State report blasts NYRA

NEW YORK - The New York state legislature should consider eliminating the New York Racing Association's franchise to operate Belmont Park, Aqueduct racetrack, and Saratoga Race Course because of a failure to properly deal with corruption among its mutuel tellers, the state attorney general said in a report that was obtained by the New York Times.

According to the Times, the report described various acts of corruption among mutuel tellers and parking lot attendees over the past three years, including money laundering and loan sharking. Most of the practices described in the report were results of criminal investigations completed in the past three years that have already resulted in convictions.

"What's appalling about the NYRA is that repeated and overwhelming evidence of criminal conduct did not spur this management to fundamentally change its behavior," said the attorney general, Eliot Spitzer, quoted in the Times article. "It is now time to begin anew and put in place an entirely different structure to oversee racetracks in New York."

The attorney general's report was also critical of Terry Meyocks, the president of NYRA, for "injudicious" use of his expense account. The report said that Meyocks had charged $140,000 in expenses on his corporate credit card, although the article in the Times did not specify over what timeframe those expenses were run up.

The report said that Meyocks, who is paid a salary of $375,000 a year, was unable to provide receipts for more than $14,000 in dining expenses, and that he failed to properly identify members of his family who were included on the dinner checks. Some of the expenses "bear earmarks of immoderation," the report said, according to the Times.

Meyocks and Barry Schwartz, the chairman of NYRA, did not return phone calls on Saturday morning.

NYRA, a quasi-state agency that must reinvest its profits in the tracks or distribute the profit to the state, receives its license to operate racing at the three tracks from the state legislature. This year, NYRA's franchise was extended by the legislature to the end of 2013 as long as the association begins operation of slot machines by March 1, 2004.

The attorney general's report focuses on the results of several criminal investigations of NYRA's mutuel tellers, including a sting in which an undercover police officer posing as a cocaine dealer was able to launder $300,000 in small bills through NYRA's mutuel windows.

The three tellers who laundered the money pleaded guilty in April, 2002, to money laundering, conspiracy, and falsifying business records. At the time, Spitzer recommended that the three be given probation.

Later in 2002, NYRA fired 16 mutuel tellers who entered guilty pleas for tax evasion. The tellers had used a complex scheme to sometimes eliminate their entire tax liability for the year by using money borrowed from their betting boxes.

After those incidents, NYRA implemented new security measures covering their tellers, but the attorney general's report said that those measures were inadequate, according to the Times.