Diamonds in the Rough - by Lenny Shulman

aspradling — Tue, 04 Oct 2011 15:02:00 GMT

September 28 was widely hailed as the greatest day of action in Major League Baseball history, quite amazing since it featured only regular season games as opposed to the playoffs or World Series. Yet, with four teams attempting to squeeze into two post-season berths, the sudden reversals of fortunes and late-inning heroics that lifted Tampa Bay and St. Louis while crushing Boston and Atlanta captured the attention of a nation that had long forsaken the pastoral “national pastime” for the violent collisions of the National Football League. It is not overstating the case to say that careers were made (hello Tampa Bay’s Evan Longoria) and lives changed (goodbye Boston’s manager Terry Francona) in the span of a few fateful minutes.

Perhaps on a smaller scale but in its own emphatic way, Thoroughbred racing enjoyed a thrilling climax to its “regular season” (excepting the three weeks of Keeneland yet to come) the weekend of Oct. 1-2 in the final tune-ups for the Nov. 4-5 Breeders’ Cup World Championships. We witnessed awe-inspiring performances, dramatic comebacks, and tissue-grabbing human-interest stories as top-shelf racing worked its magic on us from the scenic turf of Longchamp to the muddy majesty of Belmont and the sun-splashed palms of Santa Anita. If this is just the regular season, the championship round a month hence will be tough to wait for.

The idea of male dominance in the handicap division has taken a series of body blows over the past two seasons as Rachel Alexandra and Zenyatta worked their ways to the head of the class, defeating the boys and copping the last two Horse of the Year trophies. To prove this could be more of a trend than a fluke, Havre de Grace, merely a top-notch 3-year-old filly a year ago, took another step toward proving she has evolved into a full-out monster this season, winning the grade I Beldame Stakes Oct. 1 as though it were an exhibition at a county fair. She defeated the boys in the Woodward Stakes (gr. I) last out with equal dispatch—much easier than Rachel two years ago—and although owner Rick Porter was playing it coy post-race, it will be a major upset if she is not turned loose against males in the Breeders’ Cup Classic (gr. I) considering her current form.

Flat Out, impressive in taking the same day’s Jockey Club Gold Cup (gr. I), is a horse that is impossible not to like. Besieged by injuries early in his career, he has patiently waited for his moment and has now seized it. His crooked blaze reminiscent of his grandsire, A.P. Indy, who enjoyed some glory over the Belmont strip, Flat Out obviously has the heart of a warrior. And he has another intangible: His 70-year-old trainer “Scooter” Dickey, who hails from a dot on the map called Anthony, Kan., was enjoying his first grade I victory after 48 years of saddling horses. Think he’ll be popular around Louisville in the coming weeks?

And what would sports be without the classic comeback story? Joining the battle in the Classic will be Uncle Mo, the champion 2-year-old of last year who, instead of being tested in the Kentucky Derby Presented by Yum! Brands (gr. I) five months ago, was in a clinic being tested for a rare liver disease. Uncle Mo flashed his brilliance once again in the Kelso Handicap (gr. II) at Belmont and will have yet another shot at the golden ring under the Twin Spires.

Need a dose of Bob Baffert in the Classic? No problem. He’s got Goodwood Stakes (gr. I) best Game On Dude and third-place Coil to add some West Coast seasoning to the burgoo.

Although 2011 for months on end was beset by mediocre racing, the Classic is all of a sudden shaping up as one of the best in years.
And the other divisions are in good shape as well. European-bred Stacelita, who has battled stalwarts Midday and Sea The Stars across the water, is obviously all class as she showed once again in the Flower Bowl Invitational Stakes (gr. IT) as she prepares for the Emirates Airline Filly & Mare Turf (gr. IT). Creative Cause is tearing up the 2-year-old scene in California, and juvenile filly Weemissfrankie is only three-for-three with two grade I victories and a track record so far.

And then there is the queen of the TVG Breeders’ Cup Mile (gr. IT), three-time winner Goldikova, who showed she was merely mortal in her final race in her native France, losing a head decision to Dream Ahead in the Oct. 2 Qatar Prix de la Foret (Fr-I), the penultimate battle of her phenomenal career. Has she lost a step? Would it matter if she has? Can she make it four in a row?

Wouldn’t it lift the soul if baseball and Thoroughbred racing can both mount spectacular comebacks?

Less Than Classic - By Dan Liebman

Blood-Horse Staff — Wed, 04 Nov 2009 18:45:00 GMT

You would think Eileen Mayer never heard of P.T. Barnum.

Mayer is Chief of Internal Revenue Service - Criminal Investigation. Her job involves overseeing probes into claims of tax fraud. Barnum, of course, was the famous 19th century master of hoaxes, founder of the outfit that would become the Ringling Bros. and Barnum & Bailey circus, and the man erroneously credited with saying, “There’s a sucker born every minute.”

After three principals of the former ClassicStar horse breeding operation—David Plummer; his son, Spencer Plummer; and accountant Terry Green—were reported last week by the U.S. Department of Justice as having pleaded guilty to charges of defrauding the United States, it was Mayer who said, “Investment schemes that seem too good to be true should be a signal to individuals to stay clear.”

Furthermore, Mayer said, “The IRS is actively pursuing promoters who market these tax-evasion schemes.”

P.T. Barnum was a self-proclaimed promoter. So, too, was David Plummer, who founded ClassicStar and recruited investors to participate in the company’s mare lease program. A release from the government about the guilty pleas said Spencer Plummer “assisted David Plummer in the operation of the mare lease program,” and Green assisted investors by “preparing and filing income tax returns on which they reported fraudulent deductions” and “assisted customers in their IRS audits by creating false and backdated documents and presenting them to IRS auditors,” the government alleged.

The information presented in the government’s case by the justice department claims participants in the ClassicStar mare lease program filed tax returns with the IRS claiming false tax deductions of more than $500 million, resulting in a tax loss to the government of more than $200 million.

Other allegations against ClassicStar include: lacking sufficient mares to fulfill its obligations to investors and at times substituting Quarter Horse mares; providing loans to investors through National Equine Lending Co., said to be an independent company but actually owned by ClassicStar; and often, at the conclusion of an investor’s participation, having the outstanding loan “extinguished through fictitious trades involving an entity that purportedly owned interests in coal bed methane gas wells” through ClassicStar’s parent company, GeoStar.

ClassicStar began buying mares earlier this decade: $4,171,000 for 15 mares in 2001; the leading purchaser by money spent in 2002 and 2003, with 27 mares for $17,535,000 in 2002, and $13,570,000 for 20 mares the following year; and $9,835,000 for a dozen mares in 2004.

It didn’t take long for things to unravel.

In 2006 ClassicStar’s Kentucky farm was raided by federal agents, as was David Plummer’s Buffalo Ranch in Utah. Later that year a group of ClassicStar mares was sold at auction for $20.8 million. The following year 48 ClassicStar mares were purchased for $9.8 million by John Sykes of Cloverleaf Farm in Florida, who would also purchase ClassicStar’s Central Kentucky farm in partnership. The money was used to pay creditors.

In September 2007, ClassicStar filed for Chapter 11 bankruptcy protection; court documents listed claims from more than 200 persons totaling nearly $1.4 billion.
Numerous civil suits alleging fraud involving ClassicStar and its practices are still pending. Newspaper reports have said the Plummers and Green, who each face a maximum sentence of five years for conspiracy to defraud the government, are cooperating in the continuing investigation.

It is hard to imagine anyone who makes his living breeding Thoroughbreds fully believed the veracity of the mare lease program’s claims that were the underlying principle of ClassicStar.

People have been breeding horses for many years, and there are many intelligent and experienced attorneys and accountants who handle nothing but equine accounts. They are well versed in the tax codes as they apply to breeding and racing horses, including those leased from one entity to another.

Eileen Mayer is an experienced attorney herself, and as she said, if it sounds too good to be true, it probably is.

What's Going On Here : ClassicStar

Diamonds in the Rough - by Lenny Shulman

Less Than Classic - By Dan Liebman