IN THE MATTER OF THE RACING COMMISSION ACT 2000, S.O. 2000, c.20;

AND IN THE MATTER OF THOROUGHBRED LICENSEE

RICHARD D. SILVER

Thoroughbred Licensee Richard Silver requested a hearing before the Ontario Racing Commission in respect of the Director's Notice of Proposed Order, issued March 1, 2005, to refuse the licence of Mr. Silver.

On August 24 and September 27, 2005, Chair Lynda Tanaka and Commissioners David Gorman and Brenda Walker convened to hear the matter. Wesley Jackson appeared for Mr. Silver and Aaron Dantowitz appeared for the Administration.

On hearing the evidence of Rick Grant, on reviewing the exhibits filed and on hearing the submissions of counsel, the Commission confirmed the order proposed by the Director.

The Commission's written reasons for decision are attached to this ruling.

DATED this 1st day of November, 2005.

BY ORDER OF THE COMMISSION (original signed by} Terry Stone

Terry Stone

Acting Executive Director

REASONS FOR DECISION

Richard Dave Silver requested a hearing, following Notice of Proposed Order given by the Director pursuant to Section 19 of the Racing Commission Act, issued March 1, 2005. The Director proposed to refuse to issue a licence to Mr. Silver who has been licensed in 2003 and 2004 as a thoroughbred owner.

Section 19 of the Racing Commission Act, 2000 provides as follows:

The Director shall refuse to issue a licence to an applicant or to renew the licence of an applicant if,

(a) there are reasonable grounds to believe that, while the applicant carries out activities for which the licence is required, the applicant will not act in accordance with law, or with integrity, honesty, or in the public interest, having regard to the past conduct of the applicant; or

(b) the applicant is carrying on activities that are, or will be, if the applicant is licensed, in contravention of this Act, the regulations, the rules or the terms of the licence. 2000, c. 20, s. 19.

The powers of the Commission in dealing with a hearing requested by a licensee are set out in Section 22 as follows:

(5) If the person requests a hearing, the panel shall schedule and hold the hearing. 2000, c. 20, s. 22 (5).

(6) After holding a hearing, the panel may by order,

(a) confirm or set aside the proposed order;

(b) direct the Director to take the action that the panel considers the Director ought to take to give effect to the purposes of this Act. 2000, c. 20, s. 22 (6).

(7) In making an order, the panel may substitute its opinion for that of the Director. 2000, c. 20, s. 22 (7).

(8) The panel may attach the terms to its order or to the licence that it considers appropriate. 2000, c. 20, s. 22 (8).

Certain facts were agreed and the issues were set out in the Prehearing Conference Report of Vice Chair Todd, held May 28, 2005. It was admitted that Mr. Silver had failed to disclose a conviction for criminal negligence in the operation of a motor vehicle in December 1986 in his applications for licence. It was also admitted that the actual wiretap disks are authentic and the chain of custody was admitted. A letter dated November 30, 2004 from Mr. Silver answering 13 questions posed by the Commission was also admitted by Mr. Silver.

The issues before us were set out in the prehearing conference record as:

1. Are the wiretaps involving Mr. Silver “lawfully obtained interceptions”?
2. Whether the contents and comments on the wiretaps are, in fact, “bookmaking”.
3. Is it Mr. Silver on the wiretap tapes?

The hearing was originally scheduled for June 6, 2005. It was adjourned at the prehearing conference to allow further disclosure with respect to affidavit evidence that supported the authorization for the wiretap and other disclosure requested by Mr. Silver’s counsel at that time. The hearing commenced on August 24 and was adjourned to permit an emergency appeal of a racing issue. All the evidence was heard on August 24 and submissions were made on September 27, 2005.

In argument both parties agreed that the wiretaps involving Mr. Silver were lawfully obtained interceptions (thereby disposing of issue numbered 1) and that all disclosure obligations had been discharged. Counsel for the Commission specifically noted that Mr. Silver had not brought any application to quash the judicial authorizations, of which there were three, that resulted in the wiretap evidence that was led before us. We therefore then have only the two remaining issues to deal with, which we will in the reverse order.

Issue #3 - Is it Mr. Silver on the wiretap tapes?

In submissions, counsel both agreed that the first issue to be addressed was whether or not it was the voice of Richard Dave Silver, whom the Commission had licensed in 2003 as thoroughbred owner, heard on the tapes from the wire tap investigation.

The only witness who testified was ORC investigator Rick Grant who was a member of the Toronto Police Services prior to joining the ORC staff in January 2005. In 2003 investigator Grant had been a member of the Illegal Gambling Task Force, which was headed by the Ontario Provincial Police (OPP) and included the Toronto Police Services and the ORC investigative staff. In the course of those duties he had been involved in the investigation of one Danny Cugini for illegal gambling. As a result of a judicially authorized wiretap of Mr. Cugini’s telephone, Rick Silver came to the attention of the investigators. An assistance order resulted in information coming to the investigators as to Rick Silver’s cell phone number which was identified in telephone calls between “Rick” and Danny Cugini that were recorded under the wiretapping.

The tape recording (now on CD) of nineteen telephone calls during a period from April 5, 2003 to September 8, 2003 was tendered and admitted as Exhibit 2 in these proceedings. Investigator Grant had prepared a summary of those calls with the date and time of the call and the intercepted telephone number of the call. The summary of the call indicates the investigator’s conclusion as to the parties to the call and also the contents of the call, in the investigator’s words. In each case the investigator concludes that the “Rick” who is identified or self identifies on the tape of each call is Rick Silver (or Richard Dave Silver).

Counsel for Mr. Silver asked the panel to give no weight to the investigator’s conclusions on the basis that there was no corroboration of important information. He relies on the fact that nowhere does “Rick” give his full name. Nowhere does Danny Cugini identify himself as anything other than “Danny”. He submits that the identification of the voice by the investigator should be disregarded because investigator Grant bases his voice identification of Rick Silver and the voice on the tape on one meeting that he had at a club with Rick Silver. No statement of the investigator’s qualifications in voice identification was given. No expert in voice identification was called to testify. Further, there was apparently no disclosure that the investigator was relying on this meeting as the basis of his identification.

The Administration position is that the licence application of Richard Dave Silver indicates that his usual name by which he is referred is “Rick” and that the phone number that was intercepted on calls 7 to 19 (all between July and September 2003) is the same number as the telephone number given by Richard Dave Silver on the licence application signed by him in March 2003. Further, investigator Grant and Detective Constable Caesar of the OPP reviewed the telephone calls intercepted of which there were thousands and investigator Grant listened to the voice identified as “Rick” on the intercepted calls. Investigator Grant was not shaken in cross-examination as to his confidence in his identification of the voice as that of Mr. Silver.

Counsel for Mr. Silver argues that there is no evidence that the phone number beginning with 416 was still that of Rick Silver in July, though it clearly is admitted that it was his phone number in March. He also relies on the fact that a different phone number (a 905 area code) was given on Mr. Silver’s 2004 licence application. He asks us to conclude, that there is no proof that Mr. Silver still had the telephone number at the time of the intercepted calls, i.e. we are asked to conclude that Mr. Silver did not have the 416 area code phone number in and after July 2003.

Generally speaking, the 905 area code is used, but not exclusively, for land lines telephones in Mississauga and other areas outside Toronto. We take notice of the fact that residents of Mississauga can arrange for a cell phone number that uses the 416 area code. We also take notice that phone numbers are not usually reassigned to another person within what would be a very few months.

In dealing with the submissions by Mr. Silver’s counsel we note the following. Mr. Silver’s address is, according to his application both in 2003 and 2004, in Mississauga. His fax line on his 2003 application is a 905 number but his “telephone number” filled in on the form is a 416 number. He gives no fax number in the 2004 application but rather gives a 905 “telephone number”. The conclusion that Mr. Silver’s counsel asks us to draw is that Mr. Silver no longer had the 416 number or he would have filled it in, in his 2004 application.

The application form does not prevent a licensee from giving the Commission his cell phone number rather than his land line number. The form simply requests a phone number. It does not require that all the phone numbers where a licensee may be reached (land line or cell, home or office) be included on the form. There is only space for two such numbers and one is specifically for the fax number. The change in phone number from one year to the next is equally consistent with the conclusion that the licensee chose to give his land line number rather than his cell phone number in 2004 (while keeping his cell phone number but not disclosing it on the form), as it is with the conclusion that the licensee asks us to make, that he had given up his cell phone number and it had been assigned to someone else who spoke to Danny Cugini and others about horse racing, football bets and internet gambling.

The tapes of the first three calls in 2003 refer to specific horses and races and led the investigator to the published information for the named horses. According to the published information which was included as tabs 6 and 7 of Exhibit 1, the horses’ named by “Rick” in the telephone calls raced either as owned by Rick Silver or as owned by Alpine Stables on April 5 and May 2, 2003, and the outcomes of the races as recorded in the published information match the comments made by “Rick” on the phone.

Counsel for Mr. Silver submits that the information at the tabs of Exhibit 1 has not been properly proven or identified. On the basis of the experience in the horse racing industry of this Commission, we recognize the documents at the tabs as records of races normally kept and provided to wagerers, industry participants, and the public with respect to the outcome of races. We therefore find that the information, while being hearsay, is reliable and used in the normal course of the business of the industry. To do otherwise would mean requiring an extraordinary amount of work and therefore hearing time to prove each element summarized on the page.

The Administration has satisfied us that the cell phone number in question was that of the licensee as at the relevant dates and that “Rick” on the taped calls was Richard Dave Silver. We therefore find that on the basis of the evidence before us that the “Rick” in the tapes is Rick Silver (Richard Dave Silver).

Issue #2 - Whether the contents and comments on the wiretaps are, in fact, “bookmaking”.

The next issue is the nature of the activities referred to in the taped telephone calls and the implications of Mr. Silver’s participation in those activities.

Mr. Silver’s counsel argues that we cannot conclude that what is said on the tape constitutes bookmaking. Indeed he points out that we cannot conclude on the basis of the evidence we have that the calls occurred in Ontario, and he submits that the conduct of the caller therefore may have been legal in the jurisdiction in which the calls took place. Being legal conduct, it cannot serve as a basis for us to conclude that Mr. Silver would not act in accordance with the law, or with integrity, honesty or in the public interest.

The calls that were recorded from the phone number of 416-728-7109 clearly deal with wagering on horse races, but not through any format operated by someone with a betting permit issued under the Canadian Pari-mutuel Agency Regulations. Mr. Silver places a bet on horse racing with Danny Cugini and then Danny Cugini informs him of how much he owes him. The phone call on the number 416-782-6234 deals with off shore wagering both by Rick and by people for whom Rick arranges the betting, and gambling machines and gambling at a club Rick Silver has bought. The calls on Mr. Silver’s cell phone include references to wagering on horse races, internet gambling, setting up internet accounts for betting on horses and other sports, payment to Mr. Silver for such betting as “juice” or the bookmaker’s share of the bet or wager. In the early phone calls, Mr. Silver appears to be relatively inexperienced in off shore or internet gambling and he is seeking information from Mr. Cugini as to the methods and systems. Mr. Cugini sets up accounts and gives Mr. Silver information on the access codes and passwords for various accounts for Mr. Silver’s contacts from whom he charges a fee.

Mr. Silver’s counsel argues that these conversations do not constitute bookmaking as defined as an offence under the Criminal Code. We do not have to determine that a Criminal Code offence has occurred in order to make a determination concerning Mr. Silver’s licence in these proceedings.

It is clear to us on the evidence that Mr. Silver, an owner of thoroughbred racehorses, was wagering or attempting to wager on horse racing illegally, i.e. not through the regulated pari-mutuel systems. In doing so he withheld the funds, which he would otherwise have contributed to the pari-mutuel handle. The purses for which owners compete are based in substantial part on the wagering handle. Therefore his actions, in participating in wagering outside the regulated structure, undermined the purse account on which he and other licensees depend. His conduct is totally inconsistent with the honesty and integrity expected of an owner of horses participating in races in Ontario and inconsistent with the well-being of the horse racing industry.

Further, it is clear that Mr. Silver sought to wager in off shore internet gambling sites and to not just encourage others to do so but to, in fact, set up the systems to permit others to do so and to profit himself from that gambling. Further he was advancing credit to others, in return for a fee, to permit these individuals to gamble illegally. The off shore internet gambling sites are not recognized by the issuance of a betting permit by the Canadian Pari-Mutuel Agency. The sites represent prohibited competition for the systems that are permitted. In supporting those systems, Mr. Silver disregarded both the policy and legislation of the federal and provincial governments and undermined the horse racing industry and pari-mutuel system in Canada, and therefore the jobs of thousands of people in Ontario. Whether the wagers he placed or facilitated “occurred” in Canada or elsewhere is not determinative as to the issue of whether or not he should be licensed as an owner in Ontario.

Conclusion:

We agree that the Director had reasonable grounds for refusing to issue a licence to Mr. Silver based on his past activities. We also find that Mr. Silver is unlikely in the future to act in accordance with the law and that Mr. Silver should not be licensed in any capacity in horse racing in Ontario. We therefore confirm the order proposed by the Executive Director in accordance with our powers under Section 22 (a) of the Act.

DATED this 1st day of November, 2005.

_____________________________

Lynda Tanaka

Chair