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Pick-Six Figure Pleads Guilty

Computer programmer may testify against co-defendants in the Breeders' Cup scandal. He also reveals a second plot.

November 21, 2002|John J. Goldman | Times Staff Writer

NEW YORK — A computer programmer who helped create more than $3 million in bogus winnings at this year's Breeders' Cup pleaded guilty Wednesday to fraud and money-laundering charges, and revealed a second plot involving counterfeit tickets at five other racetracks.

Christopher Harn, 29, implicated two of his college fraternity brothers, who have also been charged in the Breeders' Cup scheme. Harn was employed as a senior programmer at Autotote Systems Inc., which processes many of the bets placed on horse races in North America.

His confession in federal court raised the possibility that he was preparing to testify against co-defendants Derrick Davis and Glen DaSilva, who are also 29.

U.S. Magistrate Judge Lisa Margaret Smith announced in court that prosecutors had reached an "understanding" with Harn that would result in a sentence lighter than the maximum of 25 years and $750,000 in fines. The terms were not disclosed, but such agreements frequently are a prelude to a defendant becoming a prosecution witness.

Outside court in White Plains, N.Y., Edward Hayes, a lawyer for DaSilva, attacked the plea agreement. "This is like making a deal with an ax murderer to testify against the ax," he said.

The defense lawyer said discussions also took place with prosecutors about DaSilva entering a guilty plea and testifying, but that DaSilva had declined.

Harn had no comment after his 40-minute court appearance. But his lawyer, Daniel Conti, said his client "has accepted fully the responsibility for the crimes he has committed."

Almost simultaneously in Manhattan, a coalition of racing associations announced it had hired former mayor Rudolph W. Giuliani to oversee a "systematic examination of certain kinds of wagers made over the course of the last year" and to strengthen computer security.

Tim Smith, commissioner of the National Thoroughbred Racing Assn., said at a news conference with Giuliani that he was not aware of other betting frauds in addition to those revealed.

But he warned: "Last month's incident involving the Breeders' Cup pick six was a loud wake-up call for our entire industry."

Said Giuliani: "This is going to be a wide-open investigation. We will apply very high standards to try to come up with a system that is as foolproof as it can be and as state of the art as it can be."

The former mayor estimated it could take up to a year to examine betting records to determine whether any other crimes occurred and "to devise a system that builds in the highest level of security that is possible."

The alleged conspiracy at the Breeders' Cup has been called one of the biggest frauds in racing history. Prosecutors say the defendants manipulated computers to create winning pick-six tickets after the first four races were finished.

Pick-six winners correctly select the horse that finishes first in six consecutive races.

The payoff can be enormous. In the Breeders' Cup, held Oct. 26 at Arlington Park outside Chicago, the bogus bets paid $3,067,821 -- money that has been withheld.

Court papers made public Wednesday charged that the three former Drexel University fraternity brothers also participated in a scheme to cash in bogus winning tickets at other tracks.

Prosecutors charged that Harn worked after hours to print thousands of the winning tickets. While no specific figure was given for this scheme, the documents charged that the counterfeit duplicates created by Harn "varied in amounts ranging between several hundred dollars and several thousand dollars."

Harn admitted providing tens of thousands of dollars' worth of bogus tickets to Davis and DaSilva, alleging that they cashed some of them at Aqueduct and Belmont Park in New York, Monmouth Park and the Meadowlands in New Jersey, and Philadelphia Park in Pennsylvania.

"After redeeming the duplicate winning tickets, Davis and DaSilva divided the cash proceeds of those tickets with Harn," court papers alleged.

In an interview with The Times, Hayes portrayed Harn as the "ringleader" of the plots.

"Whatever happened, it happened because Harn made it happen," Hayes charged. At the same time, he revealed some details of DaSilva's discussions with prosecutors.

"I went to Harn's lawyer. I said, 'Look, they've offered my guy a chance to testify.' But my guy doesn't want to," the lawyer said.

The lawyer said that DaSilva's decision to refuse the prosecutor's offer was motivated by the three men's 10-year friendship, and the fact that Harn has a 2-year-old daughter. Hayes said bitterly that his client was surprised when Harn entered his plea.

"They gave him a hell of a deal," the lawyer added. "Maybe he has some special knowledge or he knows of other people who were involved. I don't know."

James B. Comey, U.S. attorney for the Southern District of New York, labeled Harn's confession in court "a significant step forward in restoring the confidence that honest people should have in the integrity of the race-wagering system."

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Times staff writer David Wharton contributed to this report.

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