 51, is licensed by the state as an authorized agent for Paraneck Stable, whose proprietors are Paragallo's daughters, Jennifer, 26, and Kristen, 25. Paragallo's daughters will have to submit the name of a new agent to NYRA, which then must approve that person.\n"We're saying we want to see somebody who is not a blood relative, somebody who is not a current employee running the affairs of that stable," said Hal Handel, NYRA's executive vice president and chief operating officer.\nParagallo said his daughter Jennifer is out of the country and is not due home until next week. Paragallo also said he would surrender his authorized agent's license to the state on April 16.\nHandel said he did not consider banning Paraneck and the 40 horses it has stabled at Aqueduct from the grounds.\n"The horses are here, the horses are racing-fit," Handel said. "If the horses are going to leave here and go back to that farm, we don't think that would be a terribly happy outcome. We feel it's a more prudent and safer course of action to have them under the control of a non-biased third party than to have them ship back to that farm in the midst of everything that's gone up there."\nOn Wednesday, state police, representatives of the New York State Racing and Wagering Board, veterinarians representing the American Society for the Prevention of Cruelty to Animals, and officials of the Columbia-Greene Humane Society executed a search warrant on Paragallo's Center Brook Farm in Climax, N.Y. The ASPCA determined that the horses stabled there "showed varying stages of malnutrition" and the state took possession of the horses.\n"It's a disaster," said Handel, who said he had two conversations with an official from the ASPCA.\nAccording to Handel, Ron Perez, president of the Columbia-Greene Humane Society - which is overseeing the care of these horses - said a young stallion on the farm died on Thursday.\nParagallo was scheduled to meet with the state police officer in charge of the investigation into possible animal abuse on Friday morning. Paragallo said that he will pay for the food, hay, and straw that the horses need.\n"I have to pay for it, they're still my horses," Paragallo said.\nOn Thursday, NYRA said it would overnight a $20,000 check to the Columbia-Greene Humane Society in Hudson, N.Y. Perez said NYRA's money will "be insurance for us if we have to take over more of the feeding" of the horses.\nParagallo said he has had discussions with the state police about trying to find proper homes for as many as 60 horses. He also wants to put some horses up for adoption.\n"My kids will put somebody else in charge [of the stable]," Paragallo said. "I'm going to dedicate myself right now to righting that situation on the farm. That's my goal right now."