Jury sends mixed signals in Everest Stables lawsuit against Canani, Licht

  • click above & share!
    X
  • click above & share!
    X


  • click above & share!
    X
  • click above & share!
    X

It was a case that could have been a storyline for an episode of the short-lived HBO horseracing series “LUCK.” Trainer Julio Canani – on whom the fictional “LUCK” role of the cagey horse trainer Turo Escalante is said to have been modeled – and attorney Roger Licht, a former chairman of the California Horse Racing Board, were found by a jury to have conspired to defraud Minnesota businessman and horse owner Jeffrey Nielsen when he decided in 2008 to sell the California-based horses in his Everest Stables.

The jury in the federal lawsuit sent mixed signals, however, when it awarded Nielsen just $48,750 in actual damages and $50,000 in punitive damages – a fraction of the $1-million-plus Nielsen sought when he filed the civil complaint in December 2009. The awards are certainly less than the legal fees Nielsen compiled pursuing the matter over the last several years.

Trainer A.C. Avila and Dubai Sheikh Mohammed’s Godolphin Racing originally were named as co-defendants in the case, but United States District Judge Dale S. Fischer of California’s Central District ruled last year in favor of their individual motions to be dropped from the complaint. Avila had purchased the stakes-winning horse Two Step Salsa from Nielsen for $1.4 million, then sold him to Godolphin for considerably more. Nielsen’s complaint said Avila defrauded him by not disclosing that he was acting on behalf of Godolphin, but the judge threw that portion of the case out.

The Paulick Report originally detailed the Everest Stables lawsuit in an April 2011 article, “Flipping Horses For Profit?” The suit alleged that Canani tricked Nielsen into selling a number of horses for less than they were worth, at times deceiving him that the buyers were third parties when in fact Canani’s own company, Tarma Corp., purchased some of the horses and quickly re-sold them for a profit. It alleged that Licht was a willing participant in Canani’s scheme to buy two of the horses, with Canani loaning Licht $350,000 for the purchase, and that the two men would split the profits on the re-sale – Canani getting 75% and Licht 25%.

The jury found that Canani, acting as agent for Everest Stables, breached his fiduciary and agency duties by misrepresenting details concerning the horses’ physical condition and by misrepresenting and concealing his actual role with fraudulent intent in order to convince the owner to sell a number of horses for prices lower than their value. The jury also found that Canani did “unlawfully conceal and misrepresent his role and involvement with respect to Tarma Corp. or misrepresent with fraudulent intent the true physical condition” of six of the horses sold.

According to the complaint, Canani told Nielsen Tarma Corp was owned by David Milch, the creator of HBO’s “LUCK.” A deposition from Milch, who has employed Canani as a trainer but is not a principal of Tarma Corp., was entered into evidence at the trial, which lasted eight days.

Licht was found by the jury to have conspired with Canani to fraudulently induce Everest Stables to sell two horses for lower prices, aiding and abetting Canani to breach his fiduciary and agency roles, and “unlawfully conceal or misrepresent with fraudulent intent the nature and extent of Canani’s role and involvement in Licht’s offer and purchase.”

For all of that, though, Licht may only be required to pay $1,562.50 in actual damages, representing 25% of the damages assigned to Silent Stalk (the jury found Nielsen sustained zero in damages on Lady Lumberjack, the other horse the complaint said Licht purchased in concert with Canani).  Canani is responsible for the balance of the damages – $47,187.50.

Licht, who represented himself in the case, said he has filed a motion with Judge Fischer to have the punitive damages dropped because of a “United States Supreme Court decision that says punitive damages can be no more than equal to the actual damages.” His 25% portion of the $50,000 punitive damage assigned by the jury would be $12,500.

“I’ll have my motion heard by the judge to have the punitive set aside,” Licht told the Paulick Report. “Assuming that will happen, then I’ll pay (Everest) his one-thousand whatever dollars. I don’t see how I could feel any way but happy” to go through a lengthy trial and be responsible for such a small amount in damages.

Before the trial, the judge ordered the parties into mediation, but attorneys for Nielsen would not accept anything less than $1 million in damages, Licht said.

Canani’s attorney, John V. Gaule, did not reply to a phone message.

A member of the jury who contacted the Paulick Report and spoke about the trial on the condition of anonymity said the damages represented a compromise within the eight-member jury to avoid being hung after deliberating for more than two days.

“Two wanted to award zero damages,” the juror said. “A couple of them wanted it to be just a few thousand dollars, and four wanted to award between $200,000 and up to $371,000. We compromised big time. It was difficult for me and several others  because we were convinced there was guilt. It was dumbfounding. (Canani) made $155,000 flipping those horses.

“A couple of the jury members didn’t understand what fiduciary responsibility meant or the role of agents. We didn’t really hear anything in the case regarding fiduciary obligation. There were 28 questions to come to a consensus on, and it wasn’t done easily.”

The juror continued: “Some people believed Canani, who I think was destroyed on the (witness) stand. A few of the people felt the owner’s testimony (Nielsen) was rehearsed and sided against him because he was a wealthy businessman. We all agreed he should have done more due diligence because of the conflict of interest. Selling these horses was going to take $30,000 a month out of Canani’s pockets he would have made training them. There were plenty of red flags the owner should have seen.

“I’ve been to the track here and there, but didn’t know much,” the juror added. “I know more now than I ever wanted to know. People need to be aware that everybody is out to line their own pockets.

“There ought to be more regulations, more contracts, especially if trainers are going to act as agents, as they obviously do – despite Canani saying over and over, ‘I’m not an agent, I’m not an agent.’ There are a lot of unspoken, unsaid things that ought to be more concrete to protect an owner. It’s owner beware as far as I’m concerned.

“The winners in this case were the lawbreakers, the shady shysters who were out to make a buck,” the juror said. “They saw an opportunity and they got away with it. As a juror it wasn’t my responsibility to state the clear and convincing case. We tried, but it was the lawyer’s responsibility to do that.

“What surprised me the most was the lack of written contracts between the owner and trainer and the lack of due diligence on the owner’s part. He’s got a lot of money and now he’s upset that he was taken to the cleaners here, but he knew the business was shady. Why wouldn’t he get that?”

Thomas W. Pahl, attorney for plaintiff Everest Stables, declined to comment on specific questions about the case but issued the following statement:

“In the past several months, we have received several inquiries from reporters inquiring about our claims against Roger Licht and Julio Canani.   As is my policy on litigation, we have not responded pending certain milestones.  Those milestones are now present.  Last week, on June 28, 2012, in the United States District Court for the Central District of California in Los Angeles, California, a jury of 8 persons found attorney and former chairman of the California Horse Racing Board, Roger Licht, and California horse trainer Julio Canani, to have engaged in fraud, concealment, conspiracy, and breaches of fiduciary and agency duties as well as breaches of the duties of good faith and fair dealing.

“Both Canani and Licht were also found to have been unjustly enriched by their actions and conduct.  In addition, Roger Licht was found to have aided and abetted Canani to breach his fiduciary and agency duties to Everest Stables by unlawfully concealing Canani’s role and involvement, or assisting in misrepresenting the horses’ physical condition in order to convince Everest Stables to sell certain horses to Licht at lower prices.  The plaintiff in the case against Licht and Canani was Everest Stables, Inc.

“Over the span of less than two weeks’ time, Canani, a trainer and agent of Everest Stables for 18 years, obtained title to eight horses and forged a secret pact or arrangement with Licht in purchasing two other horses owned by Everest Stables, by first lying about certain of the horses’ physical condition to Everest, and then concealing the true identity of the buyer and source of funds in an effort to drive down the prices  and gain control of the Everest horses for himself.

“The jury also found that Licht conspired with Canani to purchase two of the horses in Licht’s name, lying about and keeping Canani’s role and involvement silent, even while Canani loaned him $350,000 in a undocumented transaction and transfer of funds made to allow Licht to complete the purchase of the horses.  Canani flipped several of the horses very quickly, some even on the same day as the purchases from Everest, to other of his long-term clients.  Canani made substantial profits on these flips without disclosing to his other clients, the purchase price or the circumstances by which he obtained title to these horses.

“Everest Stables was only able to learn of and expose Licht and Canani’s illicit conduct through the legal process of filing claims and conducting discovery.

“Licht and Canani were not only found liable for the offenses as noted above, but the jury awarded money damages to Everest.  Equally, and perhaps even more important for the public’s interest, the jury found the two defendants’ conduct to warrant the imposition of punitive damages, finding that Licht and Canani acted with malice, oppression or fraud against Everest, or in reckless disregard of Everest’s rights.

“Everest Stables Inc.  is also pursuing claims against Crestwood Farm in Lexington, Kentucky, and Pope McLean, Sr., Everest Stables’ farm manager and agent for over fifteen years.  Everest Stables’ claims against Crestwood Farm and Pope McLean, Sr. are awaiting final judgment from the United States District Court for the Eastern District of Kentucky and certain appeals are forthcoming.

“Interestingly, both actions and the defenses raised by Crestwood Farm, Pope McLean, Sr., and Canani are similar in that they each claim, in the case of Canani’s relationship
with Everest for eighteen years, and Pope McLean Sr.’s representation of Everest for fifteen years, neither party owed Everest Stables any agency or fiduciary duties, duties of loyalty, duties of candor and full disclosure, and that they could freely compete with their long-time client, whether Everest knew about their competing postures or denial of fiduciary duties, or not. For its part, Everest Stables claims it had no idea that these equine assets were at risk in this way with its long-time representatives and agents.”

To read the official jury verdict, click here.

New to the Paulick Report? Click here to sign up for our daily email newsletter to keep up on this and other stories happening in the Thoroughbred industry
  • Tinky

    Excellent reporting, Ray. 

    Anyone who reads this carefully should no longer have any excuse for being naïve about the business.

  • Tinky

    Excellent reporting, Ray. 

    Anyone who reads this carefully should no longer have any excuse for being naïve about the business.

  • stillriledup

    I think this comes down to the owner not knowing the value of his own horses. If you want to be an owner in this game, you have to be a racing expert and know every nook and crannie of this business. Its really a catch 22 for some of these rich owners because the more time you spend in your own real life business making money, the less amount of time you can spend ‘studying’ the sport of horse racing.

    You just have to hope the person you are ‘in bed with’ is someone you can trust.

    It would be interesting to see the ‘back story’ as to how Everest stables got involved with Canani in the first place. Why him? Why Julio?

    New York is trying to basically kick Rick Dutrow out of the sport for ‘cheating’..will Southern California do the same with Julio?

    Im not sure what questions you have to answer on your trainers license exam in California, but i’m assuming that if you engage in fraud, they won’t license you and if you already have a license and commit fraud while a licensee, to me, that  seems that’s grounds for it being revoked.

    Would you revoke Canani’s license to train in So Cal or would you just let bygones be bygones?

    • Concerned observer

      If he had robbed a liquor store would he still have a license? Do we all  believe that stealing with the voice (his word) is less serious than stealing with a gun?

      You said “If you want to be an owner in this game, you have to be a racing expert and know every nook and crannie of this business.”

      Based upon that premise, no one could own a house, a car or a stock portfolio. That is why laws of fraud, dual agency, and fiduciary responsibility are in place. Should the horse business be exempt?   Why?  Why is telling the truth so difficult for some horse  people? 

      This is one reason why we are having so much trouble attracting new owners….our reputation preceeds us.

      • stillriledup

        I think that horse ownership is different because the value of a horse can really be anything you want it to be…much like fine original art from a famous painter. If someone wants to pay 10 mil for a picasso and someone else thinkts its worth 100  million, than its worth 100 milllion. Since Two Step Salsa wasnt for sale on ‘ebay’ there was only one person looking at the horse, the value could be any number that Canani wants to put on the horse.

        Im not saying that Canani is innocent and what he did is acceptable, im just saying that its much harder to price a racehorse than it is to price a house or a car.

        If it was up to me, Julio’s licence would be revoked…of course, i won’t hold my breath waiting for that to happen.

        Now, if Canani is guilty of fraud, who’s to say that he wont stick something inside his horses to make them go faster? Can you, as a bettor, really trust the integrity of the horse race if Julio Canani is training one of the participants?

        I know i’d be leery of betting a race where the name Canani shows up on the program.

  • interested observer

    Once again we find unscrupulous and deceiving people in the business taking advantage of an owner.  What difference does it make whether the owner was rich or poor, naive or not, the fact was that a jury of our peers found these two individuals guilty of something that should compromise their future in their respective careers.

    • Ferdinand 86

      Unfortunately, many folks who make their living  in the horse business think cheating their owners is part of the job description. These nefarious practices have occurred at the highest levels of the sport.
      Does anyone remember the fine trainer, Dick Lundy,who trained some great horses for Allen Paulson?He lost pretty much everything over some deals similar to the Canani situation;including his sale of Loach as a rabbit for Strike the Gold.
      Many years ago,KY’s highest court ruled in Marsh v Gentry that the horse business is full of cheaters and anyone who gets in it should watch their back.A sad commentary.I suspect as many ,if not more ,owners are driven from the sport by cheating trainers as leave because of liberal drug policies.

  • interested observer

    Once again we find unscrupulous and deceiving people in the business taking advantage of an owner.  What difference does it make whether the owner was rich or poor, naive or not, the fact was that a jury of our peers found these two individuals guilty of something that should compromise their future in their respective careers.

  • Chip Wiley

    But according to The Jockey Club, Phipps, Irwin, and Farmer, all that needs to happen to make the game perfect is to ban Lasix.  Ban Lasix, then nothing dishonest and untoward will happen, and public confidence will be restored. 

    • RayPaulick

      I can’t imagine there will be a more misinformed statement made today on the site…unless you can top your own sense of absurdity.

      • Jjvera62

        i think it was made w a hint of sarcasim ray.

  • Chip Wiley

    But according to The Jockey Club, Phipps, Irwin, and Farmer, all that needs to happen to make the game perfect is to ban Lasix.  Ban Lasix, then nothing dishonest and untoward will happen, and public confidence will be restored. 

  • Ace

    When Marty Wygod fired Julio I figured there was a trust issue.

    Always good to know that the former head of the CHRB is a crook.  Shocking.

  • RayPaulick

    I can’t imagine there will be a more misinformed statement made today on the site…unless you can top your own sense of absurdity.

  • Olebobbowers

    Canani was a bay mud and carrot deliverer for a Trainer named Paul Falkenstein back in the 60′s, before he became a ‘trainer’. He appeared so shady back then, I refused to buy from them, just to avoid his presence around my horses and equipment. How do you spell S H A D Y? Guessin owner Jeffrey Nielsen finally figured out how to spell it, but it took him 18 years? Go figure.

  • Olebobbowers

    Canani was a bay mud and carrot deliverer for a Trainer named Paul Falkenstein back in the 60′s, before he became a ‘trainer’. He appeared so shady back then, I refused to buy from them, just to avoid his presence around my horses and equipment. How do you spell S H A D Y? Guessin owner Jeffrey Nielsen finally figured out how to spell it, but it took him 18 years? Go figure.

  • Cliff

    Roger Licht has always been incompetent and has certainly been less than honest. During his tenure as the head of the CHRB, cheating and drug use was at it’s worst yet Licht was seen talking to “dirty” trainers and gambling at the windows all of the time. Licht was also implicated by the SEC on stock fraud in 1998 when his “daddy” Marty Wygod was starting a new company(http://www.sec.gov/litigation/litreleases/lr15666.txt), (http://www.sec.gov/litigation/litreleases/lr16062.txt),  (http://www.sec.gov/news/digest/1999/dig021799.pdf). Now this!! I am hopeful the California State Bar sees what a (deleted) Roger Licht is and he is disbarred. The guy has been a cancer in California for far too long.

  • Triplecrownquest

    Nobody would miss Canani or Licht if they were no longer in or around horse racing.  They are irrelevant…except in their own minds.

  • Bookie Buster

    The sad thing in my opinion is this isn’t a “one off” situation. Those named and shamed in the lawsuit certainly are not the only people double dipping at anothers expense.

    Almost as good as “ghost” claiming your own horse to send it to another trainer but that is another story for another time.

  • Triplecrownquest

    Nobody would miss Canani or Licht if they were no longer in or around horse racing.  They are irrelevant…except in their own minds.

  • Bookiebuster1

    The sad thing in my opinion is this isn’t a “one off” situation. Those named and shamed in the lawsuit certainly are not the only people double dipping at anothers expense.

    Almost as good as “ghost” claiming your own horse to send it to another trainer but that is another story for another time.

  • Kamulzeke

    Canani allegedly tried to do the same thing in the early eighties with a filly by the name of Hostage Lady. Fortunately the owner he tried to screw was able to smell a theif and ended up buying out his partner and transfering the horse to another barn. The mare ended up producing two graded stakes winners. He ought to change his name to Foolio Canani.

  • Kamulzeke

    Canani allegedly tried to do the same thing in the early eighties with a filly by the name of Hostage Lady. Fortunately the owner he tried to screw was able to smell a theif and ended up buying out his partner and transfering the horse to another barn. The mare ended up producing two graded stakes winners. He ought to change his name to Foolio Canani.

  • FE Davidson

    Ray,

    Thanks for bringing this to the surface.  The matters dealt with in the case are representative of what takes place daily in the industry.  The inherent conflicts of interest and backroom deals further undermine the integrity of the racing business.  Unfortunately, the industry typically views such a case as an isolated civil matter, not worthy of being addressed by the racing commissions or stewards.

    In this instance Canani should be disciplined by the CHRB, including a suspension or permanent revocation of his license.  Otherwise, there be no deterrent to this kind of fraudulent behavior.  For an example of previous inaction, just look at the Jess Jackson (Stonestreet Farm, LLC) case against Bruce Headley, et al.  Although Headley settled with Jess, the settlement, in my opinion, supported Stonestreet’s Fraud and Breach of Fiduciary Duty claims.  Yet, did the CHRB or stewards take any action?  No.  Their issues with Headley in 2007-2008 were focused on his failure to report the gelding of several horses.  Instead, Headley could and should have been suspended under any number of rules, including Rule1902, which states:

    “Conduct Detrimental to Horse Racing.  No licensee shall engage in any conduct prohibited by this division nor shall any licensee engage in any conduct which by its nature is detrimental to the best interests of horse racing….” 

    Will the CHRB suspend Canani due to this verdict?  Not very likely.  But what is likely, is the continuation of the fraud and deceit that pervades the industry on a daily basis due to the industry’s failure to act and failure to create affirmative deterrents to the midconduct.

    As to Mr. Licht, his conduct should result in disciplinary action by the California State Bar, which could and should include a suspension or disbarment.

    It’s time for a fresh start.  Join the revolution.

    • RayPaulick

      You make an excellent point about how the CHRB has the opportunity to use the “conduct detrimental to racing” clause. But don’t hold your breath.

      If the CHRB refused to take action against former trainer and currently licensed jockey’s agent Frank Monteleone for two separate cases of fleecing owners, board members and staff almost certainly will laugh off any questions pertaining to Julio Canani or Roger Licht’s fitness to retain CHRB licenses.

      Here are links to stories about Mr. Monteleone.

      http://www.paulickreport.com/news/ray-s-paddock/chrb-asleep-at-the-wheel/

      http://www.paulickreport.com/news/ray-s-paddock/judge-to-monteleone-stay-out-of-the-horse-business/

      There are some decent and honorable men and women on the CHRB board and staff. However, in my opinion, they do not care about the integrity of some of the people who participate in the business as licensees. 

      • Chip Wiley

        That is for sure !!! If the CHRB took no action in the Monteleone fiasco, how could anyone expect them to do anything in this case.  It is a drop in the bucket by comparison.  The Monteleone story is the most incredible read and shocking inaction  by a regulatory board maybe ever.

      • FE Davidson

        Ray,

        I recall the linked stories and cringe each time I read them.  I agree with you that there are some decent and honorable people associated with the CHRB, and I believe some of those people do care about the integrity of the participants.  However, until the board, as a whole, wakes up to the fact that by ignoring the misconduct of the cheaters and unscrupulous trainers, agents, etc., they are forcing many of us out of the industry, the future is bleak.  It’s hard enough to generate enough revenue to break even in the racing business, but it’s even more difficult to do so when those who play by the rules are forced over and over again, to compete with the cheaters and low-lifes.  The ripple effect of turning a blind-eye to the misconduct affects each layer of the industry, which is unfortunate, but a current reality.

        And, as we all know, this issue is not unique to CA.  It is pervasive across the country and impacts the financial well-being of all of us.  Hopefully, your efforts will awaken more people to the dirty little secrets of the industry and make it more difficult for the boards and commissions to continue to exist in blissful ignorance.  However, there will be no breath-holding on this end.

      • James D. Jimenez

        Hear, hear!!!

    • May Flower

      Why are so many successful businessmen and wealthy people leaving their brains at the racetrack gate and horse sales entrance and fail to protect themselves and their horses against ruthless trainers and agents with written contracts? The industry continues to do nothing to protect its precious owners and horses. It prefers to organize seminars in hope to recruit new owners to replace those who left in disgust by presenting a pretty picture of itself.

  • nanana

    As a frustrated jury member, I’m grateful to Ray Paulick, who listened attentively and wrote a great article that a lot of folks will read.  If I couldn’t award all the money I wanted to because of our deliberation system and the lack of common sense abundant in that room, then at least I’m comforted to know that certain names in the industry will be talked about as unscrupulous, disloyal, dishonest, and greedy lawbreakers with zero sense of right and wrong.  Kudos to Nielson for taking it to court and fighting for what’s right and bringing attention to the ‘agency responsibility’ laws.  Now I know why I didn’t care for LUCK by Milch….because there were NO sympathetic characters and they were based on the bunch I had to watch perjur themselves for days.  Canani said “I don’t remember” approximately 85 times during testimony.  Unfortunately, a couple folks on the jury fell for his I’m 75 years old…don’t remember what I had for breakfast act.  Whenever he began with, “Well, to be honest with you…”, you get the point.  

  • nanana

    As a frustrated jury member, I’m grateful to Ray Paulick, who listened attentively and wrote a great article that a lot of folks will read.  If I couldn’t award all the money I wanted to because of our deliberation system and the lack of common sense abundant in that room, then at least I’m comforted to know that certain names in the industry will be talked about as unscrupulous, disloyal, dishonest, and greedy lawbreakers with zero sense of right and wrong.  Kudos to Nielson for taking it to court and fighting for what’s right and bringing attention to the ‘agency responsibility’ laws.  Now I know why I didn’t care for LUCK by Milch….because there were NO sympathetic characters and they were based on the bunch I had to watch perjur themselves for days.  Canani said “I don’t remember” approximately 85 times during testimony.  Unfortunately, a couple folks on the jury fell for his I’m 75 years old…don’t remember what I had for breakfast act.  Whenever he began with, “Well, to be honest with you…”, you get the point.  

  • Scott

    Great article, Ray.  Thanks.

  • Scott

    Great article, Ray.  Thanks.

  • RayPaulick

    You make an excellent point about how the CHRB has the opportunity to use the “conduct detrimental to racing” clause. But don’t hold your breath.

    If the CHRB refused to take action against former trainer and currently licensed jockey’s agent Frank Monteleone for two separate cases of fleecing owners, board members and staff almost certainly will laugh off any questions pertaining to Julio Canani or Roger Licht’s fitness to retain CHRB licenses.

    Here are links to stories about Mr. Monteleone.

    http://www.paulickreport.com/n

    http://www.paulickreport.com/n

    There are some decent and honorable men and women on the CHRB board and staff. However, in my opinion, they do not care about the integrity of some of the people who participate in the business as licensees. 

  • Chip Wiley

    That is for sure !!! If the CHRB took no action in the Monteleone fiasco, how could anyone expect them to do anything in this case.  It is a drop in the bucket by comparison.  The Monteleone story is the most incredible read and shocking inaction  by a regulatory board maybe ever.

  • FE Davidson

    Ray,

    I recall the linked stories and cringe each time I read them.  I agree with you that there are some decent and honorable people associated with the CHRB, and I believe some of those people do care about the integrity of the participants.  However, until the board, as a whole, wakes up to the fact that by ignoring the misconduct of the cheaters and unscrupulous trainers, agents, etc., they are forcing many of us out of the industry, the future is bleak.  It’s hard enough to generate enough revenue to break even in the racing business, but it’s even more difficult to do so when those who play by the rules are forced over and over again, to compete with the cheaters and low-lifes.  The ripple effect of turning a blind-eye to the misconduct affects each layer of the industry, which is unfortunate, but a current reality.

    And, as we all know, this issue is not unique to CA.  It is pervasive across the country and impacts the financial well-being of all of us.  Hopefully, your efforts will awaken more people to the dirty little secrets of the industry and make it more difficult for the boards and commissions to continue to exist in blissful ignorance.  However, there will be no breath-holding on this end.

  • Triple Crown 2014

    This was a fire sale for an owner that wanted out of the game.  The Jury saw that, and ruled.

    • Concerned observer

      Oh, sorry, I missed that part of the discussion.
      Therefore,  It is OK if I  lie to him and cheat him. ooops,  I just  found it….. rule number 22 of the state penal law. “It is Always OK  to  screw any guy  in financial distress. Lying to such an individual is OK in this state. …NOT!

      Thanks for the elightened explanation.

      • Triple Crown 2014

        Concerned,
        I have been on the other end of the phone when an owner calls and says “I want Out”  That’s what I meant by a fire sale.  It’s never OK to flat out screw someone or take advantage of any given situation.  But it is OK when someone who wants out sets a price and then has sour grapes later when that horse goes on to do well…Just Sayin

        • BenKMcFadden

           If the owner knows he is selling the horse to the trainer and his partner, okay.  If the trainer says he is selling the horse to a third party and is only acting as an agent, when he is not, that is misrepresentation and fraud.  Full disclosure is the issue, not who made how much on the sale(s).

  • Triple Crown 2014

    This was a fire sale for an owner that wanted out of the game.  The Jury saw that, and ruled.

  • James D. Jimenez

    Hear, hear!!!

  • Sandra Warren

    My dismay about this lawsuit is that soon we will actually have to perform written due diligence before we can walk up to a guy and say we want to send him a horse.  If I want to know about someone in Northern California, I walk up and down the bridle path at Pln and I’ll know all about him before I’ve crossed four barns.  How is it that successful businessmen suddenly become incompetent when they enter into a horse transaction? Good heavens, why can’t these rich guys just ask about these characters before they throw money at them? One or two people I ask might have an unpleasant story about everyone (hoping you’ll deal with them instead), but the general consensus on crooks is almost always unanimous.  If you know who you are dealing with, it’s hard to get taken.

    • Concerned observer

      Sandra, It is about your words to another. It is about oral contracts. It is about the representations you make. About your loyalty to the one that is paying you. What is it about telling the truth and being honest that you do not understand? I am glad that i do not have any financial relationships with you, if you have no responsibility for your word.

    • Triple Crown 2014

      Sandra, I agree.  As an owner you should be aware of how things work on the backside.  A trainer especially low profile will hand a pony person $25 cash.  Same with many transactions on the Track.  It is a handshake type of business.  If you are with a high profile trainer you will pay higher prices, it’s a bit more efficient yet still the same mindset.  A trainer puts time and money and trade secrets into training a horse.  Getting them ready for a race is the ultimate goal.  Thankfully most at the tracks do a really good job doing that.

      • BenKMcFadden

         Total BS.  You must be a trainer cut from the same cloth as Canani

  • Sandra Warren

    My dismay about this lawsuit is that soon we will actually have to perform written due diligence before we can walk up to a guy and say we want to send him a horse.  If I want to know about someone in Northern California, I walk up and down the bridle path at Pln and I’ll know all about him before I’ve crossed four barns.  How is it that successful businessmen suddenly become incompetent when they enter into a horse transaction? Good heavens, why can’t these rich guys just ask about these characters before they throw money at them? One or two people I ask might have an unpleasant story about everyone (hoping you’ll deal with them instead), but the general consensus on crooks is almost always unanimous.  If you know who you are dealing with, it’s hard to get taken.

  • Concerned observer

    Sandra, It is about your words to another. It is about oral contracts. It is about the representations you make. About your loyalty to the one that is paying you. What is it about telling the truth and being honest that you do not understand? I am glad that i do not have any financial relationships with you, if you have no responsibility for your word.

  • Concerned observer

    Oh, sorry, I missed that part of the discussion.
    Therefore,  It is OK if I  lie to him and cheat him. ooops,  I just  found it….. rule number 22 of the state penal law. “It is Always OK  to  screw any guy  in financial distress. Lying to such an individual is OK in this state. …NOT!

    Thanks for the elightened explanation.

  • Triple Crown 2014

    Sandra, I agree.  As an owner you should be aware of how things work on the backside.  A trainer especially low profile will hand a pony person $25 cash.  Same with many transactions on the Track.  It is a handshake type of business.  If you are with a high profile trainer you will pay higher prices, it’s a bit more efficient yet still the same mindset.  A trainer puts time and money and trade secrets into training a horse.  Getting them ready for a race is the ultimate goal.  Thankfully most at the tracks do a really good job doing that.

  • Tapcity

    Wow,  What a bunch of MORONS……..This is a civil matter, not a CRIMINAL matter.  How many times did (deleted) do the same thing.  I would bet that almost every trainer does the same. The owner asked for 1 million and got 40k  omg,  The end of the world.  Cliff.  Implicated means what?   Get a life

  • Triple Crown 2014

    Concerned,
    I have been on the other end of the phone when an owner calls and says “I want Out”  That’s what I meant by a fire sale.  It’s never OK to flat out screw someone or take advantage of any given situation.  But it is OK when someone who wants out sets a price and then has sour grapes later when that horse goes on to do well…Just Sayin

  • Nancy Taylor

    Would not hold my breath waiting for the CHRB to do the right thing (severe punishment) in this case.  I seem to recall Canani-Wygod sending a stakes winning mare away from the racetrack to be treated by an unlicensed vet when the mare was in to go in an upcoming big race just a few days away.  Of course they swept it under the rug (covering for the cheaters is business as usual in California) and blamed some poor van driver instead.

    • May Flower

      Sweet Catomine

  • Nancy Taylor

    Would not hold my breath waiting for the CHRB to do the right thing (severe punishment) in this case.  I seem to recall Canani-Wygod sending a stakes winning mare away from the racetrack to be treated by an unlicensed vet when the mare was in to go in an upcoming big race just a few days away.  Of course they swept it under the rug (covering for the cheaters is business as usual in California) and blamed some poor van driver instead.

  • BenKMcFadden

     Great coverage.  Add Canani and Licht to the list of individuals who will receive no discipline from racing authorities for violations under civil law.  Racing boards, stewards, etc. make and selectively ignore their own rules.  Jess Jackson must be turning in his grave. He had similar experiences, got laws changed; but the offenders continued business as usual.  This is just business as usual.

  • BenKMcFadden

     Great coverage.  Add Canani and Licht to the list of individuals who will receive no discipline from racing authorities for violations under civil law.  Racing boards, stewards, etc. make and selectively ignore their own rules.  Jess Jackson must be turning in his grave. He had similar experiences, got laws changed; but the offenders continued business as usual.  This is just business as usual.

  • BenKMcFadden

     Total BS.  You must be a trainer cut from the same cloth as Canani

  • Ben K McFadden

    The signal the jury sent is that they incorrectly believe that owners call the shots.  Owners are merely stockholders who provide capital and “inventory”.  This is not much different than a CEO misusing funds, defrauding investors, or engaging is self-dealing at the expense of the stockholders.

    • Clem Clemson

      This is not an accurate assessment at all Ben.  The jury found that agents were not honest with their principle. Thats not the same as officers of a company embezzling or engaging in self dealing.  A Principle has the right to rely on the fiduciary duties owed to him by persons he engages to assist him in business transactions, and to not be fleeced by them.  The only thing the jury decided was that how Canini and Licht conducted themselves was despicable.

      • BenKMcFadden

         I think that is what I said , Clem.  The reason that the penalty was so light is that, in spite of  the breach of fiduciary responsibility by Canani, some jurors do not understand the nature of the owner-trainer relationship.  The thoroughbred owner IS like a stockholder in Citicorp, who expects Jamie Boy to take care of the stockholders investment and refrain from unethical conduct. The owner/stockholder has little knowledge of what Jamie is doing; likewise with a trainer.  The jury obviously did not understand the relationship.  It is a valid analogy.

        • BenKMcFadden

           Chase, not Citicorp; before you correct me Clem.

  • Ben K McFadden

    The signal the jury sent is that they incorrectly believe that owners call the shots.  Owners are merely stockholders who provide capital and “inventory”.  This is not much different than a CEO misusing funds, defrauding investors, or engaging is self-dealing at the expense of the stockholders.

  • Jjvera62

    i think it was made w a hint of sarcasim ray.

  • frankie conditions

    Ray, I have owned a few T Breds in partnership and individually. This turns my stomach (seems to be happening a lot lately when it comes to racing and this business). I have mixed feelings about salix, but on this I’m clear; when “agents”, teainers etc. can defraud their client, when frog juice and snake venom are used and the offendors can be slapped on the wrist or allowed to continue to “operrate” while their case is tied up in court forever it certainly gives one pause to “invest” in the game. Can you please pass along the address and contact information for the CHRB ?
    The industry can not and will not “save itself” as their is no one body oversseing it. The “insiders” don’t want a commissioner yet that is the only thing that COULD (not will) stop the farces that persist. I presently have a part in a 2 Y/O filly and and broodmare thats in foal. My hope was that when I retire in 8-10 years that I could have established a small broodmare band and sell and race some of their offspring and have some fun and maybe even some luck.  The odds (and I’m not talking genetics) are so stacked against you because so few people in the industry have CHARACTHER and can be trusted. Its unfortunate because a minority of people in the industry , like Graham Motion, are genuine, honest, hard working, do what’s best for the horse, people. The reality is that his peers are not people you would have take your dog for a walk for fear that they would sell it to a research lab for $ 100.00.
    The “information” age and technology has exposed the traits of people that have made a living by taking every short cut, double crossing the hands that feed them, and often using the horses/athletes as their means to an end (their own gain). The motto is there will be another sucker coming down the block once I bleed all the $ I can out of this sapp. As I said I have only had limited involvment in the last 8-9 years and have had a piece of 4-5 horses in partenrship and 2-3 on my owne , but I know 4-5 other similarly involved owners that have packed it in for good and have no intention of getting back in. sad , but the worst wounds are those that are self inflicted.

  • frankie conditions

    Ray, I have owned a few T Breds in partnership and individually. This turns my stomach (seems to be happening a lot lately when it comes to racing and this business). I have mixed feelings about salix, but on this I’m clear; when “agents”, teainers etc. can defraud their client, when frog juice and snake venom are used and the offendors can be slapped on the wrist or allowed to continue to “operrate” while their case is tied up in court forever it certainly gives one pause to “invest” in the game. Can you please pass along the address and contact information for the CHRB ?
    The industry can not and will not “save itself” as their is no one body oversseing it. The “insiders” don’t want a commissioner yet that is the only thing that COULD (not will) stop the farces that persist. I presently have a part in a 2 Y/O filly and and broodmare thats in foal. My hope was that when I retire in 8-10 years that I could have established a small broodmare band and sell and race some of their offspring and have some fun and maybe even some luck.  The odds (and I’m not talking genetics) are so stacked against you because so few people in the industry have CHARACTHER and can be trusted. Its unfortunate because a minority of people in the industry , like Graham Motion, are genuine, honest, hard working, do what’s best for the horse, people. The reality is that his peers are not people you would have take your dog for a walk for fear that they would sell it to a research lab for $ 100.00.
    The “information” age and technology has exposed the traits of people that have made a living by taking every short cut, double crossing the hands that feed them, and often using the horses/athletes as their means to an end (their own gain). The motto is there will be another sucker coming down the block once I bleed all the $ I can out of this sapp. As I said I have only had limited involvment in the last 8-9 years and have had a piece of 4-5 horses in partenrship and 2-3 on my owne , but I know 4-5 other similarly involved owners that have packed it in for good and have no intention of getting back in. sad , but the worst wounds are those that are self inflicted.

  • Ferdinand 86

    Unfortunately, many folks who make their living  in the horse business think cheating their owners is part of the job description. These nefarious practices have occurred at the highest levels of the sport.
    Does anyone remember the fine trainer, Dick Lundy,who trained some great horses for Allen Paulson?He lost pretty much everything over some deals similar to the Canani situation;including his sale of Loach as a rabbit for Strike the Gold.
    Many years ago,KY’s highest court ruled in Marsh v Gentry that the horse business is full of cheaters and anyone who gets in it should watch their back.A sad commentary.I suspect as many ,if not more ,owners are driven from the sport by cheating trainers as leave because of liberal drug policies.

  • May Flower

    Why are so many successful businessmen and wealthy people leaving their brains at the racetrack gate and horse sales entrance and fail to protect themselves and their horses against ruthless trainers and agents with written contracts? The industry continues to do nothing to protect its precious owners and horses. It prefers to organize seminars in hope to recruit new owners to replace those who left in disgust by presenting a pretty picture of itself.

  • May Flower

    Sweet Catomine

  • s/s

    Owners should learn not to take horses to this guy. He trains for a few rich owners and they continue to be fleeced by this crook. When he managed to break down my horses I paid the bill and when we shipped the horses to my farm he refused to wrap their legs for transport as it cost money for the wraps. I had to pay extra for them even though they shipped in with wraps. We are talking 20 dollars for wraps. I’ve given away more wraps than I can count and I don’t care. When the horses arrived at the farm they had to be treated for severe scratches on their heels. That should tell you something about his attention to detail. During training he wants no part of the owner around the barn and refuses to sit with the owners during the race so you are on your own to find a seat. He goes upstairs with his gambling buddies and bets. No wonder he only has a handful of horses

  • Clem Clemson

    I don’t understand how sophisticated business people in racing don’t use more contracts when they are dealing with horses that cost 10 times what cars cost.  That doesn’t that it is okay to defraud someone because there is only an oral contract.  It just means that I am mystified by the lack of paperwork. That being said, a civil jury found fraud regardless of the amount in general damages awarded.  The big thing is the punitive damages which are always hard to get.  If you see a judgment where the punitive damages exceed the general damages, then you know that the jury thought there was serious and obvious fraud and unfairness going on. Punitives only get granted in excess of general damages when the jury is absolutely disgusted with the integrity and behavior of the defendants.  I guess the jury thought that about Canini and Licht. The CHRB has completely failed to police its licensees.  Whats the point of licensing people if you don’t do anything when they commit civil offenses that arise to crimes? 

  • Clem Clemson

    This is not an accurate assessment at all Ben.  The jury found that agents were not honest with their principle. Thats not the same as officers of a company embezzling or engaging in self dealing.  A Principle has the right to rely on the fiduciary duties owed to him by persons he engages to assist him in business transactions, and to not be fleeced by them.  The only thing the jury decided was that how Canini and Licht conducted themselves was despicable.

  • BenKMcFadden

     I think that is what I said , Clem.  The reason that the penalty was so light is that, in spite of  the breach of fiduciary responsibility by Canani, some jurors do not understand the nature of the owner-trainer relationship.  The thoroughbred owner IS like a stockholder in Citicorp, who expects Jamie Boy to take care of the stockholders investment and refrain from unethical conduct. The owner/stockholder has little knowledge of what Jamie is doing; likewise with a trainer.  The jury obviously did not understand the relationship.  It is a valid analogy.

  • BenKMcFadden

     Chase, not Citicorp; before you correct me Clem.

  • Alex

    Big deal owners should be smart enough to smell a rat or they don’t belong in racing. If someone is smarter and can make more money selling a horse to someone else more power to them. Look at the horse show world or the claimers that get undermined by their trainers. Everest,Nielsen would do this to any person he could too that is just business in Nielsen’s MIND. Why do you think Nielsen is so upset…. he just got paid back POOR Jack! 

  • Alex

    Big deal owners should be smart enough to smell a rat or they don’t belong in racing. If someone is smarter and can make more money selling a horse to someone else more power to them. Look at the horse show world or the claimers that get undermined by their trainers. Everest,Nielsen would do this to any person he could too that is just business in Nielsen’s MIND. Why do you think Nielsen is so upset…. he just got paid back POOR Jack! 

  • Triple Crown 14

    I was with Julio when Jeffery Nielsen called and told Julio Canani he wanted out of the game, he needed money for something else coming up, his words were ” Just get rid of them ” Needless to say Julio did exactly what Nielsen asked him to do!

Twitter