Horse racing industry hires Giuliani as investigator

NEW YORK _ The computer programmer who says he helped two of his former Drexel University fraternity brothers rig bets, including a $3 million Breeder’s Cup wager, pleaded guilty Wednesday to federal charges of wire and computer fraud and money laundering.

In his plea, Chris Harn of Newark, Del., implicated Derrick Davis of Baltimore and Glen DaSilva of New York in that and another related scheme. He faces up to 25 years in prison.

At almost the same time that Harn was entering his plea, the badly shaken horse racing industry announced that it was hiring former New York mayor Rudolph W. Giuliani to examine big wagers of recent years for evidence of more fraud and suggest ways to improve security.

The National Thoroughbred Racing Association said Giuliani, a former federal prosecutor and horse racing fan, would bring “tough-minded independence” to the probe in an effort to reassure bettors that the game is honest.

“This is a business, an industry, a sport that requires the highest level of security,” Giuliani said. “You need to be able to say to people making wagers on horse races that they are getting fair treatment.”

Giuliani said the probe could take six months to a year and involve research into recent big-payoff wagers and a random selection of others. Giuliani gives the investigation star power, but most of the real analysis will be done by the accounting and consulting firm Ernst & Young.

Tim Smith, commissioner of the racing association, said that he did not think wagering levels had fallen off since the bet-rigging involving the three friends was revealed late last month.Smith and Giuliani agreed that if the three frat brothers had not gone for such a large payout with a relatively outlandish betting method, they might never have gotten caught.

“It’s an example of exceeding `the pig factor.’ Somebody goes too far and it becomes obvious,” Giuliani said.

Indeed, Harn revealed in court a scheme with the same cast of characters that netted $100,000. There, they created counterfeit copies of winning but uncashed tickets from a series of races and then cashed them.

For the Breeder’s Cup, it may well turn out to be a case of having reached too far.

Harn was a programmer for Autotote, one of three major firms handling millions in bets from off-track bettors. On Oct. 26, Davis phoned in six $2 bets on the Breeder’s Cup in the form of a Pick 6, in which the bettor has to pick the winner of six consecutive races.

Davis picked only one horse to win in the first four races, then picked every horse with other tickets in the two remaining races.

Harn admitted Wednesday, that what actually happened was that he used his access to Autotote’s computers to make it appear that Davis had bet on the first four races before they were run, instead of afterward.

Because Davis bet on the same horse to win on each ticket of the first four races instead of on a variety of horses, and increasing his chances of winning, racing officials were immediately suspicious and did not make the payout. “It stuck out like a sore thumb,” said Smith, of the National Thoroughbred Racing Association.

Outside the courtroom, Harn’s lawyer, Daniel Conti, said Harn “has accepted fully the responsibility for the crimes he has committed. He has asked me to express his deepest apologies to everyone who’s been affected adversely.”

Lawyers for the co-defendants were unmoved.

DaSilva’a attorney, Ed Hayes, said Harn was the mastermind and getting him to implicate the others “is like getting John Gotti to testify against a busboy who’s skimming tips.” Hayes added, however, that he had discussions with prosecutors about a possible guilty plea for his client.

Steven Allen, the attorney for Davis, wouldn’t comment on Harn’s plea.

Smith said that Giuliani’s investigation would be “wide-open.” He added that “we’re not aware of any specific instance” of suspicious bets in the past.

Smith and Giuliani would not say exactly what characteristics they would be looking for in their review of past bets. They also said that all their findings would be made public, except for any information passed along to law enforcement that needed to be kept secret for criminal prosecution.