Belknap County suit links track to gambling operation



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Convictions key in AG's probe The partnership that owns Lakes Region Greyhound Park directly funded establishment of the International Players Association, according to documents filed March 4 in Belknap County Superior Court. Federal prosecutors have tied - but not charged — the IPA operation to a massive gambling conspiracy involving tax fraud, horse doping and organized crime Attorney General Kelly Ayotte earlier this month cited that lawsuit - the second lawsuit resulting from a family dispute concerning control of the Belmont track and IPA - in her recommendation to the New Hampshire Pari-Mutuel Commission in pulling the racetrack’s license from New Hampshire Gaming Association, the limited partnership that owns the track. NHGA is “not fit to be associated with racing in New Hampshire,” Ayotte wrote in a letter accompanying her report to the Pari-Mutuel Commission, adding that the IPA was “intimately connected” with the track. Ayotte also said the license should be pulled because the NHGA hired several people with previous gambling convictions, a violation of state law, and because one of the firm’s partners was not cooperating. (See sidebar.) The commission is expected to conduct a preliminary hearing on the matter in the coming weeks, but the process should drag out for months. The NHGA released a statement after Ayotte’s comments were made criticizing what it called her “rush to judgment,” which could result in the “demise of the NHGA’s license to operate … resulting in the lost of at least 65 jobs and causing significant economic harm to the Lakes Region.” But thanks to a family squabble, the existence of the track was already in jeopardy. A legal dispute in Belknap County Superior Court involves NHGA general partner Al Hart and Joan Hart, the widow of his brother, Robert Hart Sr., who was trying to transfer her 50 percent interest in NHGA to the spouses of her sons, Richard Kenneth and Robert Hart. Joan Hart transferred a third of her interest to Richard’s wife Denise in 2003. But Al Hart - or rather Hart Pari-Mutuel of New Hampshire Inc., his corporate entity — went to court in September 2004 to prevent a partial transfer to the other spouses, Lisa and Donna Hart (the wives of Kenneth and Robert, respectively). That suit came shortly after their husbands filed suit in Merrimack County Superior Court demanding an accounting of ownership of the IPA. After Joan Hart refused an offer by Al Hart to buy out her interest, he asked the court to dissolve the partnership, with a hearing set for March 23. Links to IPA Perhaps even potentially more damaging to the track are revelations in documents accompanying the suit that have been used - or could be used — by federal and state investigators and regulators. For instance, in public statements, General Partner Al Hart has said that the IPA was independent of the racetrack and that the track had nothing to do with the central charges against Richard Hart, and his assistant general manager, Jonathan Broome. Richard Hart and Broome have been charged as acting as a conduit between Euro off-track, an offshore gambling operation located on the Isle of Man, and the Uvari Group, which allegedly includes three members of the Gambino crime family, in a massive gambling conspiracy involving tax fraud and horse doping. Both have pleaded innocent. Al Hart said that neither he nor the track has had anything to do with the alleged conspiracy, and in any case nothing the accused did was illegal under federal law. Yet a check for $15,258.58 from NHGA to the law firm of Cook & Molan was drawn to cover numerous meetings and telephone calls - one taking place at the track itself - that were aimed at setting up IPA and its agreement with Euro off-track, according to the law firm’s invoice sent to Lakes Region Greyhound Park. According to the firm’s invoice, the NHGA payment covered “Meeting at LRGP with partners Re: Euro Off-Track,” “initiate organization of IPA,” “IPA specifically in relation to (Isle of Man) gaming licensing requirements” and “review partnership agreement with Al Hart.” The NHGA even paid for the IPA’s filing fee with the secretary of state. In addition, the lawsuit cites an e-mail purportedly from attorney Michael McLaughlin of the Cook & Molan firm, asserting that the “Gaming association has loaned money to the IPA to capitalize the project. That money is carried as a receivable on the NHGA’s books.” “In addition,” wrote Joan, Donna and Lisa Hart in their March 4 filing in response to the Hart suit, “Allen E. Hart used NHGA funds to pay IPA’s ongoing costs and as of October 31 nobody had made any capital contributions apart from the funds advanced to IPA by NHGA.” They added: “Moreover, Allen E. Hart personally benefits from an ownership interest in IPA, and actively instructed his attorneys to shut out all other members of the Hart family.” Al Hart, in his original complaint — and in an earlier letter to the Pari-Mutuel Commission — said that the transfer violated a section of the licensing agreement that prevented transfers that “adversely affect the partnership.” “Any disruption or interference in the business operation of the track … could result in the immediate rescission of the track’s license to operate and destroy this viable ongoing enterprise,” he argued. But the defendants denied that the transfer would damage the track. They argued that it was inconsistent to just hold up the transfer to two brothers’ spouses and let the other one go through. 'Ministerial tasks’ In their response to the suit, the defendants also argued that IPA was “established to expand the business of NHGA, LP and serve the customers of NHGA, LP to conduct telephone and Internet-based sports and pari-mutuel wagering through an offshore and/or ‘island entity’ incorporated in the Isle of Man.” Depriving the defendants of their “rightful share” of the “corporate opportunity of NHGA” was causing the disruption, the defendants charged, as well as thwarting Joan Hart’s intentions of transferring her interest. As for accusations that he was controlling the IPA, Al Hart argued that it was his corporation, not he, who had the power to make decisions. The connection between IPA and Hart Pari-Mutuel is at the heart of Ayotte’s conclusion that it was the track itself - not just specific employees - that was involved in the gambling conspiracy. The attorney general did not address whether the entire gambling operation itself was illegal, as charged in the federal indictment. Rather, Ayotte maintained federal law prohibits wiring money, even in a legal gambling operation. Federal law allows pari-mutuel gambling information to be sent from one state to another state, or even another country, when gambling in both places is legal. But Ayotte claimed that the track was sending money over the wires as well, in violation of federal law. Ayotte also cited a Merrimack County lawsuit - first reported in detail by New Hampshire Business Review in its Feb. 4-Feb. 17 issue - in which Kenneth Hart asserted that the racetrack partnership, including Al Hart, was a partner in IPA. In addition, Ayotte said that other track employees - not just Hart and Broome - were involved in financial transfers and other IPA business, such as receiving telephone calls, keeping IPA books and “performing other ministerial tasks.” “Such high-ranking LRGP employees through IPA, the existence of IPA at LRGP, the ownership of NHGA and LRGP being largely similar … demonstrate that NHGA is not fit to be associated with racing in New Hampshire,” wrote the attorney general. Edit ModuleShow Tags