By Michael Morton
The pleas were not expected to have a direct effect on plans to install slot machines at Aqueduct, an effort that has not yet come to fruition.
Clement Imperato of Brooklyn and Vincent Hogan of Saratoga Springs, N.Y., were each charged with conspiracy to defraud the United States, the U.S. attorney's office in Brooklyn said. They face up to five years in prison, three years of supervised release, a $250,000 fine and restitution.
Their sentencing is scheduled for Sept. 10 in federal court in Central Islip, L.I.
The guilty pleas “illustrate the significance of NYRA's management's role in the tax evasion scheme,” said Andrew Hruska, acting U.S. attorney for the Eastern District, which covers Queens and Long Island. “This prosecution demonstrates the government's continuing commitment to exposing fraud aided by corporate management and to ensuring that NYRA operate in a manner consistent with the law.”
NYRA is a non-profit corporation licensed by New York state to operate three horse racing tracks: Aqueduct; Belmont, home to the Belmont Stakes leg of the Triple Crown; and Saratoga Race Course in Saratoga Springs, N.Y.
State Attorney General Eliot Spitzer investigated the NYRA from 2000 to 2003, and issued a report documenting alleged cases of money laundering, illegal gambling and income tax fraud. Spitzer reported that the corporation had a $50 million deficit by the end of 2001, due largely to mismanagement.
Imperato and Hogan were accused of facilitating a scheme in which tellers at the NYRA's tracks would report at the end of the day that they had come up short in their register cash count. The tellers would pay back the track out of their pockets, but claimed the payments were non-reimbursed employee expenses on their IRS returns, in effect avoiding taxes on a large part of their salaries.
In addition to the two men, 21 tellers pleaded guilty to similar charges earlier this year and last year. Those living in Queens at the time included James Boggiano of Howard Beach, Barbara Fasone of Rockaway Park, Gerald Pontrelli of Whitestone, Charles Bonanno of Jamaica, David Lee of Flushing, Robert Lodati of Bayside, Robert Mecca of East Elmhurst, Charles O'Connell of Flushing, Donald Patterson of Jamaica and Richard Simonson of Middle Village.
Pontrelli will be sentenced July 23 in the same court as the directors, while Boggiano and Fasone will be sentenced July 30. The status of the others could not be determined.
As an organization, the NYRA reached an agreement in December with the U.S. Department of Justice to defer prosecution. The corporation was required to replace its senior management, consult with the IRS about accounting, make its financial records available to the public, pay $3 million in fines and work with an independent monitor appointed by the court. If the NYRA cooperates, charges will be dropped in June, 2005.
The deal was expected to allow plans to continue for the installation of 4,500 slot machines, also known as video lottery terminals, at Aqueduct. In April 2003, Gov. George Pataki announced the potential $100 million deal, the first of its kind in the city, and MGM Mirage, a private hotel and gaming company in Las Vegas, entered into negotiations with the NYRA to run the machines.
Spitzer's office previously told TimesLedger that MGM got cold feet because of the state probe, delaying the project. The deferral of prosecution, however, paved the way for the effort to recommence, Hruska later told the TimesLedger.
MGM and the NYRA did not return calls seeking comment.
State Assemblywoman Audrey Pheffer (D-Rockaway Beach), whose district includes Aqueduct, said the slot machine plan is proceeding. An environmental review of the proposal has been completed and state legislation authorizing the terminals has been passed, she said.
The main obstacle, she said, is that NYRA's contract to run the tracks is up in 2007, and MGM may wait to see if the state Legislature passes an extension.
Pheffer has spoken with MGM and NYRA officials and said the investigation was never a factor in the slot machine project.
“They never said the criminal probe delayed work,” she said.
Reach reporter Michael Morton by e-mail at news@timesledger.com or by calling 718-229-0300, Ext. 154.
