- Horse Racing - Real-life $3 million 'Sting' lands three in federal court

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Wednesday, November 13
Real-life $3 million 'Sting' lands three in federal court

WHITE PLAINS, N.Y. -- Prosecutors called it a real-life version of "The Sting'' -- an insider exploiting a hole in computer security to create a can't-lose horse racing bet worth more than $3 million.

Glen DaSilva
Glen DaSilva leaving New York District Court last month.
Three former fraternity brothers were charged Tuesday with conspiracy to commit wire fraud in the Oct. 26 bet on six Breeders' Cup races in Illinois.

The complicated wager "was changed after the fact to turn it into a $3 million winner,'' said U.S. Attorney James Comey.

"They bet that law enforcement would not catch them, but that's a bet they could not fix,'' he said.

Derrick Davis of Baltimore, Glen DaSilva of New York and Chris Harn of Newark, Del., all 29, face a prison term of up to five years on the conspiracy charge. Comey promised an indictment within a month that would have "a broader range of charges'' and stiffer prison time.

The former Drexel University frat brothers, of Tau Kappa Epsilon, surrendered to the FBI Tuesday. All were released on $200,000 personal bond, though Davis and DaSilva tested positive for cocaine and were ordered to undergo random drug testing, said Michael Kulstad, a spokesman for the U.S. attorney's office.

Lawyers for all three said they were innocent.

Asked if the alleged scam was worthy of Hollywood, Comey said, "The movie was already made, but with much better-looking people _ Paul Newman and Robert Redford.''

Comey said the fictional "Sting'' and the Oct. 26 bet had one thing in common: the victims "got taken by a similar idea _ that there was a delay between the race and the reporting.''

He said Davis placed a Pick Six bet on the prestigious Breeders' Cup races using his automated, unrecorded telephone account at the Catskill Regional Off Track Betting Corp. To win the Pick Six, a bettor has to pick the winner in each of six races.

After the first four races were run, Harn, an employee of the Autotote company that handles most of the racing industry's computer wagering, allegedly accessed Davis' Catskill account to alter the bet, Comey said.

Because not all the six races had been run, there was "a window that was available that allowed Mr. Harn to manipulate the bet because the data didn't have to be transmitted until after the fourth race,'' he said.

By the time the bet was reported to the racetrack, the computer record showed Davis had picked the winner in each of the first four races and had spread his bet in the last two races to cover every horse, so he couldn't lose.

Because long-shots won several of the races and no one else had picked all the winners, the payoff was huge _ and suspicious, Comey said.

"Those moneys were embargoed, and an investigation was begun immediately,'' he said.

That investigation found that DaSilva had placed similar bets by telephone on races earlier in October that generated smaller but still substantial payoffs _ more than $100,000. Investigators believe those bets were dry runs for the Breeders' Cup bet.

Harn was fired Oct. 30.

Comey would not say whether any of the three had made statements that support the charge or whether there were witnesses. He acknowledged that most of the evidence made public was circumstantial but added, "I'm not worried about being embarrassed on this one.''

He said there was no allegation of organized crime involvement.

Michael Hoblock, chairman of the New York state Racing and Wagering Board, said the investigation had turned up "a number of deficiencies and vulnerabilities on the part of the tote system. ... The racing industry needs to take the next step, and that is to ensure that the appropriate controls are in place to ensure the wagering public that this cannot and will not happen again.'

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