According to the website legaldictionary.com, wire fraud is “the crime of using an interstate wire, television or radio communications, or the Internet, in order to defraud someone.” In the case of Rojas, purse money in the races Rojas’ horses contested was paid by interstate (and it has to be interstate to trigger federal jurisdiction) electronic transfer of funds, and this was enough to trigger the federal charge. But make no mistake – if the feds wanted jurisdiction, they had to come up with a violation of a federal crime, and overages in race horses of veterinary medications haven’t made it into the United States Code. So they had to get creative and decided on wire fraud.
When the first mail fraud act was passed in the late nineteenth century, there was a proliferation of get-rich-quick schemes and shady land deals, usually promoted by city slickers, to separate rural rubes from their money. Fleecing someone was a crime, but the federal government cleverly made fleecing someone through the mail a whole other crime. The obvious extension of the mail fraud law was to make wire fraud equally illegal. This originally covered the telegraph and the telephone but eventually everything where communication is through the hard lines or air (it’s no longer just wire fraud), including the internet. These federal laws are pretty handy when authorities are targeting substantial crimes like racketeering and money laundering, but certainly more of a stretch for something like paying the winner’s share of a purse with a check from an out of state bank, especially when the “fraud” was ostensibly gaining an advantage by illegally dosing medications. I suppose you can argue somebody got defrauded – perhaps the connections of the second place finisher and the people who bet on that horse to win – even if it was only indirectly. Of course, it would seem that by the letter of the federal law, if Rojas had committed the same offense at Parx, she wouldn’t have been charged with wire fraud because the bank used to pay the purses at Parx is in Pennsylvania.
That begs the question, if an act at one track can be considered federal wire fraud, and the exact same act at another track wouldn’t be considered federal wire fraud, were the feds overreaching when they charged Rojas with wire fraud? And it further makes one wonder whether the federal fraud statute was appropriate as the primary law enforcement tool for dealing with therapeutic medication overages at racetracks primarily governed by the state they are in. Like a lot of laws, often the breadth of how the law should apply becomes a function of the creativity of the prosecutor. Even so, do we really believe the Congress of the United States actually anticipated the wire fraud law to apply in cases like Murray Rojas?
After reading an editorial from Ray Paulick in which he speculated on the motivations of the HBPA in this matter, I spoke with Eric Hamelback the CEO of the national HBPA about why the HBPA contributed to Rojas legal defense. Hamelback was very clear that HBPA financial support was not about “enabling,” as Paulick suggested, the kind of violations of which Rojas was accused. It was because the HBPA was legitimately concerned that if the wire fraud charges stuck based on getting a purse distribution check from an out of state bank, then there was no violation that couldn’t be considered wire fraud, at least at tracks where purse checks were drawn on an out of state account. In a sense, the feds were looking to make new law with regard to violations of drug/medication thresholds. Overage of Ranitidine? Overage of phenylbutazone? Both could be considered wire fraud based on the thinking of the feds with regard to Rojas. Whether or not you like the HBPA position, it seems clear they had a legitimate concern, not “preposterous scaremongering” as Paulick suggested. It takes very little imagination to stretch the decision the feds made on wire fraud to include any violation that results in a purse being fraudulently paid.
Hamelback was direct in saying that the HBPA has always been in favor and supportive of penalizing those within the racing industry who break or abuse racing’s regulatory rules, and while there are some who won’t see any difference between defending Rojas from an overreaching federal government and defending Rojas’ actions to try to gain an edge, the HBPA position was not an attempt to find ways of having trainers like Rojas wiggle out from underneath punishment for the misuse of therapeutic medications.
Even if you believe the states have done a less than sterling job of cleaning up racing, you have to ask yourself if the answer is federal prosecution for wire fraud. There will certainly be an element who agrees with Paulick when he says
“I understand why enablers like Mostoller and Hamelback rejoiced when the jury found Rojas not guilty on seven counts of wire fraud and conspiracy. They are hoping the FBI will turn tail and let horse racing return to policing itself. They must believe the status quo was working just fine before the feds showed up. And maybe it was, for the cheaters and crooks, but not for honest horsemen, and certainly not for the betting public. This is a shameful chapter in the history of the HBPA.”
and they will miss the point just as Paulick did. Even if HBPA was pleased that the decision on wire fraud went their way, to imply there was some sort of sticking-it-to-the-fans rejoicing at HBPA over the decision was ridiculous. The characterization that this was somehow part of an HBPA effort to enable scofflaws to get off the hook is plainly off base. HBPA believed the feds had overreached when they applied the wire fraud statute and it turns out that based on a jury comprised of regular people they were right. The message was not that the FBI should turn tail, but that you charge trainers with the appropriate crime and adjudicate it in the appropriate jurisdiction, and if they are found guilty you give them the appropriate punishment. Paulick made the classic mistake of conflating a stance on a point of law with carte blanche support for the alleged lawbreaker. To use the word shameful is not even close to the HBPA position on Rojas.
Paulick could have done his due diligence and talked with Eric Hamelback (as I did) about the Rojas decision and he would have found out what I did. He also could have stayed to the end of the trial instead of leaving after the prosecution was finished presenting its case, and perhaps that would have given him a complete perspective on why Rojas chose to fight the wire fraud charge. Instead he chose to attribute to HBPA feelings (rejoicing) and motivations (covering for violators) that were off the mark. If the HBPA was satisfied with the verdict, it was because no other trainer will have to worry about a federal felony for any overage of a legal therapeutic medication.
If Paulick and others believe the states have proven themselves incapable of standing up to the horsemen, there are plenty of steps they can take before settling on creative federal prosecution. For one thing they could get people on racing commissions who know what they are doing, spend a lot more time on proactive enforcement of the rules, and don’t have close personal relationships with the people they are supposed to regulate. But you can be assured the Murray Rojas situation could never have proliferated if the stewards and the racing commission had been more vigilant. Pennsylvania is as much to blame for the involvement of the feds as the problem trainers are.
If the feds are the answer, then change the laws to put them in charge, but until then, how about we try to make the current system work the way it is supposed to.
