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Tax scam & money laundering

Saratoga Springs -- NYRA clerks admit to borrowing money from cash drawers and writing off those amounts on IRS returns

By DENNIS YUSKO, Staff writer
First published: Wednesday, June 26, 2002

Sixteen parimutuel tellers and dealers have pleaded guilty to tax violations as part of a continuing federal investigation into corruption at New York Racing Association thoroughbred racetracks, according to documents unsealed Tuesday.

The parimutuel department employees admitted that for several years they took cash from NYRA drawers for their personal use, reimbursed NYRA for the cash and then falsely reported on their annual federal tax returns that they incurred employee expenses equal to the cash amount they took, the Justice Department said.

On Tuesday, NYRA issued a statement saying it was cooperating fully with the investigation and that new procedures implemented since first learning of problems several years ago have resulted in tighter financial controls at their tracks.

"The integrity of racing and NYRA's integrity as an institution are the primary concern of NYRA's management and board,'' NYRA Chairman and CEO Barry K. Schwartz said in the statement.

NYRA is a nonprofit organization that has the franchise to operate the state's three largest thoroughbred racetracks.

At least one teller had been filing false income returns since 1979, according to prosecutors.

The announcement Tuesday follows separate state charges against three NYRA parimutuel tellers accused of money laundering, conspiracy and falsifying business records at Saratoga Race Course, Aqueduct Race Track and Belmont Park.

"What they would do is file for unreimbursed business expenses and that would generate a refund to them they weren't entitled to because they were false deductions,'' said Kevin McKeon, a spokesman for the Internal Revenue Service, which is conducting the ongoing investigation.

In July 2001, just days before the opening of the 2001 Saratoga meet, four NYRA parimutuel tellers were indicted by the state on money-laundering charges after exchanging money with undercover agents posing as cocaine dealers and taking a 5 percent to 10 percent cut for themselves.

Submitted by: Werner Hetzner 

Source: (excerpt) Albany Times Union




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