RULING NUMBER COM SB 024/2013
COMMISSION HEARING TORONTO, ONTARIO, APRIL 29 & MAY 14, 15, 16, 21, 22, 2013
NOTICE OF DECISION
IN THE MATTER OF THE RACING COMMISSION ACT, S.O. 2000, c.20;
AND IN THE MATTER OF THE APPEAL OF
JEFFREY BROOKS (LICENCE # 6368T7) and
BULLETPROOF ENTERPRISES (LICENCE # 862K92)
Jeffrey Brooks and Bulletproof Enterprises appealed against the Order of Immediate Suspension issued January 26, 2010, the Notice of Proposed Order issued February 2, 2012 and Ruling Numbers SB 14/2010, 23/2010 and 25/2010.
Dates of Hearing: April 29 & May 14, 15, 16, 21, 22, 2013
ORC Panel Members: former Vice Chair James M. Donnelly
Commissioner Brenda Walker
Commissioner Dan Nixon
Counsel for Appellants: Edward Greenspan, Q.C.
Vanessa V. Christie
Counsel for the Administration: Trudy Mauth
The Panel denied the appeal.
The Panel’s Reasons for Decision is attached to this Notice.
DATED at Toronto this 29^th^ day of August, 2013.
______________________________
Steven Lehman
Executive Director
TABLE OF CONTENTS
Paragraph
Background …………………………………………………………………….. 1-13
High Standard of Justice ……………………………………………………… 14 -18
Agreed Facts …………………………………………………………………... 19
Chronology of Events ………………………………………………………….. 19
Chronology of Hearing ……………………………………………………… 19
Evidence …………………………………………………………………………. 20 - 54
Telephone Records ……………………………………………………………. 55 - 67
Closing Submissions …………………………………………………………… 68 - 75
Standardbred Rule 6.13.01 ……………………………………………………. 76 - 94
Standardbred Rule 3.09 ……………………………………………………….. 95 - 96
Standardbred Rule 6.20 ……………………………………………………….. 97 - 106
Forfeiture of Purses ……………………………………………………………... 107 - 110
OSS Incentives ………………………………………………………………….. 111 - 112
Cost Recovery …………………………………………………………………… 113 - 116
Threats …………………………………………………………………………… 117 - 120
Penalty (Suspension) …………………………………………………………… 121 - 135
Penalty (Fine) ……………………………………………………………………. 136 - 143
Order ……………………………………………………………………………… 144 - 145
Addendum (Rules)
REASONS FOR DECISION
BACKGROUND
- This Ontario Racing Commission (ORC) Hearing as it now proceeds is in response to:
Written request by Jeffrey Brooks (Brooks) relating to Standardbred Ruling 23/2010 immediately suspending Jeffrey Brooks’ ORC licence G368T7 on January 28, 2010, Racing Commission Act 2000 Section23(3).
Written request by Jeffrey Brooks and Bulletproof Enterprises (Bulletproof) which is licensed to Jeffrey Brooks (# 862K92) relating to the Executive Director’s Notice of Proposed Order dated February 2, 2012, alleging misconduct by and seeking sanctions against Jeffrey Brooks and Bulletproof, s. 22(3) RCA 2000,
Additional Notices of Proposed Order related to the David Brooks family being Terry Brooks, his former wife, Andrew Brooks, his son, Victoria Brooks, his daughter, and racing stables licensed to those family members as follows:
Seize The Day Industries (# 085L81) - Andrew Brooks)
Goldfinger Enterprises (# 301L09) - Terry Brooks
VAE LLC (#374J40) - Andrew Brooks and Terry Brooks
To complete the array of licensees, Perfect World Stable (Perfect World) was registered to David Brooks and Terry Brooks. David Brooks and Jeffrey Brooks are brothers
Upon commencement of this Hearing on April 29, 2013, counsel for the David Brooks family members (other than Jeffrey Brooks) and their racing stables advised that their issues with the ORC had been resolved. Upon a consent order, those matters were formally dealt with by the Chair of the ORC. It remained to proceed with this Hearing relating to Brooks and Bulletproof.
For valid reason unnecessary to be stated here, counsel for Brooks requested and was granted an adjournment to May 14. The Hearing proceeded May 14, 15, 16, 21 and 22. Written submissions were completed by July 17, 2013.
Vice Chair Donnelly’s appointment to the ORC expired November 7, 2012. His authority to continue this matter thereafter is as follows:
On June 7, 2012, (five months prior to expiration of Donnelly’s appointment) counsel for the Administration and Brooks appeared before this Panel to fix a date for pre-hearing motions relating to disclosure and particulars. The Motions proceeded on the date agreed upon by counsel, being September 6, 2012. The Ruling on the Motions accompanied by Reasons was released on November 6, 2012.
Section 4.3 Statutory Powers Procedure Act provides:
“If the term of office of a member of a tribunal who has participated in a hearing expires before a decision is given, the term shall be deemed to continue, but only for the purpose of participating in the decision and for no other purpose.”
- Having been seized of this Hearing by virtue of ruling on the preliminary Motions, and the Hearing date having been fixed as counsel agreed, this Panel continued to final disposition pursuant to S4.3 SPPA.
David Brooks conducted a large scale, high profile standardbred racing operation principally through the Perfect World stable. His ORC licence (Perfect World) was suspended November 16, 2007 in reciprocal enforcement of a racing suspension in Pennsylvania on October 29, 2007. The Pennsylvania suspension remained in force pending the outcome of criminal charges against David Brooks filed October 24, 2007, alleging fraud and insider trading.
In addition to that reciprocal suspension, David Brooks’ ORC license expired on his birthday in December 2007 and has not been renewed. On September 8, 2009, the ORC declared David Brooks ineligible to race in Ontario until he appeared before the Deputy Director of the ORC. He has not done so. Accordingly, that ineligibility continues.
The ORC registration for Bulletproof was transferred as follows:
September 24, 2009 Jeffrey Brooks to Andrew Brooks
December 30, 2009 Andrew Brooks to Jeffrey Brooks
Those transfers in close succession followed David Brooks’ divestiture of his racing operation consequent upon his criminal charges and loss of racing privileges. That transfer activity prompted the ORC regulatory investigation underlying this Hearing.
The Brooks family participation in racing was long term and extensive. The ORC investigation was skillful and comprehensive. Seventeen large volumes of materials were referenced on this Hearing.
The central allegation is that Jeffrey Brooks permitted and facilitated his brother, David Brooks, while David Brooks was unlicensed and under continuing suspension, to be actively and extensively engaged in various phases of the operation of his Bulletproof stable. In relation to that allegation the issues are, firstly, the nature, quality and extent of David Brooks’ participation and control, if any, in Bulletproof’s racing and business activity while he was under suspension; and secondly, the knowledge of and support for that activity and control by Jeffrey Brooks acting with full knowledge of David Brooks suspension.
The broad scope of that claimed unlicensed activity by David Brooks demonstrating control in whole or in part as follows:
In the racing operation, frequent contact with trainers, giving instruction and direction regarding training and racing activity, including choice of race drivers, racing venues and race tactics.
In the business operation, David Brooks negotiated and attempted to negotiate settlement of accounts in reduced amounts for the breeding, care and training of race horses.
David Brooks’ involvement in the Bulletproof racing activity was more knowledgeable and more aggressive than that of Jeffrey Brooks.
David Brooks gave instruction and direction regarding the sale by auction of Perfect World and Bulletproof broodmares with supplementary instructions to have many of the mares purchased back in the name of VAE LLC (a Brooks family stable in which David Brooks had no disclosed or registered ownership interest). David Brooks gave instructions relating to transporting those mares to and from the 2009 Standardbred Canada Spring Fling Flamboro Sale and participated in arranging the financing for repurchasing those mares.
It is alleged that Jeffrey BROOKS violated the Rules by taking instruction from, or permitting a suspended licensee, namely David BROOKS, to have involvement in his horse-related businesses.
It is alleged that David BROOKS remained involved in the purchase, sale, training decisions and payment arrangements with horse industry participants when he was prohibited from doing so.
It is alleged that Jeffrey BROOKS and BULLETPROOF ENTERPRISES violated the following Rules:
Rule 1.09 (conduct not provided for in the rules; best interests of racing),
Rule 3.09 (financial irresponsibility),
Rule 6.13.01 (horse owned or controlled by suspended/unlicensed/ineligible person),
6.13.02 (transfer of horse by suspended/disqualified/unlicensed/ineligible person),
Rule 6.13.03 (evidence to establish bona fide transaction),
Rule 6.13.04 (nomination or entry made by suspended person; owner responsible),
6.17 (threaten bodily harm, use insulting, offensive or improper language, be guilty of any improper conduct); and
Rule 6.20 (misconduct or act injurious or prejudicial to racing)
For convenient reference these Rules are appended hereto
A HIGH STANDARD OF JUSTICE
These issues are of grave import for the Industry, bearing on the core value of racing integrity. They are also of grave import for Jeffrey Brooks, his personal integrity being in question. Given such a fundamental issue, it is well to commence with a statement of basic principle calling to mind the required high standard of justice, the burden of proof, the standard of proof and the duty to act reasonably in matters of discretion and correctly in matters of law.
The Panel is mindful that evidence does not become fact in the Hearing unless and until it is assessed in light of the entire evidence to be truthful, accurate and reliable. It must be determined whether, upon that evidence so accepted, the essential elements of the breach of racing rules alleged has been proven to the required standard.
The standard of proof is authoritatively settled by F.H. McDougall in the Supreme Court of Canada as cited below. The burden of proof is on the Administration on a balance of probability with an evidentiary burden on the Administration of cogent evidence, clear and convincing.
It has long been established that a high standard of justice is required when the right to continue ones profession or employment is at stake – Kane v. University of British Columbia 1980 1 S.C.R. 1106, Dickson, J. The need for that caution was discussed in ORC v. Wallis and Piroski S.B. 036 2011 as follows:
That need for caution flows from the following concepts expressed by the eminent jurist Cartwright J., soon to be Chief Justice of the Supreme Court of Canada:
“Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved…” Cartwright J. in Smith v Smith and Smedman 1952 CanLII 3 (SCC), 1952 2 SCR 312. (underlining added)
Cartwright J. goes so to state at P 331-2:
“I wish to emphasize that in every civil action before the tribunal can safely find the affirmative of an issue of fact required. To be proved it must be reasonably satisfied, and whether or not it will be so satisfied must depend upon the totality of the circumstances on which its judgment is formed including the gravity of the consequences of the finding.” (underlining added)
Cartwright J. then goes on to conclude his judgement stating:
“The gravity of the consequences flowing from a particular finding assumes great importance in such a case.” (underlining added)
151.In result, the civil standard applies. However, the evidential burden remains as cogent, clear and convincing as it applies to the elements which must be proved - all to be assessed in context and that context includes the seriousness of the consequences. It would be patently and grievously wrong to act upon evidence which is unclear and unconvincing.
152.The testimony underlying findings of fact must be credible and reliable. Evidence that is fragile, dubious or suffering from inherent unreliability, falls short of the mark. Weak and non-persuasive evidence supplemented by weak and non-persuasive evidence does little to augment probative force. Vigilance of a high order is required in assessing the evidence and determining that the proper inferences are drawn.”
- The need for caution flows, in part, from gravity of consequence. There is no evidence that Jeffrey Brooks earns his living by horse racing. However, there is a similar grave consequence for him, that being his personal integrity. One is mindful of Iago (Othello Act III Scene 3, Line 155) “Good name in man and woman, dear My Lord, is the immediate jewell of their souls. Who steals my purse steals trash”. Accordingly, an awareness of and sensitivity to that high standard of justice as indicated by the consequences is appropriate.
AGREED FACTS
As identified by the Factums filed, the parties agreed in writing to these facts:
Jeffrey BROOKS is the brother of David BROOKS, the uncle of Andrew and Victoria BROOKS and brother-in law to Terry BROOKS. Jeffrey was licensed with the ORC on July 18, 1983.
Terry BROOKS is the ex-wife of David BROOKS, the mother of Andrew and Victoria BROOKS and sister in law to Jeffrey BROOKS. Terry was licensed with the ORC on September 6, 1986.
Terry BROOKS was fully suspended by the ORC in Ontario on May 17, 2008, until purse money was paid back to Kawartha Racetrack. Her licence was suspended because a horse she owned tested positive for a prohibited substance. The purse was paid back and Terry BROOKS’ suspension was lifted on August 27, 2009.
Andrew BROOKS is the son of David and Terry BROOKS and brother of Victoria BROOKS. His uncle is Jeffrey BROOKS. Andrew was licensed with the ORC on November 20, 2009 when he was 25 years old.
Victoria BROOKS is the daughter of David and Terry BROOKS and sister of Andrew BROOKS. Her uncle is Jeffrey BROOKS. Victoria was licensed with the ORC on May 14, 2007 when she was 22 years old.
David BROOKS is the brother of Jeffrey BROOKS, ex-husband of Terry BROOKS and father to Andrew and Victoria BROOKS.
PERFECT WORLD ENTERPRISES is registered to David and Terry BROOKS. The stable was licensed with the ORC on June 24, 1994.
BULLETPROOF ENTERPRISES is registered to Jeffrey BROOKS. Ownership was transferred to Andrew BROOKS on September 24, 2009 and then transferred back to Jeffrey BROOKS on December 30, 2009. The stable was licensed with the ORC on June 9th, 2007.
SEIZE THE DAY INDUSTRIES is registered to Andrew BROOKS. That stable was licensed with the ORC on January 12, 2010.
GOLDFINGER ENTERPRISES is registered to Terry BROOKS. That stable was licensed with the ORC on January 12, 2010.
VAE LLC is registered to Andrew and Victoria BROOKS. That stable was licensed with the ORC on August 10, 2009.
On July 5, 2007, a horse owned by David BROOKS received a positive drug test.
On November 16, 2007, the ORC suspended David BROOKS, reciprocating a Pennsylvania State Decision.
In December of 2007, David BROOKS’ ORC licence expired.
On May 17, 2008, as a consequence of the positive test referred to in paragraph 12 herein, BROOKS’ licence was suspended by the ORC until he re-paid his purse of $2,700 to Kawartha Downs.
On July 31, 2009, David BROOKS returned the purse monies and made payment using a bank draft drawn on the BULLETPROOF ENTERPRISES account.
On September 8, 2009, David BROOKS was declared ineligible to be licensed in Ontario until he appeared before the Deputy Director of the ORC. He has not done so to date.
On September 14, 2010, David BROOKS was convicted of 17 counts including insider trading and securities fraud in Central Islip, New York.
David Brooks is still in custody in New York.
On January 26, 2010, the Executive Director issued an Immediate Suspension Order, suspending the licenses of Jeffrey BROOKS, Victoria BROOKS, Andrew BROOKS and Victoria BROOKS and their associated stables.
On February 10, 2010, Counsel for all Parties requested a Hearing in relation to this Order pursuant to s.23 (3) of the Racing Commission Act, 2000.
On February 2, 2012, a Notice of Proposed Order to Suspend was issued against the aforementioned Parties.
On February 17, 2012, Counsel for Jeffrey BROOKS and Bulletproof Stables requested a Hearing in relation to this Notice of Proposed Order to Suspend pursuant to s.22 (3) of the Racing Commission Act, 2000.
On February 21, 2012, Counsel for the BROOKS family and stables made the same request.
On September 6, 2012, a Panel of the Ontario Racing Commission was convened to hear pre-hearing motions brought by the Applicants.
The Panel’s ruling on the motions was released on November 6, 2012.
On November 20, 2012, Hearing dates were selected. The Hearing is scheduled to commence April 29, 2013, and run for a period of 4 weeks.
THE CHRONOLOGY OF EVENTS WAS
July 18, 1983 Jeffrey Brooks licensed by ORC - followed by a long and active career in racing.
September 8, 1986 Terry Brooks licensed by ORC.
June 24, 1994 Perfect World Enterprises (David and Terry Books) licensed by ORC.
May 14, 2007 Victoria Brooks licensed by ORC. – Age 22.
June 9, 2007 BULLETPOOF ENTERPRISES (Jeffrey Brooks) licensed by ORC.
July 5, 2007 A horse owned by David Brooks received a positive test.
October 25, 2007 David Brooks indicted in USA.
October 29, 2007 David Brooks suspended by Pennsylvania Racing Authority.
November 16, 2007 The ORC suspended David Brooks’ licence reciprocating a Pennsylvania suspension.
December 2007 David Brooks’ ORC licence expired.
Jan. 3, 2008 David Brooks was released from custody on bail. David Brooks remained out of custody until his bail was revoked on January 17, 2010.
May 17, 2008 Terry Brooks (Perfect World) fully suspended for a positive test at Kawartha (purse not refunded).
July 31, 2009 BULLETPROOF wire transfer repaid Kawartha purse money.
August 10, 2009 VAE LLC (Andrew and Terry Brooks) licensed by ORC.
September 8, 2009 David Brooks declared ineligible to be licensed in Ontario until he appeared before the Deputy Director. Has not done so.
Sept 24, 2009 BULLETPROOF ENTERPRISES (Jeffrey Brooks) transferred to Andrew Brooks.
November 20, 2009 Andrew Brooks licensed by ORC. Age 25.
December 30, 2009 BULLETPROOF ENTERPRISES transferred to Jeffrey Brooks
January 12, 2010 SEIZE THE DAY INDUSTRIES (Andrew Brooks) licensed by ORC.
January 12, 2010 GOLDFINGER ENTERPRISES (Terry Brooks) licensed by ORC.
September 14, 2010 David Brooks convicted on 17 counts.
THE CHRONOLOGY OF THIS HEARING
January 26, 2010 ORC Immediate Suspension Orders pending investigations, seizure of purses held at racetracks.
February 10, 2010 Request for an ORC hearing.
February 21, 2012 Notice of Proposed Order.
September 6, 2012 Pre-hearing motions.
November 8, 2012 Ruling on motions.
November 20, 2012 Hearing date fixed as agreed upon by Counsel.
April 29, 2013 Return date for hearing – adjourned to May 14, 15, 16, 2013 – continued May 21, 2013. Hearing completed May 22 subject to written closing submissions.
July 17, 2013 Written closing submissions completed.
THE EVIDENCE
The Brooks stables included top caliber stakes horses competing in marquee events in Ontario and the north-eastern United States. In 2009, 105 Bulletproof horses competed in 1,004 races in Ontario with purse winnings of $6,558,567.00. In 2010, Bulletproof horses competed in 21 races in Ontario, winning $112,860. At times as many as 170 broodmares from the Brooks stables were stabled at the Timpano farm in Ontario.
Witnesses testifying at this Hearing included: Drivers, Luc Ouellette and Tim Tetrick; Trainers, Travis Bowman, Rod Boyd, Wayne Preszcator, Paul Reid; Veterinarians, Dr. John Hennessy, Dr. Randy Robertson, Dr. Ken Armstrong; Farrier, Travis McKay; Farm Manager, Mike Timpano; Kawartha Raceway Manager, Crystal O’Brien; Joanne Wray proprietor of Joanne’s Staking Service; Karen Hauver of the Ontario Sire Stakes (OSS) program. As well, there were agreed accounting records as identified by Woodbine Entertainment Group (WEG) Employees, Judy Hodges and April Campbell.
Luc Ouellette had successfully driven horses for David Brooks’ Perfect World Stable in the late 1990’s. He had driven Shacked Up for Bulletproof in 2009 and in doing so was undefeated going into the Breeder’s Crown. Upon being notified by Bulletproof trainer, Josh Marks, of the Tracey Brainard Stable, that Tim Tetrick would drive Shacked Up in the Breeder’s Crown at WEG, Ouellette phoned David Brooks and asked if he could drive the horse in the OSS Super Final. In that telephone conversation, David Brooks responded that he could. Ouellette did drive the horse and won the Super Final. The registered owner of Shacked Up was Bulletproof.
Ouellette explained that given his experience with the Brooks brothers, it was his opinion that David Brooks “called the shots”. So he sought and obtained permission from David Brooks even though he knew David Brooks was suspended.
Travis Bowman trained 12 horses for Bulletproof in the spring of 2008. He estimated that 80% of the telephone conversations from David and Jeffrey Brooks were with David Brooks. Those calls were daily except Sunday. Bowman testified that when he required instructions he contacted David Brooks. David Brooks gave direction to Bowman about where the horses were to race, who was to drive, how they were to be trained and generally every aspect of the horse operation. David Brooks provided information to Bowman about opinions expressed by other trainers relating to the horses in Bowman’s care; Jeffrey Brooks spoke to Bowman by phone a few times per week but never gave instruction about where to race or who should drive. Bowman testified that Jeffrey Brooks was aware of David Brooks’ instructions and never challenged or countermanded them.
Bowman faxed his accounts to a Bulletproof number provided by Jeffrey Brooks. Those monthly statements were chronically in arrears. His final account of $38,000.00 was refused by Bulletproof. Mike Timpano (owner of the premises where Bowman trained) paid Bowman in full and was left to try to recover from Bulletproof. Bowman’s Bulletproof horses were not racing well and one of them had a positive test at Kawartha. In consequence the horses were taken from Bowman’s care and transferred to trainer Rod Boyd.
Rod Boyd trained for Bulletproof from April 2008 to January 2009. For the first few months, Jeffrey Brooks gave the instructions relative to racing issues. After that, David Brooks called to give the instructions on and to enquire about care and racing. Jeffrey Brooks would say by telephone “talk to my brother.” The telephone calls were at least daily. David Brooks called a couple times per week towards the end of the training relationship with Boyd.
According to Boyd, on occasion, both David and Jeffrey Brooks would give instructions on how the horses were to be driven in races or by whom. Boyd received standing instructions from Jeffrey Brooks that one of the top five drivers should drive for Bulletproof. On one occasion David Brooks gave instruction that a certain named driver was to drive. Boyd acknowledged that it was common knowledge that David Brooks had been suspended at that time. Boyd’s invoices were sent to Jeffrey Brooks. In discussion over late or insufficient payment of Boyd’s account, Jeffrey Brooks would say “talk to David.”
The Bulletproof horses raced by Boyd were not doing well. Boyd’s account was about $80,000. Bulletproof sought release and transfer of the horses. Boyd, asserting some type of possessory lien, refused to release them until his account was paid. Unpleasant phone calls were made over a two week period in the course of which a threat to burn Boyd’s house was made by Jeffrey Brooks. David Brooks offered to settle the account for a reduced amount. Boyd refused. This impasse continued for about 2 weeks. Boyd then received a cheque which could not be cashed. Later that day, Boyd received payment of his account by cheque from WEG on Bulletproof’s purse account. Boyd then released the horses which were picked up for delivery to trainer Wayne Preszcator’s stable.
Wayne Preszcator trained various Bulletproof horses ranging in number from 4 to about 35. According to Preszcator, he reported more frequently to Jeffrey Brooks but did have a few conversations with David Brooks. These calls by David would follow a horse not racing to expectations. Either brother was apt to call Preszcator before the horse was off the track following the race.
Preszcator’s accounts were forwarded to Jeffrey Brooks and were chronically in arrears. On one occasion Preszcator received a cheque from Bulletproof for $20,000.00. That cheque could not be cashed. When arrears reached about $175,000.00, David Brooks called offering a settlement of $75,000.00 followed by a fresh start training 20 yearlings. Preszcator refused. The account had reached $191,548.42. Preszcator did retain counsel. A cheque had been tendered in payment but could not be cashed. Preszcator was told by David Brooks to see a lawyer.
After protracted legal proceedings and substantial legal fees, the account was settled for $75,000 (a substantial reduction) and by agreement Preszcator took a horse on account.
When Dr. Armstrong would not supply Veterinarian services to Bulletproof horses in Preszcator Stable absent guarantee of payment, Preszcator undertook to pay Armstrong accounts. Armstrong provided the services. Preszcator paid about $10,000 to Armstrong leaving an unpaid balance of $800.00. Prescator recovered $1,000. from Bulletproof. Preszcator talked to both David and Jeffrey Brooks about the repayment but the balance of $9,000. remains unpaid. As of January 29, 2012; including interest, the account totaled $14,106.
Paul Reid had trained Perfect World horses for David Brooks. When David Brooks was suspended, Reid accompanied the Perfect World horses to the Bulletproof Stable losing no work time and continuing to work with the same horses. Many horses were transferred from Perfect World to Bulletproof particularly about April 2007 (Bulletproof being licensed by the ORC June 9, 2007) about six months before David Brooks’ Indictment. Reid’s invoices to Bulletproof went to the same fax number as had his Perfect World invoices. David Brooks called occasionally dealing with the Bulletproof horses. Reid reported weekly or bi-weekly by telephone. Reid’s maximum number of horses for Bulletproof was 78 through the 2009/10 racing season. He estimates that he talked to David Brooks about a half dozen times. His impression was that the day to day operation of the stable was by Jeffrey Brooks.
As the horses went on to other trainers to race at various tracks, Reid was deprived of the potential for the 5% trainer’s share of purses. To compensate for that loss, Reid claimed there was an oral agreement that as the original trainer, he should receive 2% of the purse winnings through 2009/10. That claim had been paid for 2007 and 2008 by Perfect World. The horses earned about 6.7 million dollars in 2009 and 2010. Reid’s claimed 2% was not paid by Bulletproof. Excuses were made. Finally the claim was denied. Brooks’ response was that nothing was owing. As a result Reid left Bulletproof employment in November 2010. Reid had a disagreement with David Brooks over claimed entitlement to $5,000 for expenses paid. He later sued in Small Claims Court and settled for $5,000. A lawsuit over this 2% claim was in progress in New Jersey. The issue in the New Jersey law suit is said to be whether the 2% deal on Perfect World horses continued to apply when ownership was transferred to Bulletproof. A second trial issue is said to relate to the race Horse Cheap Motel. That Reid has ongoing litigation with Bulletproof is a factor to be considered in assessment of the reliability of his testimony. Seeking resolution of the law suit could constitute incentive not to incur further disfavour.
That theme of delinquent and reduced payment of accounts experienced by trainers was sounded by various trades and service personnel in the industry.
Farrier Travis McKay shod Bulletproof horses for Wayne Preszcator in 2008 and 2009. His unpaid account over 6 months increased to $27,000. There had been no objection by Bulletproof to his monthly statements, nor had there been any payment. The work was accepted by Bulletproof and he continued to provide the service.
McKay phoned Jeffrey Brooks who was described as rude and who refused payment, telling McKay to get a lawyer and hung up ending the discussion. McKay contacted a series of lawyers, made no recovery and never again worked for Bulletproof. No part of the $27,000 has been paid.
Veterinarian, Dr. John Hennessey, worked on Bulletproof horses in the Tracey Brainard stable. Through trade scuttlebutt he was apprehensive about payment and undertook the work only upon Brainard’s undertaking that she would be personally responsible for his account.
Hennessey’s history with the Brooks had been: - About the year 2000, he did work on David and Terry Brooks’ Perfect World horses and was not paid. Subsequently at WEG, he was asked to work on a Brooks horse entered in the Breeder’s Crown and racing from the Kevin McMaster stable. Hennessey contacted McMaster by phone to obtain McMaster’s assurance of payment. Based on McMaster’s assurance he performed the service and was paid. Two or three years later, Hennessey was asked to work on Bulletproof horses in the Kevin McMaster stable. He told McMaster he would think about it if his account dating back to 2000 was paid. The old account was paid. Hennessey “thought about it” and declined any further work for Bulletproof.
Dr. Randy Rubenstein was aware of industry talk of difficulty with payment by Bulletproof. In the interval January/09 to April/09, he was working on Bulletproof horses in the Cassie Coleman stable. He agreed to do so as a courtesy to Coleman, a high profile trainer. As a pre-condition, Rubenstein required that Jeffrey Brooks provide credit card information. Credit Card information was provided but was ineffective in enabling payment. Rubenstein then arranged to do the work provided he was paid monthly. His first month’s account was paid. His second was not. Rubenstein left telephone messages for Bulletproof with no result. He then sued in Small Claims Court and finally in frustration, settled for a reduced payment.
Dr. Ken Armstrong rendered services to Bulletproof horses in the Cassie Coleman stable. His account was paid for a few months through use of a credit card number. That arrangement was terminated by Jeffrey Brooks. Armstrong’s account increased to $60,000. Jeffrey Brooks offered settlement for a reduced amount giving no reason for the reduction. Brooks required export papers for the horses in order to cross the border and David Brooks spoke to Armstrong about the account. Armstrong regarded David Brooks as being in charge because he had always found it to be that way. Armstrong refused to sign those papers pending payment. After some delay payment was made by cheque from Joanne Wrays Staking Service. Wray was unsure which Brooks brother authorized this payment indicating that their relationship was such that she would have followed that direction from either of them. The export papers were signed and delivered and the horses were moved. Subsequently, Armstrong treated a mare for Bulletproof. The mare died. Jeffrey Brooks protested that the account was excessive. Armstrong finally recovered his account in full. Jeffrey Brooks objection to the amount of the account was the only reference in evidence to any specific account being claimed to be excessive by industry standards.
Karen Hauver, OSS Coordinator, received OSS nomination and sustaining payments for Bulletproof horses from Wayne Preszcator (July 10/09) and Josh Marks. Each bounced a cheque for OSS eligibility payments which was later honoured. The Administration contention that the cheques would have been honoured if Bulletproof had paid Preszcator and Marks on time may well be true but remains unproven. Hauver received instructions from either David Brooks or Jeffrey Brooks about staking horses. In early 2008 David Brooks stated that henceforth Jeffrey Brooks would attend to the staking.
JoAnne Wray of JoAnne’s Staking Service paid the Rod Boyd account of about $80,000 from funds held for Bulletproof. Wray was unsure which Brooks brother authorized this payment indicating that their relationship was such that she would have followed that direction from either of them.
Mike Timpano boarded up to 170 mares from the Brooks stables, including Perfect World and Bulletproof and managed their breeding operation, providing advice regarding selection of sires and supervising breeding, foaling and care of the foals for the 2008, 2009 and 2010 racing seasons. Upon instructions from David Brooks, Timpano made trips to New York City and Boca Raton, Florida, to review the breeding programs with David Brooks. Jeffrey Brooks was also present at that Florida meeting. Timpano regularly reported arrival of foals to either David or Jeffrey Brooks.
When David Brooks was indicted he told Timpano that he had no more interest in the horses. However, according to Timpano, David Brooks provided instruction for Perfect World mares in 2008 following loss of his Ontario eligibility. When David Brooks’ licensing difficulties spread to different jurisdictions, on David Brooks’ instructions, the mares from Timpano’s farm were put through the 2009 Standardbred Canada Horse Sale (the Spring Fling at Flamboro).
David Brooks provided a list of mares to be re-purchased for VAE LLC (Andrew and Terry Brooks). Otherwise, the Brooks family gave no buyback instructions. Timpano arranged two buyers to bid at the auction for this purpose. Jeffrey Brooks provided his signed authorization arranging credit for the buyback on behalf of Seize the Day and VAE Stables which were registered to David Brooks’ two children. In neither stables did David Brooks have any interest disclosed to the ORC. Bulletproof purse cheques totaling $98,321.26 were applied to cover part of the buyback. The balance was by wire transfer from VAE LLC $779,982.60. Perfect World entered 37 horses in the sale; 33 were bought back. David Brooks arranged payment of the trucking account for transportation to and from the sale. Throughout the course of the sale, Timpano was in constant telephone contact with David Brooks, providing information as to the horse currently under the hammer and the bidding progression. The re-purchased mares were returned to the Timpano farm.
Timpano’s monthly amounts ranged around $90,000 ($500 per month per horse plus shipping, breeding, feed and other expenses). Arrears were chronic and escalating. At one stage he was paid $10,000 on an account of $160,052. Timpano’s account increased to $270,000. Bulletproof denied Timpano’s proposed claim for interest on the arrears. In answer to Timpano’s enquiry about payment, David Brooks told him he could have money soon.
Trainer Travis Bowman had his Bulletproof racing stock stabled at the Timpano farm. As stated earlier, his account was unpaid by Bulletproof. Timpano thought Bowman was getting “the runaround” so Timpano paid Bowman’s account. Timpano then consulted his solicitor regarding recovery of that Bowman payment from Jeffrey Brooks who claimed to be unhappy with Bowman’s performance and who did not repay Timpano.
David Brooks spoke by telephone to Timpano about Timpano’s account for Bowman which was still unpaid. Brooks was said to be screaming and irate, referring to “all the money he had paid Timpano” and wanting more help from Timpano for his brother, Jeffrey, in his dispute with Travis Bowman. Timpano described the Brooks brothers’ response to requests for payment as “always bartering.”
On November 18, 2009, Timpano’s lawyer wrote Jeffrey Brooks demanding payment of $226,000 claimed to be owing by Bulletproof for breeding privileges which were claimed to have been orally promised to Timpano and were in default. This claim was refused by Bulletproof and not pursued by Timpano. Shortly thereafter, Timpano bypassed his lawyer and dealt directly with Jeffrey Brooks and made a deal whereby he accepted a mare and foal in satisfaction of his $23,000 claim for payment of Travis Bowman account against Bulletproof. Timpano regarded this as a bad deal but wanted to end the matter. The final payment to Timpano December 11, 2008, was in full of his account and was provided by a WEG cheque on the Bulletproof purse account. Thereafter Timpano rendered no further service to either Brooks.
Timpano had three transactions with the Brooks, each of which ended in delayed or disputed payment: Firstly; as a bonus from David Brooks – stallion breedings by Western Terror and I Am A
Fool – lifetime, one each per year. Those breedings were not provided. Secondly; settlement and recovery of Timpano’s payment of the Travis Bowman training account against Bulletproof and thirdly; payment for management of the broodmare band.
David and Terry Brooks’ Perfect World horse, Born to Grin, had a positive test at Kawartha Downs May 17, 2008. Terry Brooks of Perfect World was suspended until the purse was refunded. David Brooks paid this refund of $2,106.00 Canadian funds by a Bulletproof cheque.
Tracey Brainard testified by telephone from New York State having solemnly affirmed that her answers would be truthful. From July 2008 to the spring of 2010, Brainard trained and raced about 100 horses for Bulletproof, it being borne in mind that purse winnings in 2009 were about 6.6 million and 105 Bulletproof horses raced in Ontario in 2009. Tracey Brainard paid blacksmith accounts and approved veterinarian’s accounts for payment by Bulletproof. Her accounts which were sent to Bulletproof were paid subject to some delay. For services for the last 2/3 weeks she rendered no accounts. In the spring of 2010, Bulletproof had a progression of problems with different racing jurisdictions. In consequence Brainard told Jeffrey Brooks to find other trainers. She sent the Bulletproof horses away as directed.
Tracey Brainard estimated that during the time that she trained for Bulletproof, she spoke to David Brooks about the horses approximately 15 times. According to Brainard, when David Brooks phoned, he did not give instructions about the horses. The telephone records, filed in evidence, put the reliability of her evidence, particularly as it relates to David Brooks’ participation in Bulletproof activity, in substantial doubt.
THE TELEPHONE RECORDS
- The telephone records identify the telephones firstly, from which the call was made and secondly, by which it was received, but do not identify the person making or receiving the call and do not provide any content of the call. The telephone numbers were:
David Brooks (631 897 9554) (212 888 3944)
Jeffrey Brooks (561 756 1111)
Tracey Brainard (386 804 9924)
Josh Marks (315 941 3951) (315 552 8975)
The evidence identifying each call was incorporated into two large volumes. Although, in the course of disclosure, those individual telephone records (Disclosure Volume 8 & 9) were provided to Jeffrey Brooks’ counsel on March 8, 2012, fourteen months in advance of the hearing and Jeffrey Brooks was in attendance at the Hearing on May 14, 15 and 16 and Tracey Brainard was available by telephone, no evidence was advanced by the applicants explaining or contradicting those phone records or suggesting that the calls were anything but what they appear to be.
Significant features are:
The timeframe was 2009.
The calls are recorded individually each specifying date, time, duration in minutes, the number of the phone originating the call, the number called, the place of origin and of destination.
Josh Marks was a hands-on trainer in Tracey Brainard’s stable and traveled with the horses to important races. Tracey Brainard testified that 2009 was such a busy year that she and her assistant, Josh Marks, were rarely together. Josh Marks ignored the subpoena served on him requiring his attendance at this Hearing. He had opportunity to testify at the Hearing but declined to do so. Thereby he deprived the Panel of, not only his testimony but also, of any demeanor assessment and any benefit accruing from cross-examination.
The calls total 1,603 as follows:
Trainer Brainard’s phone to or from Jeffrey Brooks’ phone 122
Trainer Brainard’s phone to or from David Brooks’ phone 173
Trainer Marks’ phone to or from Jeffrey Brooks’ phone 157
Trainer Marks’ phone to or from David Brooks’ phone 1151
Total 1603
- Tracey Brainard’s estimate of the number of calls by David Brooks (approximately 15) and thereby his implied participation in the Bulletproof racing activity must be assessed in light of the telephone records as well as the following:
Brainard may have been influenced by anticipation of personal gain. Much of the trainers’ 5% share of the $890.000 under seizure at WEG would go to her if Bulletproof succeeds in these proceedings.
The circumstances are capable of supporting the possibility of lingering loyalty by Brainard for past substantial financial successes with Bulletproof and anticipation or hope for future association.
There may be a sense of entitlement on Brainard’s part, based on the proposition that Bulletproof won the purse money in issue and was entitled to payment.
- Other significant issues were:
The calls by number and clustering would probably become intolerable in short order unless they were to or from a person in authority.
The timing of the calls is significant. The intense clusters coincide with large purse Marquee Race events at prominent racetracks. If someone (perhaps the owner) just wanted race results, such results could be readily available by watching the live race on line, calling the race secretary, getting the results on line or attending the race.
The cluster of calls indicate that more was required than the result of the race, perhaps commentary on racing tactics, how the horse came out of the race or some enquiry about a characteristic of the horse, how it left the gate and so on.
The number of calls in the cluster may indicate reference to multiple horses at that track or different tracks racing at different times on the same night.
In an attempt to further identify the timing, clustering and significance of those calls, ORC investigator Moffatt checked race dates for significant Premier Events at prominent tracks in Ontario and the north eastern United States. (such as the Meadowlands Pace, the Little Brown Jug, the Juggette, the Breeder’s Crown, OSS Gold Series Final), all with significantly increased purse structures.
Investigator Moffatt then matched race lines from Bulletproof horses entered in those races and checked phone records for communications between the phones for trainers Marks and Brainard and the Brooks brothers phones on that race date.
For example, on May 23, 2009, there were 10 phone calls from Marks’ phone to the David Brooks phone. Marks was in Ontario as were the races under scrutiny. Bulletproof horse, Waffles & Cream, finished 3^rd^ but was placed second in the Upper Canada, winning purse money of $120,000. The calls from Marks’ phone were:
12:36 p.m., to David Brooks’ phone, 8 minutes.
5:23 p.m. to David Brooks’ phone, 9 minutes
6:38 p.m. to David Brooks’ phone, 3 minutes
8:32 p.m. to David Brooks’ phone, 3 minutes
9:10 p.m. to David Brooks’ phone, 1 minute
9:23 p.m. to David Brooks’ phone, 2 minutes
10:11 p.m. to David Brooks’ phone, 1 minute
10:37 p.m. to David Brooks’ phone, 1 minute
10:39 p.m. to David Brooks’ phone, 1 minute
10:39 p.m. to David Brooks’ phone, 13 minutes
Investigator Moffatt considered that by 10:39 p.m. the Upper Canada race was probably over, it being Race #7 at Georgian Downs. This was evening racing with start times varying track to track, about 6:30 p.m. 7:00 p.m. or 7:30 p.m. and rarely racing going beyond 11:00 p.m.
It is difficult to conceive how those May 23 calls could be anything but what they appear to be, that is:
From Josh Marks on his telephone
To David Brooks on his telephone
Relating to the racing activity of Bulletproof horses on that date.
If a probability test leads to the conclusion that those 10 calls on May 23 were to David Brooks and related to Bulletproof racing activity and the extent thereof, how much more probable is that conclusion supported by the 1151 calls from and to the Josh Marks and David Brooks phones. The same reasoning applies to the Tracey Brainard phone and David Marks phone with 173 calls. Similar conclusions, but of greatly reduced participation, are supported by the calls to and from Jeffrey Brooks’ phone to and from the Brainard and Marks phones. Jeffrey Brooks had licensee status and was entitled to participate in the racing activity. David Brooks had no such status. Why did David Brooks receive any reports? Why did he receive so many reports?
Investigator Moffatt provided similar detail for other race dates. Having, for purposes of demonstration, detailed the times and durations for May 23, subsequent testimony by Moffatt may be summarized as follows:
May 29 Racing 9 horses at Mohawk, Vernon Downs and Western Fair (London), won two Gold Finals, 2 X $65,000 = $130,000. 7 calls to and from David Brooks’ number (to or from Josh Marks’ phone). 0 calls to or from Jeffrey Brooks’ phone.
May 30 Racing at Pocono Downs, Vernon Downs and Mohawk, 10 horses; 27 calls to or from David Brooks’ phone and Josh Marks’ phone, 1 call to or from Marks to or from Jeffrey Brooks’ phone.
June 13, 2009 Racing 10 horses, Yonkers, Mohawk & Vernon, won one purse $210,925, another won $146,985. 22 calls to or from David Brooks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
June 27 Racing at Pocono, Vernon and Mohawk, Fan Hanover and North America Cup, 3 calls to or from Jeffrey Brooks’ phone to Josh Marks’ phone. 7 calls to or from David Brooks’ phone to Josh Marks’ phone. Won $340,000, $170,000 & $81,600.
July 18, 2009 Racing in the Canadian Breeders, Mohawk and Meadowlands Pace, 16 calls to or from David Brooks’ phone to or from Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone. Won $120,000.
July 25 10 horses racing at Mohawk and also in the Tarport at Meadowlands and Canadian Breeders; won $90,000, $45,000. 10 calls to or from David Brooks’ phone to Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
August 1 Vernon, Mohawk – 12 horses ad ins at the Meadows. 11 calls to or from David Brooks’ phone to or from Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
August 8 9 races, Vernon & Mohawk, Meadowlands; won $202,500, $100,000, $45,000. 9 calls to or from David Brooks’ phone to or from Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
August 16 9 races Confederation Cup at Flamboro; won $280,000, $140,000. 11 calls to or from David Brooks’ phone to or from Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
August 21, 2009 12 horses, Vernon and Mohawk; won $85,000. 6 calls to or from David Brooks’ phone to Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
September 22, 2009 Racing at Delaware, Vernon and Mohawk; 11 calls to or from David Brooks’ phone to Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone. Won $73,000 and $145,000.
October 2, 2009 Racing at Lexington, Vernon and Pocono; 13 races. 12 calls to or from David Brooks’ phone to Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
October 10, 2009 15 races, won $147,000, $65,000 and $32,500. 11 calls to or from David Brooks’ phone to or from Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
November 7, 2009 12 horses racing at Yonkers (Messengers Stakes and Lady Maude, WEG Gold Final OSS, Vernon and Dover). Won the Messenger $271,000, $20,000. 13 calls to or from David Brooks’ phone to Josh Marks’ phone. 0 calls to or from Jeffrey Brooks’ phone.
In timing, frequency and consistency, clustered around races for increased purses, those calls, if casual, would seem to be unwelcome in the context of trainer preparations for an important race. If the calls were a nuisance, a simple expedient would have been to turn off the telephone. If they were not a nuisance they would seem to have been with a person in authority. That person in authority hypothesis is supported by the fact that many of the calls were originated by Josh Marks’ phone.
In light of Josh Marks’ failure to attend this Hearing, there is no reference in these Reasons to investigative information provided by Marks to ORC Investigators. That information was briefly referenced in evidence. That information was hearsay. There was no evidence of necessity to admit it nor was there any collateral indication of reliability. That information would also be measured for reliability against the telephone records and the aforesaid factors relating to the Tracey Brainard reliability. No formal Ruling was sought on admissibility. In result that investigative information, although it found mention in the Record was fully discounted and ignored.
CLOSING SUBMISSIONS
In closing submissions it was contended that Travis Bowman’s training protocol was subpar because of substance abuse problems. That may or may not be so. If so, why not call evidence instead of asking the Panel to make a leap of faith.
The Administration referenced a change in Bulletproof’s withdrawal of funds policy from the WEG purse account. Uncharacteristic of earlier withdrawals, in October and November 2009, $630,000 was withdrawn. Balance remaining $800,000. Recent withdrawals had been May - $170,000, July - $200,000, August - $330,000, September - $250,000. Six weeks later, on January 17, 2010, David Brooks’ bail was revoked. That revocation resulted from prohibited movement of funds by David Brooks and his bondsman, Jeffrey Brooks as stated by the U.S. Court. Money at WEG would be one step further from seizure by U.S. Authorities. The WEG withdrawals were suspicious in terms of timing and movement of money but scarcely proof to the degree required. What is significant from review of that purse account is that a credit balance of one million dollars was not unusual. Funds to that extent would therefore be available in Ontario to apply against unpaid judgments and accounts for services by industry participants.
The Administration alleges that industry participants considered David and Jeffrey Brooks to be the owners of Bulletproof Enterprises. Such a finding would be of secondary significance. More important is the underlying conduct by each of the Brooks brothers which might tend to support such a conclusion. Demonstrative of the blurring of the separate identities of the Brooks family stables was the interchanging of funds and instructions, as was the case in the Spring Fling buy-back. Through his employees Nilgun Foley and Aaron Hendel, David Brooks arranged for Bulletproof funds to pay for VAE purchases while David Brooks had no declared interest in either of those stables. Tactical Armour OSS purse cheques were endorsed by David Brooks and deposited in the Bulletproof bank account, the former stable being owned by Terry Brooks, the latter by Jeffrey Brooks, with David Brooks having a declared interest in neither. A Bulletproof cheque was used by David Brooks to rebate the purse to Kawartha Downs. The original payment had been Kawartha to Perfect World as owner of the horse in question. In closing submissions the applicants contend that this payment by Bulletproof was a consequence of seizure of other bank accounts in the criminal proceeding. That closing submission is unsupported by evidence. A further blurring circumstance: - During his release from custody, David Brooks was obliged to remain at his Manhattan residence which was the address for Bulletproof Stable, ostensibly owned and managed by his brother, Jeffrey Brooks.
The Applicants make reference to a failure by the Administration to call certain witnesses. The Panel’s obligation is to decide on the evidence – not to speculate about evidence which was not called. With reference to the absence of testimony by Josh Marks, it is noted that Josh Marks is no longer an ORC licensee and is not subject to that form of compulsion.
In the administrative law setting, although subject to careful assessment, evidence may be received informally by telephone or even by letter as circumstances warrant or as the parties agree Section 15(1) S.P.P.A. For example the parties agreed that Tracey Brainard could testify by telephone and she did so. This same evidentiary access was available to the applicants. Upon closing of the Administration case, the applicant, Brooks, elected to neither give evidence nor to call evidence in any form. The Administration case was not challenged by sworn testimony. Reliance by the applicants was on the Hearing safeguards of onus of proof, standard of proof and any demonstrated weaknesses in the Administration case as adduced by testimony and cross-examination.
That the Administration evidence was uncontradicted by the testimony of witnesses adds nothing to the credibility or reliability of the Administration evidence. However, it assists the Administration in two aspects: Firstly, by the absence of such sworn contradiction or qualification. Secondly, the issue of an adverse inference arises as will be discussed in the following paragraph.
The gross scarcity of telephone activity with Jeffrey Brooks’ phone is significant, pointing towards a less prominent participation by Jeffrey Brooks. Clearly if the calls on David Brooks’ phone were to and from David Brooks, he must be seen as having a significant interest in the management of the racing enterprise. If it were otherwise, there was ample opportunity to set the record straight. That telephone evidence had no element of surprise. Jeffrey Brooks was available to explain. An inference may fairly be drawn that Jeffrey Brooks’ testimony on this issue would not have advanced the Applicant’s case. That inference tends to supports a conclusion of intervention by David Brooks, large scale, systematic and controlling, in this racing enterprise while he was unlicensed and under suspension.
The evidence of David Brooks’ criminal activity is admitted in these proceedings against Jeffrey Brooks and Bulletproof, as relevant to the circumstances leading the ORC Executive Director to proceed by Immediate Order of Suspension and Notice of Proposed Suspension. That relevance is to the probability that Jeffrey Brooks, with the knowledge of that devious criminal activity, was so massively allied with his unlicensed and suspended brother that he would probably fall below the integrity standards required by the ORC.
STANDARDBRED RULE 6.13.01
- Rule 6.13.01 provides:
“A horse shall not be eligible to be entered to, or start in any race, if owned or controlled in whole or in part, by a suspended, disqualified, unlicensed or ineligible person.” (underlining added)
If the telephone calls were from and to David Brooks and from and to Bulletproof trainers, Josh Marks and Tracey Brainard, and there is no contrary evidence, those calls become a tangible yardstick indicating the extent of David Brooks’ involvement with the Bulletproof stable. The timing of that involvement is centered around large-purse racing activity. When the money was on the line David Brooks demonstrated intense interest.
The primary relevance of David Brooks’ participation in the Spring Fling Sale related not to unlicensed activity with brood mares (no violation in itself) but rather demonstrating a dominant controlling participation in a large scale breeding operation that included horses that were foaled, trained and raced by Bulletproof – all of this long after his suspension and while he had no disclosed interest in Bulletproof.
Issues of “Hidden Ownership” and “Unlicensed Activity” with control “in whole or part” (Rule 6.13.01) are closely allied. Factors include:
The close family relationship in the ownership transfer of horses and stable.
The transfer of ownership of horses from David Brooks to family members was progressive and relentless. Undoubtedly his racing and criminal law investigations were also progressive.
The massive shift of horse ownership with no arms length characteristic. No evidence of valuable consideration of any kind was adduced. Whether there are outstanding family business obligations to David Brooks is undisclosed.
The continued “in tact” operation of the extensive racing operation notwithstanding the ownership transfer.
The pervasive dominance of David Brooks in the on-going racing and financial activity after his licensed status had been terminated and further participation prohibited.
The family licensing in Ontario was generally contemporaneous with the final days of the criminal proceedings against David Brooks.
Jeffrey Brooks’ knowledge of, acquiescence in, and active continuing support for David Brooks’ controlling authority on racing and business issues.
The missing link on hidden ownership of any horse is the absence of a money trail from the sale or operation of the stable leading to David Brooks. Absent that link, the ownership evidence of any horse is missing and so cannot be characterized as cogent, clear and convincing. However, all of the horses were registered to Bulletproof as owner.
The Luc Ouellette evidence demonstrates an on-the-spot critical racing decision made by David Brooks for the high purse OSS Super Finals. That decision was made long after David Brooks had lost his Ontario racing privileges. Jeffrey Brooks must, at some stage, have learned of that decision and acquiesced or agreed by virtue of the fact that Ouellette did drive. Ouellette was an impressive and compelling witness. His evidence was accepted as truthful, accurate and reliable.
Also accepted as truthful, accurate and reliable, is the evidence of the various industry participants as it relates to their interaction with David Brooks. That evidence was externally consistent from witness to other witnesses. There was no perceived internal taint of bias or ulterior motive. There was no contradictory evidence.
That David Brooks was repeatedly involved in controlling the management and operation of racing as well as the business decisions of that racing stable is abundantly supported throughout the evidence. That overt dominance and decision-making control was omnipresent through the breeding, training, racing and business operation. It extended to where the horses would race and to selection of trainers and drivers. It extended to settlement of accounts. It included reporting information instantly available following races, particularly for significant purses.
David Brooks’ direct controlling involvement with Bulletproof extended from his indictment until suspension of the Bulletproof licence. There was clear indication of Jeffrey Brooks’ knowledge of David Brooks’ involvement, for example, evidence of Jeffrey Brooks handing the phone to David Brooks and saying “talk to my brother” about racing or business issues. That Jeffrey Brooks was aware of that dominant controlling management status and encouraged, facilitated and promulgated that state of affairs amongst industry personnel dealing with the stable, is also abundantly supported by the evidence.
The telephone evidence is circumstantial evidence of David Brooks’ participation in Bulletproof racing activity but more than that, it is high quality evidence in terms of its own reliability. The telephone evidence is recorded fact, unexplained, unqualified and uncontested. Those telephone facts bear none of the inherent frailties associated with recollection – such as, error, inattention, misstatement or subjective influences. This adds strength to the totality of evidence supporting a conclusion that David Brooks was involved in Bulletproof racing to such an extent that Jeffrey Brooks was aware of and permitted and condoned that activity and exercise of control by David Brooks.
Accepting as truthful, accurate and reliable the mass of evidence identifying David Brooks’ ubiquitous controlling activity on behalf of Bulletproof what inferences may fairly and reasonably be drawn. Those inferences must be based on reason and common sense. They must not be speculation or conjecture.
That analysis proceeds as follows: David Brooks was indicted October 25, 2007, released from custody on bail January 3, 2008 and returned to custody upon revocation of his bail January 17, 2010. That revocation resulted from prohibited transfer and concealment of funds by David and Jeffrey Brooks. A reasonable inference as to David Brooks’ state of mind in that interval is: - With his freedom from jail in the balance, with the peril of forfeiture of his enormous posted bail, he assumed the risk of transferring money in violation of his release terms – and was detected. This bespeaks a value system in place at that time that made concealing money a top priority. In those circumstances and at that time there can be no altruistic explanation for his extensive involvement in the Bulletproof stable during its 2009 bonanza year winning 6.6 million in purses. This person, omnipresent, persistent and demanding was no ardent fan, no spectator. This entire circumstance bespeaks a financial interest in the stable or its operation undisclosed but of such magnitude as to confer control over the operation. That 33 of David Brooks’ 37 Perfect World mares were bought back at the Flamboro Spring Fling sale is a clear indication of intention by David Brooks to remain in racing although unlicensed. Why otherwise would he go through the charade of the sale simply to change ownership records? That buy back was on David Brooks’ instruction not on the instruction of the buyer, VAE LLC. He was in constant telephone communication with Timpano throughout the sale. His status was as the dominant and controlling decision maker throughout the process.
Entirely apart from the Spring Fling sale, David Brooks’ supervision was detailed and intense particularly for large purse races. His presentation to the industry was aggressive and abusive, not typical of a spectator enjoying the races.
The conclusion that David Brooks had an undisclosed financial interest in the stable is further supported as follows: Jeffrey Brooks was no neophyte. He had a long and active record in the industry with no suggestion that for some reason he now required help to manage the Bulletproof stable. Jeffrey Brooks had credentials indicating an ability to manage a large scale stable. In closing submissions his counsel cited his qualifications as follows:
Licensed by ORC July 18, 1983
Actively involved in racing for 30 years
Currently owns 63 horses. Previously owned 205 horses
Bred 57 horses
Been a member of 12 registered stables
Licensed as a trainer in 2002.
Mindful of the burden of proof and the standard of proof, it has been proven by cogent evidence clear and convincing that the Bulletproof racing operation was subject to extensive and continuing control by David Brooks. That control, intense, focused and omnipresent has been demonstrated by evidence from a variety of independent sources and in some measure by telephone activity. For the 15 race dates referenced in the telephone evidence, Bulletproof recorded formidable success – approximately 2.4 million dollars in purses; major victories in terms of money and prestige. On those dates the contact between phones Josh Marks to David Brooks (ostensibly having no interest in the stable) was 183 calls. The contact between phones Josh Marks and Jeffrey Brooks, ostensibly the registered owner of the Bulletproof stable, was 4 calls. Confronted with that highly improbably scenario credulity succumbs.
Whether as unpaid vendor or continuing hidden owner in whole or in part, the evidence cogent, clear and convincing proves that David Brooks had an undisclosed financial interest in the operation of the Bulletproof stable. That interest was of such magnitude that it extended across the entire racing and business operation. That financial interest, whatever its precise nature, was powerful indeed. Powerful enough to provide David Brooks with that authority and control which he repeatedly demonstrated – powerful enough to carry with it the acquiescence and support of Jeffrey Brooks.
David Brooks was the dominant force as repeatedly demonstrated by his dealing with the racing operation and as acknowledged by Jeffrey Brooks by word and conduct. The ultimate decision making authority and thereby control rested with David Brooks.
The precise nature of David Brooks’ financial interest cannot be determined on this evidence – but it need not be.
There clearly has been a violation of Rule 6.13.01 – “A horse shall not be eligible to be entered to, or start in any race, if owned or controlled in whole or in part, by a suspended, disqualified, unlicensed or ineligible person.” The violation is so pervasive that no analysis of the expression “in part” is necessary.
RULE 3.09
- Rule 3.09 provides:
“The Director may suspend the license of any licensee who has accumulated unpaid obligations relating to racing, become bankrupt, or otherwise displayed financial irresponsibility reflecting on the sport. No such action shall be taken unless and until the Director is presented with a judgment or judgments from a court or courts having competent jurisdiction over the matter and the Director is satisfied that the participant is indebted and has been adjudged a debtor in a matter relating to Standardbred Racing in any of its forms. In the case of a licensee who has become bankrupt, the Director may license such participant to work for wages for another licensed participant. However, the bankrupt licensee may not carry on his/her trade or calling as an independent business or operate as a public stable without the permission of the trustee in bankruptcy and the Director.”
- The financial difficulties experienced by Dr. Hennessey, Dr. Rubenstein, Travis Bowman, Paul Reid, Rod Boyd, Mike Timpano, Travis McKay and Wayne Preszcator have been referenced. As well there were unpaid judgments by Courts of competent jurisdiction against Bulletproof as follows – all relating to racing activity and all demonstrating financial irresponsibility reflecting on the sport:
Halton Equine invoice - $14,106.39 in 2011, most recently claimed to be $18,463.44
Doyle Bloodstock Transport - Small Claims Court judgment total $34,585.63 March, 2010
Anderson & Gooderow Vet Clinic (Dr. Scott Anderson) judgment March 30, 2012 - $13,519.14 + $110 costs.
Dr. Murray Bonshor Veterinarian judgment Sept. 2010 - $78,692.00 + $3,916 costs
These unpaid judgments are in violation of Rule 3.09.
RULE 6.20
- Rule 6.20 provides: “A participant shall be guilty of a violation of the Rules:
a) For any misconduct which is injurious to racing although not specified in these rules;
b) For any misconduct prejudicial to the best interests of racing; or
c) For committing or attempting to commit any other act injurious to racing.”
The financial responsibility rule (3.09) is triggered by Judgments in Court. Misconduct prejudicial to the best interests of racing and acts injurious to racing are not premised upon Court judgments. Disputes over trade accounts, which did not proceed to judgment do not prove money owing. They do prove controversy over the amounts or obligation to pay.
Aylmer Veterinarian, Dr. Wayne Carroll, rendered service to Bulletproof through the Preszcator Stable. He threatened to proceed to judgment for his unpaid account but settled for a reduced amount.
Dr. Sadovsky, a New York state veterinarian, contacted the ORC in February 2010 about his attempts to collect an unpaid account of about $9,800 from David Brooks for professional services. Sadovsky reported that David Brooks had threatened to have his neck broken. Shortly thereafter David Brooks was arrested in the U.S. The account was said to remain unpaid. There is a report from Jeffrey Brooks’ lawyer in a civil action for recovery of debt. The lawyer claimed to the ORC that Jeffrey Brooks threatened to kill him. These reports found there way into evidence but being unsubstantiated hearsay they were accorded no probative value. They are mentioned here only as a matter of record.
Apart from the Dr. Ken Armstrong/Jeffrey Brooks incident earlier mentioned (where the mare died) there was no evidence that any of the unpaid accounts were objected to as excessive, beyond any agreement between the parties or above industry standards. There was no cross examination suggesting that any of the trade accounts which were unpaid were improper. None of the trade accounts to which objection may have been taken were produced and filed in evidence. The only objection seems to have been that the horses were not racing to subjective expectations by the Brooks brothers.
The testimony describing the Bulletproof tactic of late and reduced or no payment originated from multiple witnesses who presented as independent from each other, credible and reliable. That inventory of unpaid accounts goes beyond happenstance. The pattern constitutes circumstantial evidence indicating deliberate conduct to create controversy over accounts and through that controversy and delay to negotiate discounts.
In closing submissions it was contended that Bulletproof operated on a large scale and paid many accounts without controversy. If Bulletproof seeks a finding of a history of paying accounts as they became due, an evidentiary base is the beginning. Ample opportunity to provide such an evidentiary base was available and unused. Apart from the Tracey Brainard evidence which was highly suspect, no evidence was offered in support of that hypothesis. Neither industry tradesmen nor Bulletproof personnel testified to that effect. Undoubtedly the racing operation was extensive. How it operated in other jurisdictions is irrelevant – and unknown. The submission of prompt and full payment to others in this or other racing jurisdictions cannot succeed. In passing, it is noted that the unpaid account owing by Perfect World to Dr. Hennessey is against that submission. That account was paid about ten years later and under a form of duress seeking further access to Dr. Hennesey’s professional services for Bulletproof horses for a high profile race. The Panel is constrained by the evidence and must not engage in speculation and conjecture. How Bulletproof operated in Ontario was clearly demonstrated by evidence across the spectrum of the industry.
In closing, the applicants contend for additional results unsupported by direct evidence:
That the Bulletproof cheques to Preszcator and Boyd that could not be cashed were clerical errors. The circumstantial evidence is not sufficient to support that conclusion. Two elements are against that contention – Firstly, writing a cheque is not that difficult. If it was beyond the competence of Bulletproof staff that business was in bad shape. Inexperience may be argued for the person who wrote the cheque but absent evidence not for the person having signing authority for Bulletproof.
Secondly, that the uncashable cheques happened in different time frames with different trainers. Either cheque could have been covered immediately and with no difficulty by funds to Bulletproofs credit in the WEG purse account.
The trainers, veterinaries and a farrier were subjected to financial bullying tactics, creating a dependency by the substantial arrears thereby creating pressure to settle for reduced payment rather than lengthy and expensive litigation which even if resulting in judgment may not result in payment. As cited in evidence, payment in full was made in response to some type of duress such as a possessory lien being enforced against the horses.
That conduct, premeditated and sustained, must be and is found to be injurious and prejudicial in violation of Racing Rule 6.20.
FORFEITURE OF PURSES
Regarding eligibility to race, the applicants contend that eligibility is determined before the horse races. The ORC protocol regarding substance abuse is against that contention. Substance abuse tests are on bodily fluids taken post race. A positive test results in disqualification and purse redistribution – all because the presence of the prohibited substance at race time renders the horse ineligible to race.
The forfeiture of purses is not a “clawback” after the fact as characterized by the applicants. The proper analysis is that the horses controlled by an unlicensed and prohibited person are not eligible to race. If they do participate in a race by reason of deceit or fraud, the owner of the ineligible horse has no status to claim entitlement to purse money. That the breach of racing rules had yet to be identified, investigated and proven is no panacea for a fundamental and incurable lack of eligibility.
Rule 6.13.01 is clearly against the applicant’s “clawback” contention. The horse is not eligible “to be entered or to start in a race if controlled in whole or in part by a suspended, disqualified, unlicensed or ineligible person.”
Rule 6.26 of the Rules of Standard Bred Racing provides: “A participant obtaining purse money through fraud or error shall surrender or pay same to the Commission upon demand and she/he shall be suspended until such demand is complied with. Such purse money shall be awarded to the party justly entitled.” Many other participants in these one thousand plus races were deprived of their full purse entitlement by the promulgated deceit or falsehood that Jeffrey Brooks controlled Bulletproof without any control in whole or part by David Brooks. That is fraud.
OSS INCENTIVES
The Panel is asked through the Director’s Notice of Proposed Order to make a ruling that any money, being other than purse money, currently held by the OSS program to the credit of Bulletproof Enterprises or Jeffrey Brooks be forfeited to the OSS program. This issue received at best cursory attention in these proceedings in terms of both evidence and argument.
The Standardbred Improvement Program is a component of the Ontario Horse Improvement Program administered by the ORC which offers incentives for the breeding and ownership of standardbred race horses in Ontario. Benefits from this program are available for:
Breeders of Ontario sired and Ontario bred horses racing in the OSS (Ontario Sires Stakes).
Ontario (resident) breeders of OSS purse winning horses.
Breeders of Ontario bred purse winning horses racing in selected open stakes.
Owners of Ontario sired horses racing in the OSS.
There can be no entitlement to OSS benefits or Breeders incentives arising from racing activity which by virtue of this Ruling resulted in disqualification. Any such sums are hereby forfeited by Bulletproof and Brooks and will remain as, or revert to, and be the property of the Ontario Sires Stakes program.
COST RECOVERY
- The ORC cost recovery jurisdiction is found in Section 18 (3) RCA 2000 which provides:
“The applicant shall pay the reasonable costs of the inquiries or investigations or provide security to the Director in a form acceptable to the Director for the payment.”
In ORC v. OHHA 2013 ONSC 2069, the Divisional Court offers an Obiter and non-binding opinion expressing uncertainty and caution about the proper application of Section 18(3). This caution is premised upon the restrictive use of the term “Applicant” in the Section which relates to licenses and renewals and has no express reference to recovery of investigative costs.
The underlying rationale for cost recovery is that if alleged racing related misconduct imperils the public interest in racing, that conduct must be investigated, identified and examined for proof, or otherwise, through the Hearing process. There is no valid reason why public funding must underwrite the entire cost of that response to wrongdoing. It is fair and equitable that the wrongdoer bears an appropriate portion of the cost burden. The amount of the cost recovery should be fair and equitable premised upon the nature of the wrong-doing, the circumstances of the wrong-doer and the penalty imposed.
The Panel is of the view that since the Section authorizes imposition of a penalty it must be given a restrictive interpretation. The plain meaning of the words in the Section relates to costs incidental to investigation as a prelude to issuance of licenses or renewals. The Section does not purport to deal with investigative costs relating to rule violation issues. The Panel has no authority to expand the scope of the Section. As the Statute currently stands, the Panel has no jurisdiction to make an Order for recovery of any portion of investigative costs relating to rule breaches.
THREATS
Threats attributed to David Brooks have no relevance to the issue of a claimed threat by Jeffrey Brooks. The threat evidence by David Books was relevant to the nature and extent of his participation in the racing enterprise. That participation was to the extent of attempting to negotiate reduced payment of accounts for trade services by such extraordinary means.
In the course of the evidence, a threat to have Rod Boyd’s house burned was attributed to Jeffrey Brooks.
That the words of the threat were spoken by Jeffrey Brooks as attributed is accepted – more difficult is their proper assessment. Analysis of the true nature of Jeffrey Brooks’ utterance proceeds as follows:
There is neither suggestion that the threat was made in jest nor that it was characteristic of the speaker;
There is no comment by Jeffrey Brooks by way of denial, explanation or mitigation;
The threatening statement was not followed by overt action, attempt or repetition by Jeffrey Brooks;
The threat was said to have been made in the context of the threatened party (Rob Boyd) threatening to report Jeffrey Brooks to police or the FBI;
No complaint was made to police or racing authorities by Boyd. No remedy was sought. Boyd heard the threat first hand. There is no indication that it was taken seriously or seen as a matter of concern.
The “threat” issue should be governed by two elements: Firstly, the words spoken. Secondly, the intent with which they were spoken. To support a breach of the rule, the intent must have been that the words were intended to be taken seriously and thereby to be intimidating. The test is not subjective – it is not how they were viewed by the person alleged to have been threatened. The test is objective – would a reasonable person considering the words spoken and their entire context including the person to whom they were spoken have concluded they were meant to be taken seriously? If so, then there is a guilty intent.
- The evidence supports the finding that the utterance was made as posturing during an agitated telephone exchange of threatening words. The utterance is seen to be more in bravado than a bona fide statement which was intended to be taken seriously and thereby a breach of the Rule. The utterance, although demeaning and disgraceful, has not been proven to have the guilty mind component required for a rule breach.
PENALTY (SUSPENSION)
The ORC licensing authority is conferred by Section 7(c) Racing Commission Act 2000. The authority “to fix, impose and collect fines” is conferred by Section 7(k) Racing Commission Act 2000. No limitation on the amount is imposed. With degrees of punishment available, the principle is well established that the Panel has discretion as to imposition of those separate degrees of punishment. Accordingly there may be both fine and suspension.
Jeffrey Brooks’ rule violations inflicted harm on the industry in a variety of ways: Firstly, although he had no criminal record, he introduced across the face of Ontario racing, a criminal presence of fraud, deceit and dishonestly of remarkable dimension. Secondly, he introduced into the industry an unlicensed presence compounded by the fact that the person was under suspension and could not be licensed; Thirdly, he continued that state of affairs until he was shut down by ORC action.
The unlicensed participation rule (6.13.01) is fundamental for protection of racing integrity which is the well-spring for public confidence. Violation of that rule is a form of deceit and fraud, neither of which has a place in racing.
To imperil racing integrity is to imperil racing itself. A secondary consideration is that racing is in the dark days of a crippled funding model. Accordingly, racing is vulnerable. There is heightened necessity for racing to look to its own protection.
The value to be protected is the public interest in racing. The penalty must be as described in the Court system, that is “fit”. Penalty considerations were reviewed in the ORC Scott (COM SB 021/2007) decision and need not be re-stated here.
A secondary penalty element is that this wrongdoing deprived rule-abiding licensees of their lawful purse entitlements. In some measure this is corrected by disqualification of the horses racing in 2009 and 2010 and redistribution of the purse money currently subject to ORC seizure. Redistribution will occur only on the $890,000 currently withheld at WEG. About 5.5 million dollars in purses, in the two-year time frame having been paid out is not available to be redistributed. No Order was sought relating to those purses - a decision probably premised on futility and common sense.
Once the “unlicensed control” by David Brooks is proven to be in violation of the Rule, the hidden ownership issue of horses or stable loses much of its significance. Although hidden ownership would represent an aggravating factor, it may not necessarily increase the penalty. That penalty for all breaches should be globally assessed and findings of hidden ownership and unlicensed activity would arise from the same wrongdoing.
Based on the findings of the U.S. Criminal Court relating to fraud, deceit and dishonesty, David Brooks’ code of business ethics was sub-par by an impressive margin and beyond. Jeffrey Brooks gave David Brooks the opportunity to transport those standards into Ontario racing and to sustain that status until stopped by ORC Order. Jeffrey Brooks’ action was willful and with full knowledge of David Brooks’ prohibited status. Jeffrey Brooks was found by the U.S. Court to be complicit in the concealment and transfer of assets by David Brooks. Jeffrey Brooks must have had knowledge not only of David Brooks’ ethical standards but also his desperate circumstance which would increase the probability of misconduct by David Brooks.
With knowledge of David Brooks’ criminal activity and prohibited racing status, Jeffrey Brooks actively and flagrantly flaunted the licensing provision of racing by providing David Brooks with unlimited access to racing. That gross criminal presence was prominent across the leading edge of racings premier events.
The audacity of that brazen contempt for the Regulation of Ontario racing is a gravely aggravating factor in Jeffrey Brooks’ wrongdoing.
The scale of the wrongdoing is a material factor bearing on assessment of penalty. This wrong-doing is unprecedented in magnitude, both in terms of amounts involved and the number of persons injuriously affected by being deprived of their lawful entitlement. The amount of his bail, set at $400,000,000, (four hundred million dollars) reflects the gravity assessed by the Court having jurisdiction.
The dominant penalty component is general deterrence. Like-minded licensees must be made aware of the gravity of the offence and its dire consequences. Denunciation must be clear and emphatic. Specific deterrence is not a major component in light of the long term suspension.
When the principal victim of wrongdoing is the integrity of the industry and thereby the industry itself, stern response is necessary - For examples, baseball experience with the 1919 Black Sox bribes and the Pete Rose gambling issues. Both resulted in lifetime suspensions. However, rehabilitation is a legitimate component of penalty as the sought-after consequence of specific deterrence. On that basis the suspension must be long term but short of lifetime. In relation to the livelihood factor, there is no suggestion in the evidence that Jeffrey Brooks earns his living either in whole or in part from horse racing in Ontario or elsewhere.
The Director’s suggested penalty does not limit the Panel’s discretion. There is authority in the Panel to increase either the suggested suspension or the suggested fine. No notice that an increase was being sought was provided to Jeffrey Brooks. No submissions were required or made regarding increased penalty. Accordingly, the Panel has not addressed the issue of increasing the penalty identified in the Director’s Notice. Had notice of application for increased penalty been served, the Panel would have given serious consideration to a fifteen year suspension.
Mindful of the 10-year suspensions imposed by ORC Panels for EPO Drug violations, and mindful that in the EPO violations and in this case the victim at risk is racing integrity, the 10-year suspension proposed by the Director can neither be nor be seen to be excessive.
PENALTY (FINE)
- The issue of a fine involves various considerations. Two factors bearing on the amount of the fine are:
Unlike criminal law, there can be no peril of imprisonment on default;
By Section 743(2) of the Criminal Code of Canada “A Court fine an offender only if the Court is satisfied that the offender is able to pay the fine or discharge it …”.
That principle of ability to pay need not be transported from criminal law to the Racing Commission but it remains as a powerful and practical consideration. The issue of ability to pay is troubling. Whether the financial aftermath of David Brooks’ activities extends to Jeffrey Brooks and to what extent, is unknown. Jeffrey Brooks’ current financial status is undisclosed. The Panel ought not to operate upon unsupported assumptions about Jeffrey Brooks ability to pay. Enforcement of the fine may create a formidable hardship. If the Administration seeks a large fine payable now, it should provide at least a skeletal evidentiary framework on ability to pay. Absent a discovery process it may be difficult for the Administration to provide evidence about ability to pay a fine.
There is circumstantial evidence of prosperity surrounding Bulletproof:
160 mares in the breeding operation;
over 400 race horses;
6.7 million dollars in purses in 2009 and a brief time in 2010;
a background of long term high level racing participation;
uninterrupted stable activity during the interval leading up to the suspensions;
the major acquisition of horses by Jeffrey Brooks following David Brooks’ licensing difficulties raising the question of acquisition costs and thereafter major operational costs;
there was no large scale divestiture of racing stock by Jeffrey Brooks which could have indicated hardship;
there was no sign of Jeffrey Brooks reducing his operation.
That peripheral evidence of ability to pay is skeletal but accepted as adequate.
The exercise of discretion in fixing the amount of the fine must be reasonable. To place the quantum proposed in perspective it need only be compared to the 6.7 million dollars in purse money. A Real Estate Agent’s commission based on six percent of a 6.7 million dollar sale would be $420,000 (four hundred and twenty thousand dollars). In determining the amount of the fine:
The fraud imposed on the industry and industry participants was massive in the amount of the purses and the number of individual victims who were deprived of purse money;
An aggravating factor is that the fraud stopped only because of ORC intervention;
A typical multi-victim offence may be found in environmental law where huge fines may be imposed;
The evidence relating to the June 27 telephone records place the amount sought in perspective. On June 27 racing at Pocono, Vernon and Mohawk, Bulletproof won $340,000, $170,000 and $81,600, total $591,000.
As well the applicants had advance notice of the amount suggested and had opportunity to call evidence if the amount is claimed to be excessive. No such evidence was called. Having regard to the gravity of the offence, the amount of the purses wrongfully won during this extended unlicensed activity, and the number of persons deprived of their legitimate purse entitlement in those 1025 races (1004 and 25 in 2009 and 2010 respectively), the $400,000 fine suggested by the Director is appropriate.
In passing it is noted that there are ORC precedents for abatement of the fine upon proof of hardship, extension of time for payment and scheduling interim payments. The purpose of these procedures is to safeguard against a fine becoming an abuse by being an improper impediment to licensing after a suspension has been served. Pending any amendment to the Racing Commission Act to permit recovery of investigative costs, this exercise of discretion to abate fines may be a forum in which recovery of some measure of investigative costs could be a factor.
The suggested $100,000 fine for Bulletproof carries the peril of being or being seen as a duplication, essentially one wrong-doing with two penalties. The two fines would be for the same delict by the same guiding mind, that being ORC licensee Jeffrey Brooks. If the $400,000 fine is a fit penalty, then there is no place for the $100,000 fine. Justice should be done and as well should be seen to have been done. Accordingly, there will be no fine imposed on Bulletproof. The real remedy in protecting racing is the long term suspension.
Given the global assessment of penalty, no protracted analysis of the remaining Rule violations is required. As a matter of record comment is made as follows:
Breaches of the financial responsibility Rule in relation to the outstanding Court judgments have been proven to the required standard (Rule 3.09). The judgments are by courts of competent jurisdiction and relate to racing industry activity and are proven to be still outstanding. The financial abuse found in violation of Rule 6.20 carries no separate penalty (misconduct injurious and prejudicial).
Rule 1.09 (best interests of racing). This has been adequately dealt with under Rule 6.20. No finding is made.
Rule 6.13.02 (transfer while suspended). No specific evidence – no finding.
Rule 6.13.03 (bona fide transaction). No specific evidence – no finding.
Rule 6.13.04 (nomination – suspended). No specific evidence – no finding.
ORDER
- An Order will issue:
(1) Confirming the ineligibility of these horses to race and to compete for purse money and disqualifying as ineligible the horses raced by Bulletproof in Ontario in 2009 and 2010 as follows:
LIST OF INVOLVED HORSES
Horses Raced in 2009
A Filly to Fear
Kato Not Now
Ala Carte Bill
Lisdean
Amazon Art
Little Gold Ring
Babylon Sister
Live Free or Die Hard
Betting Terror
Lord Terror
Big Lead
Marietta Hall
Blind to See
Michael Dee Miami
Blue Suede Shoes
Model Magnate
Bouncing Hanover
Moving In Together
Bridled Terror
Need A Job
Bring Home Hinda
No Gain
Brooklyns Best
Not Enough
Candy Hall
One More Drink
Cannae Cammie
Oscar Oscar
Change the Locks
Overwhelming Shae
Cheap Motel
Paris the Heiress
China Art
Penthouse View
Cinderella Guy
Political Terror
Cold Chills
Power Off
Comache Hall
Private Splendor
Coming Late
Professor Jeff
Coming on Time
PW Love
Cuz She Can
Pw Roma Lover
Dangerous Years
PW Tootsie
Did It Again
PW True to You
Doctor Seth
Rescue Plan
Dome on a Rock
Revolutionary Foe
Don’t Give Up
Riggins
Drink Up
Runaway Energy
Electric Energy
Sandy Annir
Everyday
School Kids
Everyone Counts
Sexy Grin
Fashion Week
Shacked Up
Fast Standing Still
Short Words
Final Curtain
Showherthemoney
Four Starz Credit
Six Pistol
Front Cover
Slow Service
Go Shuffle
Straight Shooting
Gotta Travel On
Terroronthebeach
Great Vodka
The Life Boat
Heard It
Thinkingonlyofyou
Higher and Higher
Vertical Horizon
Iamperfectright
Victim of Love
Ideal Race
Waffles and Cream
If I can Dream
Western Comedy
In Da Club
Western Thorn
In Sight
Whin I call
In the Studio
White Sand
Island Terror
Withheld Info
It Hurts Me
Yellow Diamond
It Was An Honor
You Don’t know Me
Just Coming
Youkeepmehangingon
Kabbala Karen B
Horses Raced in 2010
Amazon Art
One More Drink
Big Lead
Power Off
Blue Suede Shoes
Revolutionary Foe
Cheap Motel
Riggins
Cinderella Guy
Runaway Energy
Ideal Race
School Kids
Marrietta Hall
Waffles and Cream
(2) Any purse funds by those horses currently being held under ORC Order SB 14/2010 will be forfeited by the Applicants and redistributed amongst the owners entitled pursuant to the Rules of Racing.
(3) The licensing privileges of Jeffrey Brooks and Bulletproof Enterprises shall be and are hereby suspended for ten (10) years from January 26, 2010 being the date of the Immediate Suspension Order which has remained in effect.
(4) A fine of $400,000 due forthwith is imposed on Jeffrey Brooks to be paid or settled before Brooks or Bulletproof is relicensed in any capacity by the ORC.
(5) Any OSS benefits which would otherwise accrue to Brooks or Bulletproof will be forfeited to the OSS program in consequence of the disqualification of those horses by this Order.
(6) No Order is made for recovery of investigative costs.
- In passing and strictly as obiter, for benefit of WEG or the Administration, in the Panel’s opinion if there are garnishments filed against either the seized purse money or Breeder’s incentives relating to the Judgements against either Jeffrey Brooks or Bulletproof, such garnishments are of no force and effect. On the basis of this decision the Applicants’ horses were not eligible to race because of the aforesaid unlicensed controlling activity. Accordingly at no time did the Applicants have any entitlement whatever either to purse money or OSS Breeder’s incentives of any kind. Thereby there was no interest to garnishee. Absent agreement, authoritative disposition on this issue must be by the civil courts. One final obiter – To the Industry, Thank You - signing off. J.D.
DATED this 29^th^ day of August, 2013.
____________________________
James M. Donnelly
Former Vice Chair
Rules referenced herein:
Rule 1.09 If any case occurs which is not or which is alleged not to be provided for by the rules, it shall be determined by the Judges or the Commission as the case may be, in such manner as they think is in the best interests of racing. Provided however, the Commission in its absolute discretion may waive the breach of any of the rules, which waiver or breach the Commission does not consider prejudicial to the best interests of racing.
Rule 3.09 The Director may suspend the license of any licensee who has accumulated unpaid obligations relating to racing, become bankrupt, or otherwise displayed financial irresponsibility reflecting on the sport. No such action shall be taken unless and until the Director is presented with a judgment or judgments from a court or courts having competent jurisdiction over the matter and the Director is satisfied that the participant is indebted and has been adjudged a debtor in a matter relating to Standardbred Racing in any of its forms. In the case of a licensee who has become bankrupt, the Director may license such participant to work for wages for another licensed participant. However, the bankrupt licensee may not carry on his/her trade or calling as an independent business or operate as a public stable without the permission of the trustee in bankruptcy and the Director.
Rule 6.13.01 A horse shall not be eligible to be entered to, or start in any race, if owned or controlled in whole or in part, by a suspended, disqualified, unlicensed or ineligible person.
Rule 6.13.02 If a suspended, disqualified, unlicensed or ineligible person purports to transfer his or her interest in a horse during such period of ineligibility, the judges may enquire into any transfer in order to ensure that the racing of a horse is not under the control or influence of the transferor.
Rule 6.13.03 During such an enquiry the Judges may require the submission of documentary evidence to establish that the transfer is a bona fide transaction. Such documentary evidence may consist of, but may not necessarily be limited to, a statutory declaration relating the following facts:
I. That the transferee maintains separate books and records relating to the racing of his or her horses and all money earned from racing or used for the payment of debts relating to racing is neither deposited to a joint account or paid from a joint account of the transferor,
II. That the transferee is responsible for his or her own obligations and liabilities incurred in the course of his or her racing business and such obligations are paid from the transferee’s separate and independent account.
III. That the transferee contracts independently of the transferor with any tradespeople, with any other entity and with the Association at which he/she is racing.
IV. That the transferee maintains a wholly and independent financial interest from the transferor.
V. That the transferee conducts his or her business relating to the racing of Standardbred horses in a manner wholly independent of the transferor and neither the transferee nor the transferor influences the other in any matter whatsoever with respect to the racing of Standardbred horses.
Rule 6.13.04 In the event a nomination or entry is made by or for a suspended person or horse, the owner of the horse shall be held liable for any nomination, sustaining or starting fees thus contracted and the horse shall not be eligible to compete.
Rule 6.17 A person, at any time or place, shall not against any official or participant:
a) Commit assault or battery;
b) Threaten to do bodily harm;
c) Use insulting, offensive or improper language; or
d) Be guilty of any improper conduct.
Rule 6.20 A participant shall be guilty of a violation of the rules:
a) For any misconduct which is injurious to racing although not specified in these rules;
b) For any misconduct prejudicial to the best interests of racing; or
c) For committing or attempting to commit any other act injurious to racing.